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Prime US Reit&rsquo s deputy CEO Harmeet Singh Bedi to take over the reins from Mar 8
PRIME US Reit has identified a new chief executive following the imminent retirement of current CEO Barbara Cambon, its manager said on Wednesday (Feb 9).
Harmeet Singh Bedi, who is currently the deputy CEO and chief financial officer (CFO), will take over when Cambon, who is also chief investment officer, retires with effect from Mar 8.
The Reit manager said that upon the appointment of Bedi, the current financial controller of the manager will cover the duties of the CFO until a new one is appointed.
It added that the Reit is in the midst of recruiting a head of investments.
UOB Kay Hian initiates coverage on Prime US Reit with &lsquo buy&rsquo call, US$0.78 target price
UOB Kay Hian (UOBKH) initiated coverage on Prime US Reit : OXMU +3.61% with a &ldquo buy&rdquo call and a target price of US$0.78, representing an 88 per cent upside from the real estate investment trust&rsquo s (Reit) last closing price of US$0.415 on Tuesday (Jan 17).
In a report on Wednesday, analyst Jonathan Koh noted that the Reit has seen a price correction of about 40 per cent over the second half of 2022. &ldquo We are of the view that the selling is overdone and current weakness presents a good opportunity to accumulate the stock,&rdquo he said.
Based on the research house&rsquo s estimates, Prime US Reit currently has &ldquo bombed-out valuations&rdquo and is &ldquo oversold&rdquo at a price to net asset value multiple of 0.56 times with a FY2023 distribution yield of 15.2 per cent and yield spread of 11.7 per cent.
Noting that the Reit has generated positive rental reversion consecutively for the past 10 quarters, Koh believes the Reit will be able to continue doing so due to its lower-than-asking passing rent in the fourth quarter.
&ldquo Within its portfolio, Park Tower at Sacramento, Sorrento Towers at San Diego, Crosspoint at Philadelphia and Tower 909 at Irving have the potential to provide strong positive rental reversion of 11.2 per cent, 21.3 per cent, 17.7 per cent and 13 per cent, respectively, in Q4 FY2022,&rdquo he added.
Additionally, the analyst sees the Reit&rsquo s Class A offices as beneficiaries of a &ldquo flight to quality despite the gloom in the US office market&rdquo .
Koh likes Prime US Reit for its portfolio&rsquo s blue chip tenants such as Goldman Sachs and Sodexo, which rank among the Reit&rsquo s top 10 tenants and are noted to have strong credit standing. He views the 4.6 years weighted average lease expiry for its top 10 tenants as &ldquo healthy&rdquo .
&ldquo Some 73 per cent of tenants are in the established and growth sectors&rdquo , he noted, referring to areas which include science, technology, media and information sectors.
Fluctuating US interest rates are also unlikely to pose much risk to the Reit, the analyst said, as about 83 per cent of the Reit&rsquo s borrowings have been &ldquo prudently&rdquo fixed or hedged to fix rates.
While UOBKH projects the Reit&rsquo s capitalisation rate to increase by 50 basis points to 6.8 per cent due higher interest rates, the brokerage believes the resultant fall in aggregate leverage will lead to a &ldquo manageable&rdquo rise in gearing.
&ldquo We estimate a US$124.8 million drop in the fair value of investment properties, which causes aggregate leverage to deteriorate by 3.4 percentage points to 42.1 per cent but is well within the regulatory limit of 50 per cent,&rdquo he added.
Despite potential challenges, this company' s ownership of quality office buildings should allow them to weather any obstacles.
Disney CEO Bob lager orders staff return to office four days a week.
https://youtu.be/Nj7F1kuvbCs
Disney CEO Bob lager orders staff return to office four days a week.
https://youtu.be/Nj7F1kuvbCs
Down more than 50% from IPO price. Yields look attractive but is it too good to be true? Would have to see if there is any hit to valuation similar to MUST. Several of their assets have been facing declining occupancies and for those large vacancies, they' ve not been able to fill it. One other key issues for US REITs is that they have an issue with tenant incentives which can be quite a considerable amount of CAPEX upfront (e.g. several months of rental) to incentivize & attract new tenants to sign new (and longer leases). MUST is quite a telling sign for the US REITs but I may be wrong.
I bought at 0.39. Discount too attractive. Down side risk min.
deantfy ( Date: 13-Jan-2023 17:49) Posted:
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Anyone looking at this counter? went up these few days..
