Prime US REIT - UOB Kay Hian 2023-01-17: Rising From The Abyss

• Initiate coverage on Prime US REIT with BUY and target price of US$0.78.
• Prime US REIT's Class A offices will benefit from a flight to quality despite the gloom in the US office market in 2H22. It is able to continue generating positive rental reversion as in-place passing rent was 6.7% below asking rent in 4Q22.
• Read this at SGinvestors.io -
• Prime US REIT's share price corrected 40% in 2H22. Valuation has bombed out with 2023 distribution yield at 15.2% and P/NAV at 0.56x.

Prime US REIT's class A offices benefit from flight to quality and attract blue chip tenants.

• Read this at SGinvestors.io -
• Prime US REIT focuses on Class A office buildings, which are the best in class. Class A offices with amenities are well sought after to attract employees back to work from the office. Demand is skewed towards high-quality Class A office space. According to Cushman & Wakefield, Class A offices outperform in net absorption. Premium in rents commanded by newer Class A office buildings have also doubled during the COVID-19 pandemic.
• Prime US REIT's key tenants are blue chip companies with strong credit standing. Charter Communications, Goldman Sachs, Sodexo, Dexcom, Wells Fargo and Bank of America are among its top-10 tenants. WALE for its top-10 tenants is healthy at 4.6 years. Some 73% of tenants are in the established and growth (STEM/TAMI) sectors.

18-hour and Super Sun Belt cities attract in-migration.

• Read more at SGinvestors.io.

Above is the excerpt from report by UOB Kay Hian Research.
Clients of UOB Kay Hian may be the first to access the full report in PDF @ https://www.utrade.com.sg/.