Prime US REIT - DBS Research 2024-02-16: Potential Domino Effect; Downgrade To FULLY VALUED

• We downgrade our rating for Prime US REIT (SGX:OXMU) to FULLY VALUED from HOLD previously and lower our Prime US REIT's target price to US$0.07 from US$0.18.
• - Read this at SGinvestors.io -
• We pegged our target price to 0.11x P/NAV assuming Prime US REIT's NAV could decline by another 15%.

Pre-emptive stance, prior to Prime US REIT's earnings release

• We are taking a pre-emptive stance, prior to Prime US REIT releasing its results (see earnings calendar), on a potential domino impact from Keppel Pacific Oak US REIT (SGX:CMOU)’s recent actions to suspend distributions for better capital management. See report: Keppel Pacific Oak US REIT - Down The Same Path.
• - Read this at SGinvestors.io -
• We continue to watch for re-rating catalysts, such as
  1. stronger signs of a recovery in the US office market,
  2. the Fed pausing/cutting interest rates, and
  3. an improvement in macroeconomic sentiment/outlook.

Investment Thesis:

Positioned for return-to-office trends in the US, albeit with a rocky recovery.

• Read more at SGinvestors.io.

Rachel TAN DBS Group Research | Derek TAN DBS Research | https://www.dbs.com/insightsdirect/ 2024-02-16 SGinvestors.io

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