Broadening Growth
Acquisitions add growth, strengthen AUM
PRIME has added two new US markets to its portfolio, as it expands into
San Diego and Florida, with its latest deals. The freehold office properties
are well-sited in attractive submarkets, and backed by strong attributes,
and we expect its resilient tenancies to strengthen PRIME’s AUM growth
profile. The favourable lease structures (with +3% pa rental escalations)
and longer WALEs should reinforce its DPU visibility, while rising leasing
momentum suggests further positive rental reversions. We maintain DPUs
pending deal closure, as valuations are compelling at 8% FY21 DPU yield,
and >30% upside to our USD1.10 DDM-based TP (COE: 8.3%, LTG: 2.0%).