U.S. Office Focused SREITs - KORE vs MUST vs PRIME

It has been a long time since I do a comparison for the same REIT sector. Today, let's try to do a quick comparison for U.S. Office SREITs. For mobile user, please view in landscape mode.

Name	Keppel Pacific Oak REIT, KORE	Manulife US REIT, MUST	Prime US REIT, PRIME
Basic & Key Statistics
Listed Date	9-Nov-2017	20-May-2016	19-Jul-2019
Dividend Frequency	Semi-Annual
Unit Price	USD 0.720	USD 0.765	USD 0.795
Dividend Yield	8.49%	7.80%	8.81%
Price / NAV	0.90	1.00	0.91
Market Cap	USD 0.68 Billion	USD 1.2 Billion	USD 0.84 Billion
Related Parties Shareholding
REIT Sponsor	7.37%	8.57%	1.96%
REIT Manager	0.86%	0.25%	0.47%
Directors of REIT Manager	0.87%	0.12%	2.50%
Lease Profile
Committed Occupancy	94.3%	96.2%	93.0%
Weighted Average Lease Expiry, WALE	4.1 years	5.7 years	4.8 years
Highest Lease Expiry in 5 Years	17.2%	17.1%	18.6%
Number of Properties	13 units	9 units	12 units
Weighted Average Land Lease Expiry	All Freehold Properties
Debt Profile
Gearing Ratio	37.4%	39.1%	33.0%
Interest Cover Ratio	4.4 times	3.8 times	5.4 times
Cost of Debt	3.3%	3.3%	2.6%
Fixed Rate Debt Proportion	84.3%	92.7%	90.0%
Unsecured Debt Proportion	100.0%	0.0%	0.0%
Weighted Average Debt Maturity, WADE	2.5 years	2.3 year	4.6 years
Highest Debt Maturity in 5 Years	28.9%	26.8%	33.0%
Diversification Profile
Top Geographical Contribution	42.4%	34.6%	15.6%
Top Property Contribution	18.7%	18.0%	14.0%
Top Tenant Contribution	3.6%	6.2%	8.5%
Top 10 Tenants Contribution	19.9%	35.8%	43.0%
Key Financial Metrics
Property Yield	6.6%	6.0%	7.1%
Management Fees over Distribution	10.0%	11.5%	10.2%
Distribution on Capital	4.6%	4.5%	5.2%
Distribution Margin	40.9%	47.3%	49.2%
Growth Trend (Since IPO)
DPU	Slight Uptrend	Flat	Flat
NAV per Unit	Slight Downtrend	Slight Downtrend	Flat
Interest Cover Ratio	Downtrend	Downtrend	Flat
Property Yield	Flat	Flat	Slight Downtrend
Distribution Margin	Flat	Slight Downtrend	Slight Uptrend

* Above information is extracted from SREITs Dashboard.

** Growth Trend for DPU is not adjusted for any equity fundraising.

Let's not assign any weightage and only focus on the number of green highlighted items. Below is the summary for REIT with better position by categories:

1) Related Parties Shareholding - Tie

2) Lease Profile - MUST 

3) Debt Profile - PRIME

4) Diversification - PRIME & KORE

5) Key Financial Metrics - PRIME

6) Growth Trend - PRIME

7) Overall - PRIME, followed by KORE

How about relative valuation?

Name	Keppel Pacific Oak REIT KORE	Manulife US REIT MUST	Prime US REIT PRIME
52 Weeks
High	USD 0.800	USD 1.080	USD 1.070
Low	USD 0.390	USD 0.545	USD 0.500
Current	USD 0.720	USD 0.765	USD 0.795
Average Yield
High	9.91%	8.54%	8.53%
Low	6.91%	5.74%	7.27%
Average	8.12%	7.15%	7.81%
Current	8.49%	7.80%	8.81%
Average Price/NAV
High	1.00	1.19	1.09
Low	0.76	0.87	0.83
Average	0.90	1.03	1.00
Current	0.90	1.00	0.91

PRIME seems more undervalued in terms of relative valuation.

Above is just a quick comparison for the 3 U.S. office focused SREITs, you could refer more detail on the individual analysis below:

- Keppel Pacific Oak US REIT (Previously Keppel-KBS US REIT) Analysis @ 2 August 2020

- Manulife US REIT Analysis @ 4 August 2020

- Prime US REIT Analysis @ 8 August 2020

For more information, you could refer:

SREITs Dashboard - Detailed information on individual Singapore REIT as well as summary

SREITs Data - Overview of Singapore REIT

REIT Analysis - List of previous REIT analysis posts

REIT Investing Community - Facebook Group where members share and discuss REIT topic

*Disclaimer: Materials in this blog are based on my research and opinion which I don't guarantee the accuracy, completeness, and reliability. It should not be taken as financial advice or statement of fact. I shall not be held liable for errors, omissions as well as loss or damage as a result of the use of the material in this blog. Under no circumstances does the information presented on this blog represent a buy, sell, or hold recommendation on any security, please always do your own due diligence before any decision is made.