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REITs investing & personal finance

Monday, August 22, 2022

Prime US REIT Review @ 22 August 2022

Basic Profile & Key Statistics
  • Main Sector(s): Office
  • Country(s) with Assets: United States
  • No. of Properties (exclude development/associate/fund): 14

Key Indicators

Performance Highlight

Gross revenue, NPI, distributable income and DPU improved yoy mainly due to contributions from One Town Center and Sorrento Towers which were acquired in July 2021. The DPU includes amortized lease termination fees, which would be in place until mid-4Q 2022.

Rental Reversion

Rental reversion for 2Q is at positive 10.9%.

Related Parties Shareholding

  • REIT sponsor's shareholding: Below median for more than 20%
  • REIT manager's shareholding: Below median for more than 20%
  • Directors of REIT manager's shareholding: Below median for more than 20%

Lease Profile

  • Occupancy: Below median for more than 5% 
  • WALE: ± 10% from median
  • Highest lease expiry within 5 years: Below median for more than 20%; Falls in 2025
  • Weighted average land lease expiry: 100% freehold properties

Debt Profile

  • Gearing ratio: ± 10% from median
  • Cost of debt: Above median for more than 20%
  • Fixed rate debt %: Above median for more than 10%
  • Unsecured debt %: 0%
  • WADM: Below median for more than 10%
  • Highest debt maturity within 5 years: Above median for more than 20%; Falls in 2024
  • Interest coverage ratio: Above median for more than 10%

Diversification Profile

  • Top geographical contribution: Below median for more than 20%
  • Top property contribution: Below median for more than 20%
  • Top 5 properties' contribution: Below median for more than 10%
  • Top tenant contribution: Below median for more than 20%
  • Top 10 tenants' contribution: ± 10% from median

Key Financial Metrics

  • Property yield: Above median for more than 20%
  • Management fees over distribution: Below median for more than 20%; $9.80 distribution for every dollar paid 
  • Distribution on capital: Above median for more than 20%
  • Distribution margin: ± 10% from median


  • Flat: DPU, NAV per Unit, Distribution Margin
  • Slight Downtrend: Interest Coverage Ratio, Distribution on Capital
  • Downtrend: Occupancy, Property Yield

Relative Valuation

  • P/NAV: Below -1SD for 1y, 3y & 5y
  • Dividend Yield: Above +2SD for 1y, 3y & 5y

Author's Opinion

 Favorable Less Favorable
Well Spread Lease ExpiryLow REIT Sponsor's Shareholding
100% freehold propertiesLow REIT Manager's Shareholding
High Fixed Rate Debt %Low Directors of REIT Manager's Shareholding
High Interest Coverage RatioLow Occupancy
Low Top Geographical ContributionHigh Cost of Debt
Low Top Property & Top 5 Properties Contributions0% Unsecured Debt
Low Top Tenant ContributionShort WADM
High Property YieldConcentrated Debt Maturity
Competitive Management FeesOccupancy Downtrend
High Distribution on CapitalProperty Yield Downtrend

Performance is similar to the previous quarter and the occupancy has declined slightly again. The good thing is that PRIME achieved positive rental reversion for the last 8 quarters (exclude those leases lesser than 1 year). DPU is able to maintain probably due to high rental revision as well as amortized termination fees of WeWork, which will cover the lease payments through to mid-4Q 2022. 

You could also refer below for more information:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and Detail of Singapore REIT

REIT Analysis - List of previous REIT analysis posts

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*Disclaimer: Materials in this blog are based on my research and opinion which I don't guarantee accuracy, completeness, and reliability. It should not be taken as financial advice or a statement of fact. I shall not be held liable for errors, omissions and loss or damage due to 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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