+ Strong positive rental reversions of 20.2% for 4Q22, continuing the trend of positive rental reversions for 11 consecutive quarters. Occupancy remained relatively stable, declining 0.5% QoQ to 89.1%. Leasing remains active, with activity coming from sectors such as scientific R&D services, finance, biotechnology, manufacturing and legal services. The 20.2% reversion was substantially from Crosspoint, where an existing tenant downsized from 84k sq ft to 57.5k sq ft and extended the lease to 2032, and a new tenant backfilled space and signed a lease till 2034 at >25% reversions.
+ 82% of debt is on fixed rate or hedged, with 66% of the total debt hedged or fixed through to mid-2026 and beyond. Prime has no refinancing obligations till July 2024. Prime’s gearing increased to 42.1% from 38.7% QoQ, mainly due to the decline in portfolio valuation, but remains well within regulatory limits. Its interest coverage ratio of 4.1x is also well above MAS’ threshold of 2.5x to bring gearing limits up to 50%. Prime’s effective interest rate crept up to 3.4%, from 3.1% in 3Q22.
– Portfolio value declined 6.7% due to higher discount and cap rate assumptions used by valuers. Across the board, cap rates increased by 50bps. All assets saw a valuation decline, with Reston Square (-14.2%, due to the non-renewal of anchor tenant), Village Center Station I (-12.1%) and One Town Center (-10.6%) having the biggest percentage declines.