Prime US Reit Q3 distributable income down 4% on lower NPI
PRIME US Reit&rsquo s distributable income for the third quarter ended Sep 30 fell 4 per cent to US$19.2 million from a year ago, following a 6.1 per cent decrease in net property income (NPI) to US$24.2 million.
NPI slid amid year-on-year occupancy declines, said the manager. WeWork vacated in Q4 2021, while Whitney Bradley & Brown vacated in Q3 2022.
However, occupancy held steady at 89.6 per cent when compared with the preceding quarter. Gross revenue was up 3.1 per cent to US$40.6 million.
The Reit saw increased leasing activity during the quarter, with the leasing volume of 246,200 square feet (sq ft) coming close to the last two quarters&rsquo combined volume of 257,500 sq ft.
Rental reversion was 10.1 per cent for Q3, and positive for the 10th straight quarter.
The portfolio, which includes 14 prime US office properties, had a weighted average lease expiry of 4.1 years as at Sep 30.
The Reit&rsquo s gearing stood at 38.7 per cent with an interest coverage of 4.5 times. Its fully extended weighted average debt maturity was 2.9 years.
Tenant retention remains a priority, said the Reit&rsquo s manager. It plans to enhance assets to maintain buildings&rsquo competitiveness, and expand tenant engagement around ESG initiatives to support corporate ESG goals.
looks oversold at this level
PRIME has now dropped more than KORE, and right to say the 2+% drop in ppty income might not explain. Another issue I found but no answer (cos didn' t subscribe) is whether tax might become an issue again? Anyone with access and summarise the points?
...
https://www.reitsweek.com/2022/09/offshore-reits-with-us-assets-not-in-danger-of-tax-crackdown-say-singapore-managers.html
...
https://www.reitsweek.com/2022/09/offshore-reits-with-us-assets-not-in-danger-of-tax-crackdown-say-singapore-managers.html
makan makan makan
sure or not will affect ?????? 2.6% of the reit portfolio only what
https://www.theedgesingapore.com/capital/brokers-calls/healthy-assets-and-debt-headroom-pessimism-prime-us-reit-likely-overdone
i hope not market makers trying to scare us to makan our shares....
https://www.theedgesingapore.com/capital/brokers-calls/healthy-assets-and-debt-headroom-pessimism-prime-us-reit-likely-overdone
i hope not market makers trying to scare us to makan our shares....
Oh man. That will affect next half earnings
thanks for sharing this
thanks for sharing this
marketuncle ( Date: 05-Aug-2022 19:33) Posted:
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US office S-Reits will need to diversify tenant mix in response to work-from-home trend
REAL estate investment trusts (Reits) that own office properties in the United States are going through a rough patch that could be a precursor to monumental change.
Most Singapore-listed real estate investment trusts (S-Reits) are riding on the reopening of economies post-pandemic, while bracing for higher interest rates and higher inflation.
But S-Reits in the US office sub-sector are fending off macroeconomic headwinds on the one hand, while grappling on the other with an uncomfortable reality: Workers in the land of the free have become so used to working from home during the pandemic, they are refusing to return to the office.
&ldquo We thought they would come back, but we are taken aback that they are not back,&rdquo said Caroline Fong, Manulife US Reit&rsquo s chief investor relations and capital markets officer, at a recent briefing accompanying its second quarter results announcement.
&ldquo For Americans, it&rsquo s all about freedom. No employer has so forcefully said &lsquo you have to come back&rsquo , because they may be sued.&rdquo
Manulife US Reit : BTOU -0.85% reported physical occupancy of just 28 per cent across its portfolio as at Jul 11, improving from physical occupancy of 25.3 per cent in the first quarter. (Physical occupancy is the estimated number of people physically occupying the building. It is a different measure from portfolio occupancy, which reflects tenancy.)
According to Kastle System&rsquo s Back to Work Barometer, average physical occupancy across 10 major US cities hovered around 44 per cent in mid-July.
All 3 US office S-Reits &ndash Manulife US Reit, Prime US Reit : OXMU +0.7% and Keppel Pacific Oak US Reit : CMOU 0% (KORE) &ndash reported positive rental reversions for the latest period. But with the move towards hybrid work arrangements, some challenges are surfacing on the leasing front.
At its results briefing, Manulife US Reit disclosed that 2 major tenants are giving up space at its Figueroa asset &ndash a Grade A office building in Los Angeles.
TCW Group, a finance and insurance tenant that has been at Figueroa since the completion of the building in 1991, will be vacating its space when its lease expires in December 2023.
