Prime US REIT · SGX:OXMU
Prime US REIT — FY2022 Earnings Presentation
22 slides from Prime US REIT's earnings presentation, Feb 8, 2023
Slide 1: Financial Results 2H2022 and FY2022
Financial Results 2H2022 and FY2022 8 February 2023 OPERATIONAL UPDATE | JULY 2021
Slide 2: Important Notice
Important Notice This document may contain forward-looking statements that An investment in Units is subject to investment risks, including the involve assumptions, risks and uncertainties. Actual future possible loss of the principal amount invested. Holders of Units performance, outcomes and resul
Slide 3: Content
Content Key Highlights 04 Financial Update 05 171 17th Street One Town Centre 222 Main Atlanta, Georgia Boca Raton, Florida Salt Lake City, Utah Portfolio Update 11 Current Market 16 Environment Tower 909 Crosspoint Dallas, Texas Philadelphia, Pennsylvania 2H2022 & FY2022 RESULTS | FEBRUARY 2023 3
Slide 4: Key Highlights
Key Highlights Leasing Remain Active Strong Financial Flexibility Staying Robust 1 Amidst External Transitory Headwinds 2 Prudent Capital Management & 3 Diversification Hedging Strategy Near-term Focus: Organic Growth Occupancy Positive Aggregate ▪ PRIME’s 100% Class A Freehold Held Steady Interest
Slide 5: FY2022 Income Available For Distribution up 2.0% yoy
2H2022 DPU at FY2022 Income Available For Distribution up 2.0% yoy US 3.03 cents US$‘000 2H2022 2H2021 Variance FY2022 FY2021 Variance 2H2022 Gross Revenue 81,208 84,6721 (4.1%) 163,012 156,7411 +4.0% ▪ Rental income in 2H2021 included termination income (not earned in Net Property Income (Note A) 4
Slide 6: Financial Position Remain Strong Amidst External Headwinds
Financial Position Remain Strong ▪ Balance sheet remains healthy with overall debt and gearing levels being Amidst External Headwinds managed prudently. ▪ 100% payout of distributable income US$ M 31 Dec 2022 Investment Properties 1,542.2 DPU for the period from Total Assets 1,589.0 1 July to 31 Dec
Slide 7: 2022 Year-End Valuations – Higher Discount and Cap Rates
2022 Year-End Valuations – Higher Discount and Cap Rates ✓ In current environment, discounted cashflow method is the primary valuation metric ✓ Increases in discount rate and cap rate predominated drivers of valuation change ✓ Factored in relevant property-level assumptions Stable Occupancy Properti
Slide 8: Debt Summary
As at 31 December 2022 Debt Summary Debt Undrawn & Gross Aggregate Borrowings Headroom Available (drawn) Leverage to 50% Facilities1 US$668.6m 42.1% ▪ Increase in gearing due to year-end US$250.9m US$196m portfolio revaluations as of December 31, 2022 All-in Weighted Effective Weighted Interest Aver
Slide 9: Summary of Credit Facilities
Summary of Credit Facilities Debt Maturity Profile^ (US$m) ✓ No refinancing obligation till July 2024^ for Main Credit Facility ✓ Ample liquidity with US$196m available in undrawn credit lines ✓ US$330m (out of US$400m) hedged till Jun-2026 ✓ Minimal fees for extension of Main Credit Facility and Ci
Slide 10: Interest Rate Management
Interest Rate Management Debt Hedged or Fixed ✓ High % Debt Hedged/Fixed Provides Protection in Current Rate Environment (As at 31 Dec 2022) ✓ Benchmark Rate for US$330m out of the Main Facility’s Term Loan 1 & 2 (US$400m) Hedged Till June 2026, Beyond fully extended maturity in July 2024^ 82% 65% t
Slide 11: Consistent Positive Rental Reversion for 11th Consecutive Quarter
Consistent Positive Rental Reversion ▪ Leasing remain active with 142.8k sq ft of leases executed at a positive rental for 11th Consecutive Quarter reversion of +20.2% in 4Q2022. FY2022 Leasing activity: 646.5k sq ft 15.3% 20.2% 4.1 years FY2022 Rental reversion: +11.4% of Portfolio Leased in Positi
