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Prime US Reit's Q3 net property income exceeds IPO projections

PRIME US Reit reported a net property income of US$24.2 million in the third quarter, exceeding IPO projections by 9.8 per cent, according to an exchange filing on Thursday evening.

Its gross revenue also outperformed IPO forecasts by 9.1 per cent at US$36.7 million, while distributable income stood at US$18 million, outdoing projections by 15.4 per cent.

This was attributed to strong rental collections at 99 per cent with minimal deferrals and robust leasing activity of 83,168 square feet in Q3 with 8.9 per cent positive rental reversion, the real estate investment trust (Reit) manager said.

With a net asset value per unit of US$0.86, the Reit manager said, Prime maintains a conservative debt maturity profile and a healthy gearing ratio of 32.7 per cent. It added that it has ample debt headroom of US$324 million with US$98.9 million of undrawn facilities.

Prime has fixed interest rates on 91.4 per cent of its debt and a fully extended weighted average debt to maturity of 4.9 years, the Reit manager said. Its interest coverage was 5.8 times for the period ended Sept 30, and effective interest cost was a low 2.7 per cent, following the restructuring of its interest rate swaps in April, it said.

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"As tenants return to the office, we work closely with our asset management team to enhance health and safety measures by leveraging technology, improving building operations and facilitating social distancing and hygiene standards across our properties," Barbara Cambon, chief executive and chief investment officer of the manager of Prime, said.

Prime units closed one US cent, or 1.36 per cent, higher at 74.5 US cents on Thursday.

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