Prime US REIT - DBS Research 2019-11-08: Off To A Good Start

PRIME US REIT (SGX:OXMU)

Prime US REIT - Off To A Good Start

Prime US REIT reported its first set of results post listing, with DPU at 1.38 US cts, 5.3% ahead of its forecast.
Revenue and NPI were 2.3% and 2.8% higher than its forecast mainly driven by higher occupancy.
Management continues to look for acquisition opportunities as it works towards its target of c.20% p.a. growth.
Maintain BUY; Target Price of US$1.05.

PRIME US REIT (SGX:OXMU) reported its first set of results post listing, for the period from 19 July to 30 September 2019, with DPU at 1.38 US cts, ahead of its forecast of 1.31 US cts (+5.3%). See Prime US REIT Announcements; Prime US REIT Dividend History.
Revenue and NPI were 2.3% and 2.8% higher than its forecast largely due to higher rental income and recoveries income.
Operations were stable with occupancy at 97% (same as FY19 forecast), up from 95.7% as at FY18 proforma.
Lease expiry renewals for FY19 and FY20 remain low, falling marginally to 4.9% and 6.5% vs 5.8% and 7.1% previously.
Gearing remained healthy at 33.9% as at September 2019 with a debt headroom of c.US$78m and US$141m, with gearing at 40% and 45% respectively.

According to management, the office market remains generally stable with some positive rental reversions seen in renewals during this quarter. However, the low level of lease renewals for this quarter may not be a good representation.
Management expects to continue to see positive rental reversions in the near term.
Management continues to look for acquisition opportunities as it works towards its target of c.20% p.a. growth.
See Prime US REIT Share Price; Prime US REIT Target Price.

Rachel TAN DBS Group Research | Derek TAN DBS Research | https://www.dbsvickers.com/ 2019-11-08

SGX Stock Analyst Report BUY MAINTAIN BUY 1.050 SAME 1.050