Prime US Reit Q3 distributable income down 4% on lower NPI

PRIME US Reit’s distributable income for the third quarter ended Sep 30 fell 4 per cent to US$19.2 million from a year ago, following a 6.1 per cent decrease in net property income (NPI) to US$24.2 million.

NPI slid amid year-on-year occupancy declines, said the manager. WeWork vacated in Q4 2021, while Whitney Bradley & Brown vacated in Q3 2022.

However, occupancy held steady at 89.6 per cent when compared with the preceding quarter. Gross revenue was up 3.1 per cent to US$40.6 million.

The Reit saw increased leasing activity during the quarter, with the leasing volume of 246,200 square feet (sq ft) coming close to the last two quarters’ combined volume of 257,500 sq ft.

Rental reversion was 10.1 per cent for Q3, and positive for the 10th straight quarter.

The portfolio, which includes 14 prime US office properties, had a weighted average lease expiry of 4.1 years as at Sep 30.

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The Reit’s gearing stood at 38.7 per cent with an interest coverage of 4.5 times. Its fully extended weighted average debt maturity was 2.9 years.

Tenant retention remains a priority, said the Reit’s manager. It plans to enhance assets to maintain buildings’ competitiveness, and expand tenant engagement around ESG initiatives to support corporate ESG goals.

The counter closed at US$0.465 on Tuesday (Nov 8), down US$0.01 or 2.1 per cent.