That's a pleasant surprise.
Prime US Reit
- Thread starter starbugs
- Start date
That's a pleasant surprise.
Shion
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- Oct 24, 2008
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Prime US Reit in talks with WeWork on proposed lease restructuring
https://www.businesstimes.com.sg/co...s-with-wework-on-proposed-lease-restructuring
CO-WORKING space operator WeWork has approached Prime US Reit with a proposal to restructure its lease at the latter's Class A office property in California, and discussions are ongoing.
The tenant, a wholly-owned subsidiary of WeWork, occupies 56,977 square feet (sq ft) within Tower I at Emeryville, out of the building's net lettable area of 222,606 sq ft.
WeWork's website states that its shared office space takes up three floors of the 12-storey tower, and includes hot desking spaces, dedicated desks, and private offices.
The tenant contributes less than 2.5 per cent of Prime US Reit's cash rental income as at end-March, the real estate investment trust's (Reit) manager said in a bourse filing on Thursday evening.
It added that the tenant has been current on its rental obligations till mid-June 2021, and the lease terms are "currently under evaluation".
Prime US ReitUSD has called on the tenant to continue to meet its rental obligations, and also called upon the existing security package for the payment of such obligations.
Prime US Reit's security in relation to that WeWork lease consists of a combination of protections. If the counterparty honours its obligations, such protections will cover the tenant's monthly lease obligations through as much as end-2022, the manager noted.
The manager also said it does not expect the matter to have any impact on the distribution per unit of Prime US Reit for the current financial year, in light of the security.
Also, based on the independent valuation advice sought by the manager, this will not materially affect the value of the Reit's portfolio as compared to the portfolio appraisal conducted as at last December.
The manager will release further announcements as necessary if there are material developments on this matter.
It added that "notwithstanding the above, rental collections across the portfolio have remained resilient in 2021 and continue to trend in line with collection rates achieved in 2020".
Separately, Prime US Reit has upsized its US$470 million credit facility to US$600 million, and adjusted the covenants with the existing bank lending group.
This additional liquidity will be "readily available" for capital needs within the portfolio and for future property acquisitions, thus enabling Prime US Reit to "compete more effectively in the US property acquisition markets", said the manager's deputy chief executive and chief financial officer, Harmeet Bedi.
Units of Prime US Reit rose 0.6 per cent or 0.5 US cent to finish at 86.5 US cents on Thursday, before the filing.
Prime US ReitUSD: The real estate investment trust (Reit) is acquiring Sorrento Towers in California as well as One Town Center in Florida for a total consideration of US$245.5 million. In an announcement on Thursday morning after it called for a trading halt, the Reit manager said the purchase will be partially funded through a private placement exercise to raise gross proceeds of at least US$80 million. Units of Prime US Reit closed one US cent or 1.2 per cent higher at 88 US cents on Wednesday.
yay, back to IPO price liao!
Read HWZ Forum Rules!
yay, back to IPO price liao!
Read HWZ Forum Rules!
Average down or sell?
This is already a sizable stake in my portforlio. Will just remain status quo and collect the above average dividends.
I can't tell what's the future of office REIT post COVID, but face to face office setup has its intrinsic value which can't be replaced by Zoom or whatsapp.
What about u?
Agreed.
The issue about going back to office is slowly not related to covid, especially in the US. They are not going back because they are used to working from home. Living and working in a house like in US is not a same as living and working in HDB.
Even if the preference is working from home, there would still be a need for office space. For some industries they may no longer need to work in the office 100% of the time, but use hot desking when workers need to go back which will lower the office space requirement. But for the banking industry they placed alot of importance on face to face meetings, especially in trading rooms where traders get ideas from informal chats which can't be replicated online.
Hopefully PRIME assets are well placed to meet this new working norms.
Actually the latest two properties don't seem to be "prime" or Class A offices. Not that I mind as long as the yield is good, but the long term plan should be for Prime US reit and KepPacOak to merge since their portfolio strategies seem to be converging. I have both reits.
Anyway, with the vaccination and Americans mentality, they could be the one with most people back to office. I heard there are some sort of plans for people to go back to office from August.
Hope those vested in the US office reits can huat !!
Hope those vested in the US office reits can huat !!
Shion
Senior Mentor
- Joined
- Oct 24, 2008
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- 371,065
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- 118,883
DRP option now open. Select by 27 July. I am taking scrip, rounded down to nearest to 100 units.
There are two components (capital and income), so need to be careful during calculations to avoid odd units.
