Prime US Reit's Q1 net property income exceeds IPO projections by 6.7%

IN A business update, Prime US Reit on Tuesday announced that its first-quarter net property income stood at US$23.5 million, exceeding IPO projections by 6.7 per cent.

Its gross revenue exceeded projections as well, by 4.1 per cent to hit US$35.1 million; its distributable income stood at US$17.6 million for the first quarter, exceeding the IPO projection by 12.9 per cent.

This outperformance was primarily driven by the accretive acquisition of Park Tower in Sacramento on Feb 24, higher net property income from the IPO portfolio, and lower finance and other trust expenses.

Prime US Reit maintains a conservative debt maturity profile and a gearing ratio of 33.7 per cent. The Reit has fixed interest rates on 89.1 per cent of its debt, which removes any near-term interest-rate risk and an interest coverage of 5.8 times. The Reit manager is actively reviewing options to take advantage of the current low interest rate environment to generate interest cost savings. The total outstanding debt amount of US$488 million has a weighted average debt to maturity of 4.8 years with no near-term refinancing risk, said the Reit manager.

Barbara Cambon, chief executive officer and chief investment officer of Prime US Reit's manager, said that its "diversified portfolio characteristics and strong balance sheet", with no refinancing until 2024, will "provide stability in these uncertain times".

"We are actively working with our tenants to navigate through the economic impact of Covid-19. To date, we have collected substantially all of our rent," she said. "We remain focused on delivering stable performance and managing our capital structure prudently while continuing to seek acquisitions that will provide long-term value to unitholders."