Prime US REIT's Rental Reversion

Prime US REIT’s Rental Reversion Hits 20.2% In Q4

USA – The manager of Prime US REIT, which owns office properties in the United States, revealed that its office rental reversion reached 20.2 percent in Q4 2022 and it marks 11 consecutive quarters of positive rental reversion, with over 99 percent of its office leases having rental escalations, according to Singapore Exchange (SGX) filings published on Wednesday evening (8 February, SGT).

Moreover, the Singapore-listed real estate investment trust (REIT) disclosed that its office portfolio occupancy held steady at around 89.1 percent during the last quarter of the prior year, while its weighted average lease expiry (WALE) was healthy at 4.1 years.

Office rental activity also remained active, with 142,800 sq ft of office leases signed in Q4 2022. In the second half of last year, leasing volume reached 389,000 sq ft, exceeding that in H1 2022 (257,000 sq ft) and H2 2021 (282,000 sq ft).

For the whole of 2022, overall office rental volume hit 646,500 sq ft. Of this, new leases accounted for 33 percent, while renewals made up the remaining 67 percent. Tenants come from different industries, such as finance, legal services, manufacturing, and biotechnology, as well as scientific research and development (R&D) services.

While Prime US REIT’s gross revenue edged up by 4 percent year-on-year to US$163.01 million in 2022, its net property income (NPI) dipped by 2.7 percent to US$97.93 million. Nonetheless, its distributable income gained 2 percent to US$77.15 million.

“Looking ahead, as more tenants implement their return-to-office plans in 2023, Prime US REIT’s manager is working with the asset and property teams to drive rent growth, to carry out timely amenitisation and enhancements, while maintaining prudence in our capital management strategies to maximize long-term returns to unitholders,” added Barbara Cambon, the CEO of Prime US REIT’s manager.

Furthermore, Prime US REIT disclosed that Cambon will be retiring effective on 8 March 2023. She will be replaced by the current Deputy Chief Executive and Chief Financial Officer, Harmeet Singh Bedi.

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