REIT-TIREMENT - REIT Investing and Personal Finance

A blog about REIT investment and personal finance

Thursday, September 10, 2020

U.S. Office Focused SREITs - KORE vs MUST vs PRIME

It has been a long time since I do a comparison for the same REIT sector. Today, let's try to do a quick comparison for U.S. Office SREITs. For mobile user, please view in landscape mode.


Name

Keppel Pacific Oak REIT,

KORE

Manulife US REIT,
MUST

Prime US REIT,

PRIME

Basic & Key Statistics

Listed Date

9-Nov-2017

20-May-2016

19-Jul-2019

Dividend Frequency

Semi-Annual

Unit Price

USD 0.720

USD 0.765

USD 0.795

Dividend Yield

8.49%

7.80%

8.81%

Price / NAV

0.90

1.00

0.91

Market Cap

USD 0.68 Billion

USD 1.2 Billion

USD 0.84 Billion

Related Parties Shareholding

REIT Sponsor

7.37%

8.57%

1.96%

REIT Manager

0.86%

0.25%

0.47%

Directors of REIT Manager

0.87%

0.12%

2.50%

Lease Profile

Committed Occupancy

94.3%

96.2%

93.0%

Weighted Average Lease Expiry, WALE

4.1 years

5.7 years

4.8 years

Highest Lease Expiry in 5 Years

17.2%

17.1%

18.6%

Number of Properties

13 units

9 units

12 units

Weighted Average Land Lease Expiry

All Freehold Properties

Debt Profile

Gearing Ratio

37.4%

39.1%

33.0%

Interest Cover Ratio

4.4 times

3.8 times

5.4 times

Cost of Debt

3.3%

3.3%

2.6%

Fixed Rate Debt Proportion

84.3%

92.7%

90.0%

Unsecured Debt Proportion

100.0%

0.0%

0.0%

Weighted Average Debt Maturity, WADE

2.5 years

2.3 year

4.6 years

Highest Debt Maturity in 5 Years

28.9%

26.8%

33.0%

Diversification Profile

Top Geographical Contribution

42.4%

34.6%

15.6%

Top Property Contribution

18.7%

18.0%

14.0%

Top Tenant Contribution

3.6%

6.2%

8.5%

Top 10 Tenants Contribution

19.9%

35.8%

43.0%

Key Financial Metrics

Property Yield

6.6%

6.0%

7.1%

Management Fees over Distribution

10.0%

11.5%

10.2%

Distribution on Capital

4.6%

4.5%

5.2%

Distribution Margin

40.9%

47.3%

49.2%

Growth Trend (Since IPO)

DPU

Slight Uptrend

Flat

Flat

NAV per Unit

Slight Downtrend

Slight Downtrend

Flat

Interest Cover Ratio

Downtrend

Downtrend

Flat

Property Yield

Flat

Flat

Slight Downtrend

Distribution Margin

Flat

Slight Downtrend

Slight Uptrend

* Above information is extracted from SREITs Dashboard.

** Growth Trend for DPU is not adjusted for any equity fundraising.


Let's not assign any weightage and only focus on the number of green highlighted items. Below is the summary for REIT with better position by categories:

1) Related Parties Shareholding - Tie

2) Lease Profile - MUST 

3) Debt Profile - PRIME

4) Diversification - PRIME & KORE

5) Key Financial Metrics - PRIME

6) Growth Trend - PRIME

7) Overall - PRIME, followed by KORE


How about relative valuation?

Name

Keppel Pacific Oak REIT
KORE

Manulife US REIT
MUST

Prime US REIT
PRIME

52 Weeks

High

USD 0.800

USD 1.080

USD 1.070

Low

USD 0.390

USD 0.545

USD 0.500

Current

USD 0.720

USD 0.765

USD 0.795

Average Yield

High

9.91%

8.54%

8.53%

Low

6.91%

5.74%

7.27%

Average

8.12%

7.15%

7.81%

Current

8.49%

7.80%

8.81%

Average Price/NAV

High

1.00

1.19

1.09

Low

0.76

0.87

0.83

Average

0.90

1.03

1.00

Current

0.90

1.00

0.91

PRIME seems more undervalued in terms of relative valuation.


Above is just a quick comparison for the 3 U.S. office focused SREITs, you could refer more detail on the individual analysis below:

Keppel Pacific Oak US REIT (Previously Keppel-KBS US REIT) Analysis @ 2 August 2020

Manulife US REIT Analysis @ 4 August 2020

Prime US REIT Analysis @ 8 August 2020


For more information, you could refer:

SREITs Dashboard - Detailed information on individual Singapore REIT as well as summary

SREITs Data - Overview of Singapore REIT

REIT Analysis - List of previous REIT analysis posts

REIT Investing Community - Facebook Group where members share and discuss REIT topic


*Disclaimer: Materials in this blog are based on my research and opinion which I don't guarantee the accuracy, completeness, and reliability. It should not be taken as financial advice or statement of fact. I shall not be held liable for errors, omissions as well as loss or damage as a result of the use of the material in this blog. Under no circumstances does the information presented on this blog represent a buy, sell, or hold recommendation on any security, please always do your own due diligence before any decision is made.

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