Prime US REIT’s 2Q25 results were in line. A key positive was the turnaround in portfolio occupancy, with a noticeable pick-up in leasing momentum and return of large leases. Rental reversions improved, aided by flight-to-quality, return-to-office policies, and limited new supply.
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Key hurdles are volatile interest rates and a potential return of inflation from tariff policies, which could slow down the ongoing recovery.
Portfolio occupancy improved to 80.2%.
Portfolio occupancy improved to 80.2% (+1.3ppts q-o-q), mainly driven by the signing of a 120k sq ft long 11-year lease with X-energy at Waterfront at Washingtonian, bringing asset occupancy to 85.7% from 48.7% (1Q). Other assets that saw notable increases include Village Center Station I, with the signing of a 43k sq ft lease with a leading global engineering and consultancy firm.
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Overall leasing volumes (2Q) of 268k sq ft (~6% of NLA), were more than 2x in 1Q, indicating healthy leasing demand despite tariff-led uncertainties.
Occupancy is expected to further pick up in 2H, with the signing of 61k sq ft (1.5% of NLA) at 222 Main in July and the anticipated signing of another large lease at Park Tower (~100k sq ft).
Rental reversion of +4.3%.
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Above is an excerpt from a report by RHB Securities Research. Clients of RHB may be the first to access the full PDF report @ https://www.rhbtradesmart.com/.
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