PRIME US REIT has released its 3Q results. Net property income has reduced slightly and leverage ratio has remained at 43.7%. With an expected downward valuation in properties, my take is that the leverage ratio will be at 49-50% for its 4Q results ; this means the Interest Coverage ratio (ICR) is key to the attractiveness of the REIT and its survival.

Sodexo Vacancy

One negative remains - the departure of Sodexo. While rental reversions continue to be positive, the loss of Sodexo will be immediately felt at the start of 2024. Currently about 10-15% of Sodexo vacated spaces has been backfilled and more leasing momentum

With interest expenses still rising by about 10 basis points each quarter, it seems at the end of 1H 2024, PRIME will experience a fall of 5% revenue while interest expense will increase by about 6%. This will pull down its ICR to about