Prime US Reit

[Seah.tt]

glad that it didnt come true!

why ?? sic pls

 

[dappermen]

Wat is sic?
& i dont believe in merger all the time

keppac oak is performin well alone

 

[Seah.tt]

sharing is caring

 

[TehSi99]

If merged, then I am out.

 

[dappermen]

If merged, then I am out.

yes, i ONLY wanna Keppac!!! not others

Somehow all my tiptop luv to merged: eg Ara logos is gone now w ESR
recently ESR is lacklustre in terms of price movement!

 

[starbugs]

Will merge sooner or later. I have both reits.

 

[dappermen]

u mean the two reits r related?

 

[TehSi99]

I have sold away Prime when price keeps dropping.
If merging, then i may sell off my KepOak.

 

[dappermen]

why would u have picked Prime in the very first place??
for its divs?

 

[TehSi99]

why would u have picked Prime in the very first place??
for its divs?

That was when Prime was looking good quite some time ago.

 

[dappermen]

oooh, usu i dont dare to jump in till i m confident....

i will not pick those that "looked gd"

i do make terrible mistakes , MLT stable and gd reputation but pc of nothing, to be honest!

 

[homer123]

Overall result improved , yield hit 10% for Prime Reit!!​

 

[soneat]

Overall result improved , yield hit 10% for Prime Reit!!​

Keith just did some sharing on this as well.
https://investmentmoats.com/money-m...t-achieves-attractive-dividend-yield-2022-1h/

 

[Andrew833]

US 3.52 cents huat ah!

 

[homer123]

Keith just did some sharing on this as well.
https://investmentmoats.com/money-m...t-achieves-attractive-dividend-yield-2022-1h/

Yes , just read this morning as well.. I was surprised Keith covered this as well,

 

[soneat]

Yes , just read this morning as well.. I was surprised Keith covered this as well,

Actually I am surprised as well as he typically doesn't cover individual stocks.

 

[dappermen]

so his covering of OXMU means it must be a "prime"?

seemed meh only although there is a recent climb! and gd dpu?
https://www.sgx.com/securities/equities/OXMU


based on this : https://static.businesstimes.com.sg...Governance-and-Transparency-Index-Reits_0.pdf
it is no wonder some would not "touch the bottom 5 in the list.... better not touch with a 10 foot pole? I'm definitely not vested in any of those 5...."
discussn here : https://forums.hardwarezone.com.sg/...ficial-sgx-crpu.5774076/page-7#post-143123257

 

[Shion]

With healthy assets and debt headroom, pessimism on Prime US REIT 'likely overdone': analysts​

https://www.theedgesingapore.com/ca...droom-pessimism-prime-us-reit-likely-overdone
With strong rental reversion and more than 9% yield, market pessimism on US office-focused Prime US REIT is “likely overdone”, say analysts.

RHB Group Research analyst Vijay Natarajan is mtaining "buy” on Prime with a lower target price of US$1 ($1.37) from US$1.02 previously. The new target price represents a 39% upside.

Prime US REIT holds a portfolio of 14 US office properties worth US$1.7 billion. On Aug 3, the REIT reported a distribution per unit of 3.52 cents for 1HFY2022 ended June, up 5.7% y-o-y. Net property income in the same period was US$50.8 million, up 9.7% y-o-y; while revenue was up 13.5% y-o-y to US$81.8 million.

In an Aug 8 note, Natarajan notes that 2HFY2022 will be “slightly weaker”. “Prime posted credible 1HFY2022 results, aided by acquisitions and rental growth. Excluding contributions from recent acquisitions, DPU growth would have been flattish. The known exit of Whitney, Bradley & Brown (ninth largest tenant, 2.6% of income) in July and the absence of amortised income from WeWork, leases from November are expected to dent 2HFY2022, until these vacancies are backfilled,” he writes.

On the other hand, Natarajan is impressed by Prime’s leasing demand. “Its assets remain healthy and better than our expectations. About 86% of its debts are hedged, with no debt expiry until 2024 (assuming exercise of debt options) and, as such, should be minimally impacted by rising interest rates.”

