Prime US Reit raises distributable income payout ratio to at least 50%; records lower Q3 income

A distribution of only 10% of the distributable income has been declared for the last two one-year periods since Jul 1, 2023, the manager notes

The manager of Prime US Reit on Tuesday (Nov 11) posted a distributable income of US$6.3 million in Q3, down 25.9 per cent from US$8.5 million in the previous corresponding period.

This comes amid a change to its distributable income payout policy, as the real estate investment trust (Reit) raises its distributable income payout ratio to at least 50 per cent from H2 2025 onwards, from 10 per cent previously.

The manager noted that a distribution of only 10 per cent of the distributable income was declared for the last two one-year periods since Jul 1, 2023. This was due to portfolio reinvestments being prioritised to activate newly signed leases and to protect long-term value.

“With the commencement of some of these leases and the high degree of visibility on future contractual cash flows, the manager believes it is reasonable to begin normalising Prime’s distribution policy,” the managed said in the Reit’s third-quarter business update.

The Reit’s property cash income is expected to grow further as the rent payment of a majority of the newly signed leases commence throughout 2026, the manager said.

As cash flows from new leases ramp up, increasing the distributable income payout ratio from 10 per cent to 50 per cent, while retaining 50 per cent of the current distributable income, can help ensure coverage for ongoing capital and operational needs, it added.

Revenue for the quarter fell 2.7 per cent to US$33 million, from US$33.9 million in Q3 2024.

For the three months, net property income slid 6.1 per cent to US$16.8 million from US$17.9 million.

The Reit’s net asset value per unit stood at US$0.52, with its aggregate leverage at 44.9 per cent.

On a quarter on quarter basis, portfolio occupancy stood at 80.7 per cent as at Sep 30, 2025, up from 80.2 per cent as at June.

Rental reversion came in at positive 14.5 per cent, versus positive 4.3 per cent for Q2 2025.

The manager noted that the Reit has engaged in multiple leasing negotiations across several of its assets as return-to-office momentum in the US gains traction and demand for office space strengthens.

Notably, the Reit secured around 92,000 square feet (sq ft) of leases in Q3 2025, compared with a leasing volume of 268,000 sq ft for Q2 2025.

The Reit also extended its portfolio’s weighted average lease expiry to 4.9 years from 4.7 years in the prior quarter.

Units of Prime US Reit ended Tuesday flat at US$0.20, before the news.

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