Declared Dividend Rate (Per Share/Unit): USD 0.0342 (comprising a tax-exempt income component of US 2.21 cents, and a capital component of US 1.21 cents).
Price for Scrip Dividend (Per Share/Unit): USD 0.832
There are two components (capital and income), so need to be careful during calculations to avoid odd units.
Declared Dividend Rate (Per Share/Unit): USD 0.0342 (comprising a tax-exempt income component of US 2.21 cents, and a capital component of US 1.21 cents).
Price for Scrip Dividend (Per Share/Unit): USD 0.832
What does tax exempt income component and capital component mean? Thanks
The price is pretty decent for scrip, thinking of going with it instead of cash
taking cash, deploying elsewhere
You will need a USD deposit account obviously.
Not sure what's the exchange rate they use to convert to SGD.
For the Mar dividend, the exchange rate was 1.3412.
Shion
Senior Mentor
- Joined
- Oct 24, 2008
- Messages
- 371,065
- Reaction score
- 118,883
Prime US REIT sees 5.4% drop in DPU to 3.3 US cents in 1H2021
https://www.theedgesingapore.com/capital/results/prime-us-reit-sees-54-drop-dpu-33-us-cents-1h2021
The manager of Prime US REIT has reported distribution per unit (DPU) of 3.3 US cents (4.5 cents) in 1HFY21 ended June. This is down 5.4% from the 3.5 US cents disbursed in the previous year and follows higher property expenses.
Taking into account the private placement launched on June 24, Prime US REIT announced a cumulative DPU distribution of US 3.42 cents for the period from January 1 to July 5.
Gross revenue for the first six months of the year was up by 1.2% to US$72.1 million, largely due to full half-year contributions from Park Tower, which was acquired in February 2020.
However, the REIT’s net property income fell by 2.3% to US$46.3 million, due to higher property expenses such as an increase in property taxes for its facility at 101 South Hanley.
The REIT – which has a portfolio of 12 office properties in the US – saw its income distributable to unitholders edge down by 1.3% to US$35.4 million in 1HFY21.
With this, its gearing was 34.4% as at end June, while interest coverage was 5.8 times.
Prime US REIT’s portfolio carried a total value of US$1.41 billion in end June.
Its occupancy was 91.7% in 1HFY1, with a weighted average lease expiry (WALE) of 4.1 years and low near-term lease expires.
The manager of the REIT noted that rent collections were strong at 99.6% in 2Q2021, with minimal deferrals. Meanwhile, it executed some 52,349 sq ft of mainly long-term leases with positive rental revision of 10.5%.
New leases signed include leading financial services and government tenants such as Deloitte, Commission on State Mandates, EDJ Leasing and FCI Lender Services.
The REIT notes that portfolio in place rents are 6.4% below market, thereby providing an added buffer and rental reversion potential.
Going forward, the REIT’s manager is focused on renewing leases and executing new ones to address the remaining expiries for this year. For this, it says it has “ample debt headroom” of US$458.5 million and US$200 million of undrawn facilities.
As at June 30, Prime US REIT had cash and cash equivalents of US443.9 million, up from US433.8 million in the previous year.
“We are pleased to report another stable and resilient performance. PRIME’s well-diversified portfolio and prudent capital structure continue to deliver on our growth objectives and enhance Unitholders’ value,” says Barbara Cambon, CEO and CIO of the manager of Prime.
The manager of the REIT views the rising vaccination rates and increased consumer activity in the US positively. However, they also note that national asking rents were up 0.9% q-o-q, despite rising vacancy.
Still, they are optimistic that the return to office will be a point of emphasis of many companies considering that several employers have indicated dates at which their staff will be returning.
In line with this, the REIT is looking to acquire two high quality assets – One Town Centre and Sorrento Towers – which are expected to contribute positively to the portfolio’s performance in 2H2021.
“We believe non-gateway markets will continue to provide superior risk-adjusted returns, and the extension of our presence into key growth markets and sectors presents significant future growth opportunities for us,” added Cambon.
To their end, the REIT has its sights on being included in the FTSE EPRA NAREIT index. This will “further institutionalise our unitholder register and improve trading liquidity,” Cambon explains.
Shares in Prime US REIT closed plat at 84 US cents on Aug 3, prior to its results announcement.
Shion
Senior Mentor
- Joined
- Oct 24, 2008
- Messages
- 371,065
- Reaction score
- 118,883
'Best leasing quarter' for Prime US REIT despite pre-terminations
https://www.theedgesingapore.com/ca...uarter-prime-us-reit-despite-pre-terminations
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