The Reit manager said TCW will be giving up the net lettable area (NLA) of 188,835 square feet (sq ft) &ldquo to avoid major renovation&rdquo .
Meanwhile, Quinn Emanuel Trial Lawyers is cutting its space by more than half. The legal tenant is downsizing its current 135,003 sq ft space by 71,000 sq ft effective end-August, while renewing the remaining 64,000 sq ft for another 5.4 years starting September.
TCW and Quinn Emanuel are the 2 largest tenants at Figueroa.
TCW is also Manulife US Reit&rsquo s second-largest tenant across its entire portfolio, accounting for 3.8 per cent of gross rental income (GRI).
Quinn Emanuel, currently the seventh-largest tenant portfolio-wide at 2.9 per cent of GRI, will account for 1.4 per cent of Manulife US Reit&rsquo s GRI post-downsizing.
Similar news was delivered at the results briefing of Prime US Reit &ndash professional services company Whitney, Bradley & Brown (WBB) has not renewed its lease, which expired in July.
WBB was Prime US Reit&rsquo s ninth-largest tenant portfolio-wide, contributing to 2.6 per cent of the Reit&rsquo s portfolio cash rental income (CRI) as at end-June.
It occupied 73,511 sq ft of Reston Square &ndash a 6-storey Class A office building in Virginia, which has a total NLA of 139,018 sq ft &ndash and its departure will bring the occupancy rate of the formerly fully occupied building to less than 50 per cent.
Such departures do not bode well for the US office S-Reits, whose portfolio occupancy rates have already dropped significantly since the start of the pandemic.
Prime US Reit&rsquo s portfolio occupancy was 89.6 per cent at end-June, down 6.2 percentage points (ppt) from 95.8 per cent at end-2019 &ndash before the start of the Covid-19 outbreak.
Manulife US Reit reported portfolio occupancy of 90 per cent in the latest period, falling from an occupancy rate of 95.8 per cent at the end of December 2019.
Over the same period, portfolio committed occupancy at KORE has dipped 1.6 ppt &ndash to 92 per cent at end-June, 2022.
On the face of it, occupancy rates at other pure-play office S-Reits with assets outside the US appear to be dwindling as well.
Elite Commercial Reit : MXNU +2.46%, which listed on the Singapore Exchange (SGX) in February 2020, reported an occupancy rate of 98 per cent at end-June. The Reit&rsquo s initial portfolio of United Kingdom properties was fully occupied at end-August, 2019.
Keppel Reit : K71U -0.9%, which owns mostly Singapore properties but also owns some assets in Australia and South Korea, posted portfolio occupancy of 95.5 per cent at end-June &ndash falling from 99.1 per cent at end-2019.
Nevertheless, the duo are unlikely to face the same headwinds as the US office S-Reits as a result of changing work patterns.
Over 99 per cent of Elite Commercial Reit&rsquo s portfolio is leased to the UK government, while physical occupancy at Keppel Reit&rsquo s Singapore-majority assets is seen to be healthy.
Manulife US Reit&rsquo s Fong suggested this could be because Singaporeans are more tractable, and have returned to the office when employers or the government said they should do so.
To help mitigate the impact of lower physical occupancy, Manulife US Reit said it is exploring a concept called the &ldquo hotelisation&rdquo of its office assets. The Reit is looking to partner operators to offer flexible workspace in its buildings, which will allow existing and prospective tenants to expand and contract as needed.
The Reit manager said this could include increased &ldquo experiential offerings&rdquo and common spaces, which will make its buildings a more &ldquo fun&rdquo and &ldquo comfortable&rdquo place to work.
It is exploring this hotelisation concept at its Michelson building in Irvine, with the possibility of turning the rooftop of the building into a space for F& B. Other ideas include converting the low floors into amenities such as gyms and lounges, and introducing outdoor chill-out areas.
Any potential turnaround, however, will not be witnessed immediately.
The Reit manager said it could immediately bring in operators to start the hotelisation transformation. But it conceded that, with the need for some asset enhancement works, any financial uplift that may be garnered from this hotelisation will only kick in from FY2023.
Manulife&rsquo s proposed shift in product mix is not new.
Capital Tower, a Grade A office tower in Singapore&rsquo s central business district that is owned by diversified S-Reit CapitaLand Integrated Commercial Trust (CICT) : C38U -1.41%, offers flexi-workspace options as well as a suite of business facilities such as auditorium and conferencing facilities. The building also houses a club fitness centre as well as some F& B and retail outlets.
