Prime US Reit posts 0.9% rise in H2 DPU to US$0.0345

PRIME US Reit OXMU on Wednesday (Feb 16) posted distribution per unit (DPU) of US$0.0345 for the second half of the year ended December 2021, up 0.9 per cent from a DPU of US$0.0342 in the corresponding year-ago period.

This took the Reit's DPU for the full FY2021 to US$0.0678, down 2.3 per cent from US$0.0694 in FY2020.

The book closure date for H2 distributions is Feb 24, and unitholders can expect to receive payments on Mar 31.

Gross revenue for H2 was up 17 per cent year on year to US$84.7 million from US$72.4 million, due to contributions from the acquisition of One Town Center and Sorrento Towers which were acquired in July last year.

Property operating expenses were up 22.1 per cent to US$30.3 million due to higher expenses in One Town Center and Sorrento Towers.

Consequently, net property income rose by a more muted 14.3 per cent to US$54.4 million from US$47.5 million, as the rise in property operating expenses ate into the increase in topline.

Distributable income to unitholders for H2 came in at US$40.2 million, up 11 per cent from US$36.2 million in the year-ago period due to new acquisitions which also contributed to growth and diversification of income for the Reit.

Prime US Reit also booked a loss in net fair-value change in investment properties of US$17.2 million for H2, narrower than the loss of US$28.9 million in the year-ago period. This was driven mainly by fair-value losses on One Washingtonian Center, Reston Square, Village Center I, and Park Tower, but offset partially by gains on 171 17th Street.

Leasing volume for H2 more than doubled from H1, with 282,199 square feet (sq ft) leased. This brought FY2021 leasing volumes to 414,632 sq ft with a positive rental reversion of 14.1 per cent.

New leases accounted for 21 per cent of total leasing volume in FY2021, said Prime US Reit.

As at end-December 2021, the Reit's portfolio occupancy stood at 90.3 per cent, with a portfolio weighted average lease expiry of 4.2 years.

With the acquisition of Sorrento Towers and One Town Center, the Reit's enlarged portfolio value stood at US$1.65 billion as at end-December 2021.

The Reit's gearing stood at 37.9 per cent with available credit facilities in excess of US$230 million and debt headroom of US$405.8 million at 50 per cent leverage limit.

Barbara Cambon, chief executive of Prime US Reit's manager, said: "Our strategy to capture leasing and growth opportunities in key non-gateway markets as the economy regains momentum continues to support our strong performance.

"As job growth and recent leasing activity indicate a nascent recovery and tenants' confidence in the return to office, we continue to identify market and asset attributes that employers seek, to best support their long-term workspace needs."

Units of Prime US Reit ended Wednesday flat at US$0.83.