Introduction

The US Office REITs market is showing signs of recovery, driven by a return to work-from-office policies and increasing tenant confidence in signing long-term leases. This report dives deep into the performance, prospects, and recommendations for various REITs, including Keppel Pacific Oak US REIT (KORE), Prime US REIT (PRIME), and other healthcare, hospitality, industrial, office, retail, and diversified REITs listed on SGX and internationally.

Keppel Pacific Oak US REIT (KORE)

Recommendation: BUY

Target Price: US\$0.32

Current Price: US\$0.205

2026 Distribution Yield: 19.0%

P/NAV: 0.29x

KORE is positioned to maintain above-industry-average portfolio occupancy despite anticipated vacates at key properties in 2025, including Westmoor Center in Denver (100,000sf) and The Plaza Buildings in Bellevue (40,000sf). Portfolio occupancy is expected to stabilize at 88-89% by the end of 2025, with rental reversions projected in the range of -5% to +5% for the year. Physical occupancy improved by 3 percentage points quarter-on-quarter to 73% in 3Q24. KORE’s valuation remains highly attractive, trading at a 71% discount to its NAV per unit of US\$0.71. The target price is derived using the Dividend Discount Model (DDM), with adjustments for a higher cost of equity at 10.5% and a terminal growth rate of 0.5%.

Prime US REIT (PRIME)

Recommendation: BUY

Target Price: US\$0.33

Current Price: US\$0.175

2026 Distribution Yield: 25.9%

P/NAV: 0.32x

PRIME has achieved significant leasing momentum, particularly at its Waterfront at Washingtonian property, where occupancy increased by 7 percentage points to 40% in 3Q24, following the completion of enhancements. The property, situated adjacent to Rio Shopping Center, offers amenities such as a tenant lounge, conference center, Grab & Go café, gym, and wellness room. Discussions for an additional 35,000sf of leases by the end of 2024 are ongoing, potentially raising occupancy to 50%. PRIME is also negotiating with a global insurance company for a 100,000sf lease. Additionally, notable leasing discussions are underway at Park Tower in Sacramento and Village Center Station 1 in Denver, with potential deals expected to boost occupancy rates significantly. The target price reflects adjustments for a higher cost of equity at 11.75% and a terminal growth rate of 0.5%.

Healthcare REITs

• First REIT (FIRT): Current price at S\$0.26 with a historical yield of 9.5%. Debt-to-equity ratio stands at 78.1%.
• PLife REIT (PREIT): Recommended as a BUY with a target price of S\$5.12. Current price is S\$3.78, offering a forward yield of 4.7%.

Hospitality REITs

• CapLand Ascott (CLAS): BUY recommendation with a target price of S\$1.38. Current price is S\$0.905, providing a forward yield of 6.8%.
• CDL Hospitality Trust (CDREIT): BUY recommendation with a target price of S\$1.50. Current price is S\$0.885, offering a forward yield of 7.5%.

Industrial REITs

• Keppel DC REIT (KDCREIT): BUY recommendation with a target price of S\$2.64. Current price is S\$2.23, offering a forward yield of 5.3%.
• Mapletree Industrial Trust (MINT): BUY recommendation with a target price of S\$3.05. Current price is S\$2.27, providing a forward yield of 6.4%.

Office REITs

• Keppel REIT (KREIT): BUY recommendation with a target price of S\$1.25. Current price is S\$0.885, offering a forward yield of 6.9%.

Retail REITs

• Frasers Centrepoint Trust (FCT): BUY recommendation with a target price of S\$2.79. Current price is S\$2.15, offering a forward yield of 5.8%.
• Lendlease REIT (LREIT): BUY recommendation with a target price of S\$0.77. Current price is S\$0.56, providing a forward yield of 6.8%.

Diversified REITs

• Mapletree Pan Asia Commercial Trust (MPACT): BUY recommendation with a target price of S\$1.71. Current price is S\$1.24, offering a forward yield of 6.8%.
• CapLand China Trust (CLCT): Current price is S\$0.74, offering a forward yield of 8.5%.

International REITs

• Elite UK REIT (ELITE): BUY recommendation with a target price of £0.38. Current price is £0.29, offering a forward yield of 10.7%.
• IREIT Global: Current price is S\$0.28, offering a forward yield of 10.1%.