‘Under-rented by 5.3%’

Maybank Research analyst Chua Su Tye says Prime’s DPU visibility remains high, underpinned by a 4.0-year weighted average lease expiry (WALE), and 2.0% p.a. growth from its assets under management (AUM), currently under-rented by 5.3%.

In an Aug 4 note, Chua is staying “buy” on Prime with a lower target price of US$1.05 from US$1.07 previously. “We see better fundamentals as physical occupancy recovers, with catalysts from improving leasing, positive rental reversion, and upside from acquisitions.”

Portfolio occupancy fell to 89.6% in 2QFY2022, from 89.9% in 1QFY2022, with a mixed performance across its properties. Chua thinks occupancies will bottom out from end-2022.

Leasing slowed in 2QFY2022 after it surged in 1QFY2022, but overall 1HFY2022 jumped 158% y-o-y. Rental reversion was stronger at 11.2% growth in 2QFY2022, compared to 3.4% in 1QFY2022 and 14.1% for FY2021), driven by demand from finance, professional services, and healthcare sector tenancies, with new leases contributing 47%.

Chua also points to Prime’s healthy debt headroom of $417 million compared to a 50% limit, as gearing fell to 37.8% from 39.1% as at end-March 2022.

Borrowing costs, meanwhile, rose to 2.8% from 2.7%. “With fixed-rate debt high at 86%, a 50 bps rise in interest rate could lower DPU by less than 1%,” says Chua.

Chua adds: “Prime compares well with its US office S-REIT peers, as it has low near-term leasing and refinancing risks.”

As at 9.44am, units in Prime US REIT are trading 3 US cents lower, or 4.20% down, at 68.5 US cents.

 

[homer123]

With healthy assets and debt headroom, pessimism on Prime US REIT 'likely overdone': analysts​

https://www.theedgesingapore.com/ca...droom-pessimism-prime-us-reit-likely-overdone
With strong rental reversion and more than 9% yield, market pessimism on US office-focused Prime US REIT is “likely overdone”, say analysts.

RHB Group Research analyst Vijay Natarajan is mtaining "buy” on Prime with a lower target price of US$1 ($1.37) from US$1.02 previously. The new target price represents a 39% upside.

Prime US REIT holds a portfolio of 14 US office properties worth US$1.7 billion. On Aug 3, the REIT reported a distribution per unit of 3.52 cents for 1HFY2022 ended June, up 5.7% y-o-y. Net property income in the same period was US$50.8 million, up 9.7% y-o-y; while revenue was up 13.5% y-o-y to US$81.8 million.

In an Aug 8 note, Natarajan notes that 2HFY2022 will be “slightly weaker”. “Prime posted credible 1HFY2022 results, aided by acquisitions and rental growth. Excluding contributions from recent acquisitions, DPU growth would have been flattish. The known exit of Whitney, Bradley & Brown (ninth largest tenant, 2.6% of income) in July and the absence of amortised income from WeWork, leases from November are expected to dent 2HFY2022, until these vacancies are backfilled,” he writes.

On the other hand, Natarajan is impressed by Prime’s leasing demand. “Its assets remain healthy and better than our expectations. About 86% of its debts are hedged, with no debt expiry until 2024 (assuming exercise of debt options) and, as such, should be minimally impacted by rising interest rates.”

‘Under-rented by 5.3%’

Maybank Research analyst Chua Su Tye says Prime’s DPU visibility remains high, underpinned by a 4.0-year weighted average lease expiry (WALE), and 2.0% p.a. growth from its assets under management (AUM), currently under-rented by 5.3%.

In an Aug 4 note, Chua is staying “buy” on Prime with a lower target price of US$1.05 from US$1.07 previously. “We see better fundamentals as physical occupancy recovers, with catalysts from improving leasing, positive rental reversion, and upside from acquisitions.”

Portfolio occupancy fell to 89.6% in 2QFY2022, from 89.9% in 1QFY2022, with a mixed performance across its properties. Chua thinks occupancies will bottom out from end-2022.

