The manager of Prime US REIT OXMU has reported a lower income available for distribution of US$14.7 million ($19.9 million) for the 3QFY2023 ended Sept 30, 23.4% lower than the figure in the same period the year before.
This was due to US$1.6 million higher finance expenses on the back of rising interest rates and the absence of lease termination income added back to distributable income in 3QFY2023, compared to the US$1.3 million recorded in 3QFY2023.
The lower DPU and distributable income were also due to the manager’s decision to receive 100% of its base fee in cash, compared to the same period the year before. In FY2022, the manager opted to receive 20.0% of its base fee in cash with the balance of 80% in the form of units.
Distributable income would have been down by 16.6% y-o-y from $17.7 million if the manager had opted to receive its base fee wholly in cash the year before.
In 3QFY2023, gross revenue slipped by 0.9% y-o-y to US$40.2 million, while NPI fell by 3.3% y-o-y to US$23.4 million.
The quarter just ended saw the increased momentum of workers returning to offices as employers reinstated stricter office attendance mandates, with office attendance 8% higher y-o-y.
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There was also an uptick in new space requirements q-o-q that saw an 8% increase in secondary markets.
Positive leasing momentum also meant that 3Q2FY2023 leased more than the whole of 1HFY2023 combined, continuing to drive upwards going into the last quarter of FY2023.
The period also saw a lease extension by top tenant Charter Communications for 94,000 sqft at Prime US REIT Village Center Station 1 in Denver, Colorado, with “notable” leasing discussions at several of the REIT’s assets.
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As at Sept 30, the REIT’s leased occupancy stood at 85% with a weighted average lease expiry (WALE) of 3.8 years.
The REIT’s aggregate leverage stood at 43.7% with an interest coverage ratio of 3.2x as at the same period.
Units in Prime US REIT closed 2.1 US cents or 14.89% up at 16.2 US cents on Nov 7.
