Prime US REIT: Buy Rating Amidst Growth Potential and Attractive Valuation

Prime US REIT (OXMU – Research Report), the Real Estate sector company, was revisited by a Wall Street analyst today. Analyst Darren Chan from Phillip Securities maintained a Buy rating on the stock and has a $0.20 price target.

Darren Chan has given his Buy rating due to a combination of factors that highlight the potential for growth and value in Prime US REIT. Despite a significant decline in the distributable income and dividend per unit for FY24, the REIT’s portfolio valuations have increased by 2.2% year-over-year, reaching US$1.352 billion. This growth is attributed to stronger operating performance and positive leasing momentum, even amidst rising cap and discount rates.
Looking forward, the REIT is expected to benefit from a return to full distribution in FY26, supported by higher portfolio occupancy and reduced capital expenditure. The current share price reflects a substantial discount, trading at 0.26 times the price-to-net asset value, which presents an attractive investment opportunity. Additionally, the improving leasing momentum and the trend of employers mandating a return to office work are expected to further bolster the REIT’s performance.

According to TipRanks, Chan is a 2-star analyst with an average return of 1.2% and a 43.90% success rate. Chan covers the Real Estate sector, focusing on stocks such as Ascott Residence, Frasers Centrepoint, and Keppel DC REIT.