Prime US REIT - UOB Kay Hian 2023-02-10: Stellar Positive Rental Reversion In 2H22

Prime US REIT - Stellar Positive Rental Reversion In 2H22

  • Prime US REIT’s 2H22 financial performance was affected by the bunching up of expenses as it prepares to welcome more employees back to the office. It is able to continue generating positive rental reversion as in-place passing rent was 6.3% below asking rent in 2023.
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  • Valuation remains attractive with 2023 distribution yield at 12.5% and P/NAV at 0.65x. Maintain BUY on Prime US REIT with target price at US$0.76.

Prime US REIT's 2H22 Results

  • Prime US REIT (SGX:OXMU) reported 2H22 DPU of US$0.0303 (-12.2% y-o-y), which is marginally below our expectations – See Prime US REIT's announcement dated 08 Feb 2023.
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  • NPI adjusting for non-recurring termination income and non-cash distribution adjustments for 2H22 was lower by 4.5% y-o-y due to higher operating costs (bunching up of expenses in areas, such as heating, ventilation & air conditioning (HVAC) and repair & maintenance) as tenants returned to office. Thus, NPI margin dipped 4ppt h-o-h to 58% in 2H22.
  • 11th consecutive quarter of positive rental reversion. Prime US REIT executed 142,800sf of leases and achieved positive rental reversion of 20.2% in 4Q22. Crosspoint at Philadelphia saw positive rental reversion of more than 25% due to:
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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 @

Jonathan KOH CFA UOB Kay Hian Research | 2023-02-10

Previous report by UOB:
2023-01-17 Prime US REIT - Rising From The Abyss.

Price targets by 3 other brokers at Prime US REIT Target Prices.
Listing of research reports at Prime US REIT Analyst Reports.

Relevant links:
Prime US REIT Share Price History,
Prime US REIT Announcements,
Prime US REIT Dividends & Corporate Actions,
Prime US REIT News Articles

SGX Stock / REIT Search


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