This brings its full-year DPU to 0.61 UScts, more than doubling from 0.29 UScts in FY2024.
Besides the higher payout ratio, the REIT enjoyed better leasing visibility and committed occupancy, which rose to 82.7% as at 4QFY2025.
Tan, in his Feb 12 note, says he is "pleasantly surprised" by the manager’s confidence to push payout ratios to 65%, ahead of his 50% assumption.
"This is a positive signal that the manager is seeing a turnaround in cashflow performance for the portfolio on the back of robust leasing completed in FY2025, which will start to contribute meaningfully in the coming year," says Tan.
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In FY2025, the REIT secured leases for 680,000 sqft of space, equivalent to 16% of its total NLA.
Tan suggests that the REIT's capex needs will "dial down" after the manager invested significantly in the past few years to future proof the portfolio's asset offerings.
With the higher payout ratio of 65%, Tan may raise his DPU estimates by 30%, which implies a yield of between 5.4-6.4% for the current FY2026 and coming FY2027.
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At current levels, the units are trading at an attractive 0.4x P/B, says Tan.
Prime US REIT units dropped 4.35% to trade at 22 US cents as of noon.