Leasing slowed in 2QFY2022 after it surged in 1QFY2022, but overall 1HFY2022 jumped 158% y-o-y. Rental reversion was stronger at 11.2% growth in 2QFY2022, compared to 3.4% in 1QFY2022 and 14.1% for FY2021), driven by demand from finance, professional services, and healthcare sector tenancies, with new leases contributing 47%.

Chua also points to Prime’s healthy debt headroom of $417 million compared to a 50% limit, as gearing fell to 37.8% from 39.1% as at end-March 2022.

Borrowing costs, meanwhile, rose to 2.8% from 2.7%. “With fixed-rate debt high at 86%, a 50 bps rise in interest rate could lower DPU by less than 1%,” says Chua.

Chua adds: “Prime compares well with its US office S-REIT peers, as it has low near-term leasing and refinancing risks.”

As at 9.44am, units in Prime US REIT are trading 3 US cents lower, or 4.20% down, at 68.5 US cents.

I agree with both analysts

 

[Shion]

PhillipCap maintains ‘buy’ on Prime US REIT, but lowers TP on lower DPU forecasts​

https://www.theedgesingapore.com/ca...y-prime-us-reit-lowers-tp-lower-dpu-forecasts
PhillipCapital analyst Darren Chan has maintained his “buy” call on Prime US Reit but with a lower target price of 88 US cents ($1.23), down from his previous figure of US$1.

Chan explains that the lower target price was due to a forecasted increase in the cost of equity capital (COE) for the Reit from 9.6% to 10.55%, due to higher risk-free rate assumption and market risk.

Despite this, he sees that Prime is minimally impacted by rising interest rates, with 86% of debt either on fixed rates or hedged through interest rate swaps. According to his calculations, every 100 basis points increase in interest rates would affect FY2022 distribution per unit (DPU) by about 1.1%.

Around 51% of debts have hedges in place through to 2026, and the Reit has no debt expiring till 2024.

Chan also describes the REIT as his “top pick” in the US office sector, due to greater tenant exposure to STEM and TAMI sectors. STEM refers to the science, technology, engineering and mathematics sector, while TAMI refers to the technology, advertising, media and information sector.

He also describes Prime’s portfolio as “resilient”, noting that it has recorded 8 consecutive quarters of positive rental reversions.

Prime signed 85,700 sq ft, or 1.8%, of its portfolio cash rental income (CRI) in its 2QFY2022 ended June, with an overall rental reversion of +10.9%. 47% of these were from new leases.

2QFY2022 leasing activities were mainly from the financial, professional services and healthcare sectors.

Management guided that leasing demand and enquiries for its assets remain strong and active leasing discussions are ongoing for Tower 1 at Emeryville, Village Center Station 1, Tower 909, 222 Main and 171 17th Street. Resilient portfolio.

Prime’s portfolio is also diversified, with no single primary market contributing more than 11.7% of CRI and no single property contributing more than 13.8% of cash rental income (CRI). Portfolio occupancy also remained stable in 2QFY20 22 at 89.6%.

Chan points out that “Prime also has a healthy weight average lease expiry (WALE) of four years, with well-staggered lease expirations. Their tenant industry sector diversification also contributes to their resiliency, with 74% of tenants in established and growth sectors.”

From a macro view, the analyst highlights that office-using employment increased by about 1.6 million ( up 4.8% y-o-y), and there were 1.06 million more office-using workers than before the pandemic began as of June 2022 .

In addition, the US job market remains “healthy” and this has spurred many companies to add office space to house a larger workforce. Leasing activity also picked up in 1H2022 with stronger demand coming from the financial, professional services and healthcare sectors.

For Prime, physical occupancy across the portfolio is at about 50% as more tenants implement their return-to-work plans. Chan thinks that with in-place rents at about 5.3% below asking rents, Prime’s portfolio is primed for more positive rental reversions.

At its current share price, Prime’s DPU stands at 11.4% and 11.6% for FY2022 and FY2023 respectively, with Chan adding that Prime is also trading at an attractive 25% discount to its book value.

As of 10.53 am, shares of Prime are trading at 61.5 US cents, with a FY2022 P/NAV ratio of 0.73x