Prime US REIT has reported distributable income of US$20.9 million ($29.1 million) for the 1QFY2022 ended March, up 19% y-o-y.
The REIT’s two new assets, Sorrento Towers and One Town Center contributed to the growth.
For the 1QFY2022, Prime US REIT’s gross revenue increased 13.6% y-o-y to US$40.8 million while net property income (NPI) increased 10.4% y-o-y to US$25.4 million.
As at end-March, the REIT reported a slight dip in portfolio occupancy to 89.9% from 90.3% in the previous quarter.
That said, the occupancy rate remains well above the US Class A 4/5 Star office average of 83.3% reported by CoStar as at May 9.
The portfolio maintained strong rent collections of over 99% for the quarter with no deferrals and averaged above 99% through from FY2020 into 1QFY2022
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Its weighted average lease expiry (WALE) stood at 4.2 years, with upcoming lease expiries well spread across its portfolio.
In the 1QFY2022, Prime US REITs parking revenues increased by over 30%, in line with the return to the office in the US.
The REIT’s strong office leasing momentum continued in the quarter as more tenants made longer-term leasing decisions.
During the quarter, the REIT also saw stronger leasing activity, which more than doubled y-o-y. In the 1QFY2022, the REIT saw 171,747 sq ft of leases executed at a positive rental reversion of 3.4%.
Renewals constituted the majority of the leasing activity for 1Q2022, and the company also executed 55,423 sq ft of new leases from tenants in the established, tech and professional services sectors.
A further 46,000 sq ft of leases have been executed in the 2QFY2022 to date, bringing year-to-date leasing volumes to over 217,000 sq ft, at a cumulative positive rental reversion of 6.0%.
As at end-March, the REIT’s gearing stood at 39.1% with debt headroom of US$371 million at a leverage limit of 50% and US$202 million of undrawn facilities.
Its interest coverage stood at 5.2x.
Looking ahead, the REIT manager says it will continue to identify components to support employers’ long-term workspace needs. It is also exploring accretive acquisition opportunities in non-gateway and in key US office markets.
“Prime’s income resiliency continues to be underpinned by our diversified portfolio in favourable US office markets with strong economic and investment characteristics, and our focus on key growth technology and established industry sectors,” says Barbara Cambon, CEO of the manager.
“As a facilitator of collaborative spaces and growth, we continue to leverage technology and engage in close communications with our tenants to provide safe, healthy and conducive environments to assist their return-to-office. This is progressing well as evidenced by our strong leasing momentum,” she adds. “We will continue to pursue accretive acquisitions and attract prospective tenants in growth-oriented urban centres, and we remain committed to delivering long-term sustainable growth to our unitholders and supporting our tenants’ long-term workspace needs.”
Units in Prime US REIT closed 1.5 US cents higher or 2.11% up at 72.5 US cents on May 11.