Slide 12: Positive Reversion Potential Remains In Place
Positive Reversion Potential Remains In Place Primary % Asset % Lease expiry Annual In Annual Properties Occu- WALE Potential ▪ Occupancy remained stable remaining Market, Carrying in 2023 Place Rent Asking Rental at 89.1% as at end 4Q2022 (As at 31 December 2022) pancy (years) State Value by CRI (1
Slide 13: Diversified Income Provides Stability
Washington DC (Virginia) Geographic San Antonio Salt Lake San Francisco Bay City Diversification Area (Oakland) 1.9% 5.3% Diversified Income CRI by Primary Market 12.1% Washington DC (Maryland) 5.3% Atlanta 6.8% Provides Stability Primary 11.9% 13 Markets St. Louis 6.8% No single market 6.8% 10.1% P
Slide 14: Top 10 Tenants Sector Diversification Adds to Resiliency
Top 10 Tenants Sector Diversification Tenant Industry Credit Rating Property Leased sq ft % of Portfolio CRI1 Adds to Resiliency Charter Communications Communications Moody's: Ba1 Village Center Station I & II 419,881 8.4% Legal Services Moody's: A2 Goldman Sachs Finance S&P: BBB+ 222 Main 177,206 5
Slide 15: Submarket Outlook
Submarket Outlook Class A PRIME’s Projected Metro PRIME’s Submarket ▪ Occupancy at State Occupancy Rent growth Submarket Properties Occupancy Rate (%) (%)1 Rate1 (%) San Fran/Oakland Tower I at Emeryville 76.1% 78.0% +1.6% 9 of PRIME’s 14 California Oakland/Emeryville/Berkeley properties higher than
Slide 16: Current Market Environment
Current Market Environment U.S. Economy U.S. Office Property Market ▪ U.S. real GDP grew 2.9% year- ▪ High quality Class A and trophy offices continued to see positive on-year (YoY) in the 4Q 2022 absorption in 4Q 2022 in a heavily bifurcated US office market, and 2.1% YoY for the full year defying
Slide 17: US Office Trends: Return-to-Office
US Office Trends: Return-to-Office Physical Occupancy Continues Only 12.7% of All Full-Time Wage and salary employees with one main to Climb As Employees Across 1 Employees Fully WFH 2 job worked from home an average of 23.5% of all their working days. Country Return to Office 59.1% Period: October
Slide 18: US Office Trends: Amenitisation & Events
US Office Trends: Amenitisation & Events Keeping Properties Well-amenitised, Tenants Well-engaged As Employees Return-To-Office Examples of PRIME’s initiatives Tenant Lounges Community & Tenant Engagements ✓ Enhancements to meeting spaces, Holiday Breakfast Coffee & lobby areas and training faciliti
Slide 19: Key Management Priorities
Key Management Priorities Leasing ESG Commitment • Leasing the key priority • Portfolio- wide initiatives: Gridium Energy Management, Energy Star/LEED recertifications • Execution of asset enhancement and benchmarking, UL Air Quality Verification initiatives • Property specific initiatives: Fitness
Slide 20: Thank You
Thank You info@primeusreit.com +65 6951 8090 www.primeusreit.com 1 Raffles Place #40-01 One Raffles Place Singapore 048616 20
Slide 21: High Quality Portfolio of Prime Office Properties Diversified Across 13 Key U.S. Office Markets
Appendix High Quality Portfolio of Prime Office Properties Diversified Across 13 Key U.S. Office Markets Information as at 31 December 2022 14 US$1.54b Prime U.S. Office Valuation1 Properties 100% 100% One Town Centre, Boca Raton, Florida Freehold Class A Land Title Office Properties 2019 ▪ Jul 2019
Slide 22: Prime US REIT is a constituent of index list
Prime US REIT is a constituent of: FTSE ST REITs Index FTSE EPRA Nareit Developed Index FTSE ASEAN All-Share Index iEdge S-REIT Index iEdge SG Real Estate Index iEdge SG ESG Transparency Index iEdge-OCBC Singapore Low Carbon Select 50 Capped Index Singapore Small Cap Index 22