Prime US REIT is looking to IPO soon, with the application period currently open till next Monday, 15 July 2019. I’ve actually already written an IPO review for DrWealth which you can check it out through the link provided.
As such, for this post, I’ll not dive into in-depth specifics but rather delve into something I couldn’t do on that post – prepare more dashboards 😛 Here is a summary of financial and operational indicators for the upcoming Prime US REIT IPO for your quick reference.
Offering Overview
Portfolio Indicators
Financial Indicators
Briefing Highlights
One thing I didn’t get to add to the DrWealth article was some insights I got from an analyst briefing I attended. Here are 3 that I found insightful:
1) Growth Plans
I mentioned in my article that equity fundraising will likely be needed post-IPO for growth. Management mentioned that their current internal target is to grow the portfolio by 20% in the first year of listing. Timing of this acquisition is likely after the payment of the 1st dividend, which is currently planned in Q1 2020.
Given the size of the growth target and limited debt headroom, it’s probably safe to expect equity fundraising in Q2 2020.
2) Target Gearing
Management has an internal guideline to not cross the 40% gearing threshold. That said, given that MAS is looking to potentially revise gearing limits in the near future, management will be willing to looking into raising the gearing threshold.
This is interesting to me as some REITs like FLT have different reactions to this move by MAS.
Our comfort zone for FLT's gearing is in the 30s (per cent), so we probably will not venture beyond that even if the limit is increased to 50 per cent.
3) Occupancy at Emeryville property
One observation I had of the property portfolio was the relatively low occupancy of Tower 1 Emeryville and I asked management to enlighten me on the cause of the low occupancy and the latest occupancy rates at the property.
Apparently 2 tenants abruptly left the property and they had to search for new tenants. Currently the occupancy of the building is back to about 91%, so no worries there.
The Prime US REIT IPO is currently available for subscription and will close next Monday at 12pm. It will begin trading at 2pm, 19 July.
Other US IPO articles
ARA US Hospitality Trust IPO Review
Eagle Hospitality Trust IPO Review
Follow up on Eagle Hospitality Trust
Happy Hunting,
KK
If you love the articles I write, follow me on Facebook, Twitter, InvestingNote, StocksCafe or subscribe to my blog and never miss another article!