Prime US REIT - Phillip Securities 2023-11-09: Challenges Remain, But Manageable

Prime US REIT - Challenges Remain, But Manageable

Prime US REIT (SGX:OXMU) | SGinvestors.ioPrime US REIT (SGX:OXMU)
  • Prime US REIT (SGX:OXMU)'s 3Q23 distributable income of US$14.7mil (-23.4% y-o-y) was in line with our expectations and formed 25% of our FY23e forecast.
  • The y-o-y decline was due to Prime increasing management fees paid in cash from 20% to 100%, higher interest expense, lower portfolio occupancy, and absence of lease termination income (US$1.3mil recorded in 3Q22). Excluding the change in management fees paid in cash, distributable income is down 16.6% y-o-y.
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  • Maintain BUY, DDM-based target price for Prime US REIT lowered from US$0.39 to US$0.37. FY24e DPU forecast for Prime US REIT is lowered by 7% on lower occupancy and higher finance costs assumptions.

The Positive

Leasing activities picked up in 3Q23.

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  • Management indicated strong leasing momentum at some of its properties, with notable leasing discussions underway at VCS I and Park Tower, albeit with relatively longer lead times.
  • One of its top 10 tenants, Matheson Tri-Gas, has indicated interest to expand its space at Tower 909, and discussions are ongoing.

The Negatives

Portfolio occupancy dipped from 85.6% to 85% q-o-q.

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Above is the excerpt from report by Phillip Securities Research.
Clients of Phillip Capital may be the first to access the full report in PDF @

Darren Chan Phillip Securities Research | 2023-11-09

Read also Phillip's most recent report:
2024-05-13 Prime US REIT - Pricing In Some Refinancing Risk.

Previous report by Phillip:
2024-02-26 Prime US REIT - No Breach, But Refinancing Risks Persist.

Price targets by 2 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


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