- We view Prime US REIT (SGX:OXMU) as a value proxy to the US office sector, which is showing early signs of recovery in recent quarters.
Turning the corner.
- - Read this at SGinvestors.io -
- We reinitiate coverage on Prime US REIT with a BUY rating and DCF-backed target price of US$ 0.35. Our Prime US REIT's target price implies a target yield of 4.3% and a target P/B of 0.65x.
Encouraging market dynamics.
- - Read this at SGinvestors.io -
- Large occupiers are re-entering the market, with deals surging over ~50% q-o-q to >100k sq ft, and renewals showing minimal space reductions (–2%), indicating the downsizing cycle could be largely over.
- National vacancy eased to ~22.5% (–5bps q-o-q), and net absorption turned positive for the first time since the pandemic at 6.1mil sq ft, driven by robust Class A demand, where vacancy tightened over 100bps y-o-y as occupiers prioritise high-quality, amenity-rich buildings amid a slowdown in new construction starts.
Strengthening operational performance signals a turnaround.
- Read more at SGinvestors.io.
