DBS estimates that along with previous divestments, MUST is on track to repay a total of US$290 million since last November, bringing its total debt repayment to around 78% of total debts due in 2026 and 82% of the target required by the REIT to achieve by this coming June.
DBS notes that Peachtree is considered one of the stronger assets within the REIT’s portfolio and the selling price will be at a discount of 19% off its most recent valuation of US$164 million.
The selling price represents an estimated exit cap rate of around 9.1% and a unit price of US$238 psf, which will place it in the historical transaction ranges in the past two years.
Upon completion of the sale, MUST's financial metrics will improve with closely watched gearing will improve to 57.7%, down from 60.8%.
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MUST units were trading at around 6 US cents, equivalent to 0.2x P/B and thus offering a "trading opportunity".
However, "a clearer path towards recovery will be needed and reinstatement of distributions will support a longer term revival in share price," says DBS.
