Prime US REIT - RHB Invest 2023-05-11: Focusing On Operations

• Prime US REIT's 1Q23 update shows resilient operational numbers. While occupancy is expected to see slight fluctuations on tenant movements, we expect it to remain above 85% with slight positive rent reversions.
• - Read this at SGinvestors.io -
• Keep BUY rating on Prime US REIT with new US$0.57 target price.

Prime US REIT's 1Q distributable income down 22.5%

• Prime US REIT (SGX:OXMU)'s 1Q23 distributable income was down 22.5% (on a like-for-like basis), mainly on increases in financing costs (40% of the decline), absence of WeWork termination income (30%), and higher operating expenses (21%).
• - Read this at SGinvestors.io -
• We cut FY23F-24F DPUs forecast for Prime US REIT by 12% and 14% by revising fees fully in cash, and tweaking occupancy and financing costs. Our cost of equity or CoE is also adjusted higher by 70bps, factoring in the severe debt crunch in the US commercial market.

Refinancing concerns slightly overblown.

• Read more at SGinvestors.io.

Vijay Natarajan RHB Securities Research | https://www.rhbgroup.com/ 2023-05-11 SGinvestors.io

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