Meanwhile, CICT&rsquo s CapitaSpring office tower literally shares the same address as the Citadines Raffles Place Singapore serviced residence. The latter also comes under the CapitaLand group umbrella.
In a recent interview with The Business Times, Tony Tan, chief executive officer of CICT&rsquo s manager, noted that integrated developments with a combination of office, retail and lodging spaces under one roof could become more common in Singapore in the future.
Manulife US Reit&rsquo s hotelisation idea may therefore be a step in the right direction &ndash and the Reit manager deserves kudos for attempting to arrest the problem of falling physical occupancy rates.
In the face of the changing landscape in the wake of the pandemic, the US office S-Reits may need to diversify to survive. And they will need funding to do so.
Because got bad news:
"The exiting tenant is professional services company Whitney, Bradley & Brown (WBB), which is ninth on the pure-play US office Reit?s list of top 10 tenants as at Jun 30, contributing 2.6 per cent of the Reit?s portfolio cash rental income (CRI)."
https://www.businesstimes.com.sg/companies-markets/exit-of-major-tenant-to-impact-prime-us-reit-in-q3-2022
baoyuk ( Date: 05-Aug-2022 18:23) Posted:
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not moving despite the good results
Prime US Reit H1 DPU rises 5.7% to US$0.0352
PRIME US Reit reported on Wednesday (Aug 3) a 5.7 per cent year-on-year increase in distribution per unit (DPU) for the first half ended Jun 2022, on the back of higher gross revenue and net property income.
DPU for the first half rose to US$0.0352 from US$0.0333 in the corresponding year-ago period. The higher DPU translates to an annualised distribution yield of 10.5 per cent per annum, based on the closing price of US$0.675 as at Jun 30 this year, Prime US Reit&rsquo s manager noted.
The book closure date is Aug 12, and the distribution will be paid on Sep 26.
Gross revenue rose 13.5 per cent on year to US$81.8 million in H1 2022 net property income was up 9.7 per cent on year to US$50.8 million. The manager said this was mainly attributable to 2 properties, Sorrento Towers in San Diego, California, and One Town Center in Boca Raton, Florida, which were acquired in July 2021.
Meanwhile, income available for distribution to unitholders rose 16.7 per cent from US$35.4 million in H1 2021 to US$41.3 million in H1 2022.
The manager said that lease renewal and executing new leases continue to be a key focus of management.
During the second quarter, some 85,733 square feet of leases were executed at a positive rental reversion of 10.9 per cent. The manager noted that new leases constituted 47 per cent of leases signed in the quarter, with new tenants diversified across finance, professional services and health-care tenants.
Collections remained above 99 per cent in H1 2022 with no deferrals, and occupancy remained stable at 89.6 per cent, the manager added. The portfolio had a weighted average lease expiry of 4 years.
The Reit&rsquo s gearing stood at 37.8 per cent as at Jun 30 2022. Prime US Reit&rsquo s manager said 86 per cent of the Reit&rsquo s debt is fixed rate or swapped from floating to fixed rate its fully extended weighted average debt maturity is 3.2 years, mitigating near-term interest rate and refinancing risks in the current rising rate environment.
Barbara Cambon, chief executive of Prime US Reit&rsquo s manager, said: &ldquo We continue to take a proactive approach to leasing, asset management as well as capital allocation, and we remain strategic and deliberate in our evaluation of quality, accretive acquisitions that add value to unit holders.&rdquo
Half year distribution of 3.52 cents. Annualised yield at current price is 9.8% which is crazy considering this is a stable REIT with a good portfolio and gearing of approx 38%. Fair value should be about 94 cents in my opinion (yield of approx 7.5%), suggesting upside of about 32%. DYODD.
Subsidiary of SPH disposes 38 million units in Prime US REIT via married deal
marketuncle ( Date: 16-Jun-2022 19:46) Posted:
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There was some married deal on this. Otherwise REITs with forex exposure are deemed higher risk and given risk free returns already exceed 3%, investors have to demand corresponding higher yield from riskier assets.
https://www.theedgesingapore.com/capital/right-timing/investors-flight-quality-risk-free-rates-rise
https://www.theedgesingapore.com/capital/right-timing/investors-flight-quality-risk-free-rates-rise
This REit price has been dropping since late 2021 from 88 to the present 68.
What is the reason for this massive drop?
What is the reason for this massive drop?