SINGAPORE (June 24): US office REITs are enjoying strong portfolio resiliency amid the economic uncertainty of Covid-19. DBS Research’s Rachel Tan and Derek Tan have reported healthy rent collections of more than 90% in the April-May period and portfolio occupancy of 94-97% as of 1Q20. On top of this, expiring leases for FY20 have fallen 4-6% after factoring leases renewed and signed in 1Q20, suggesting stable cash flow going forward. 

PRIME US REIT, in particular, has experienced near-perfect rental collection during the lock-down as even at-risk tenants have continued to pay their rents. “Prime continued to display the quality of its portfolio and management capabilities with successfully collected 99% of its rents in Apr and May during the lockdown period, including at-risk tenants,” say the analysts. There have so far been few requests for rental relief from the REIT’s tenants. 

The REIT is a geographically diversified portfolio of 11 Class A freehold prime office assets in the US. Strongly weighted to major US cities, around 70% of its portfolio comprises properties in Denver, Salt Lake City, Atlanta, Washington D.C. (Suburban Maryland and Virginia) and San Francisco Bay Area (Oakland). Its net leasable area (NLA) of approximately 3.4 million square feet is valued at US$1.2 billion (S$1.6 billion). 

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