- Prime US REIT (SGX:OXMU) reported a FY24 DPU of 0.29 US cents (-88% y-o-y), in line with expectations. The drop was mainly due to the manager retaining a significant portion of its distributable income (~90%) for capital expenditure and debt reduction.
Results in line with projections.
- - Read this at SGinvestors.io -
- Distributable income in 2H24 was lower, at US$14.8mil (-48.1% y-o-y) due to higher interest costs, which rose by 46% y-o-y following Prime US REIT’s debt refinancing in mid-2024.
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Overall NAV remained stable.
- We were pleasantly surprised by Prime US REIT’s portfolio valuations, which rose by +2.2% y-o-y to US$1,352mil (but after taking into account capital expenditure, a fair value loss was recorded). Gearing remained stable at ~46.7%, resulting in a stable NAV of US$0.55 per Prime US REIT unit.
- While we understand that a rise in cap rates and discount rates was seen in the latest round of valuations, we saw divergent valuation performance, which we believe was driven by cashflow improvements on a y-o-y basis.
- Notably, we saw the valuation of properties like Reston Square rising by ~+21%, The 101 (St Louis) by +11.5%, and Tower 909 (Dallas) by +16.4% y-o-y, mainly driven by stronger cashflow visibility on the back of robust leasing activity and longer leases signed at these properties.
- Similarly, lower vacancies and market comparisons drove valuations for Park Tower (-9.8%) and Village Center Station 1 (-9.0%) lower.
Improving leasing momentum.
- Read more at SGinvestors.io.
