Manulife US REIT’s Revenue Up 9.4% In FY2022

Office Finder Team

February 9, 2023

USA – Manulife US REIT revealed that the gross revenue of the real estate investment trust (REIT), which own office buildings in the United States, rose by 9.4 percent year-on-year to US$202.56 million in FY2022, according to Singapore Exchange (SGX) filings published on Thursday morning (9 February, SGT).

At the same time, its net property income (NPI) increased by 3.3 percent to US113.16 million, while distributable income edged up by 2.7 percent to US$87.87 million.

The revenue growth was mainly attributed to contributions from commercial properties Diablo, Park Place, and Tanasbourne that were purchased in December 2021. Other factors are higher car park income and lower rent abatements given to tenants impacted by the COVID-19 pandemic.

However, it was offset by lower rental income from existing office assets due to higher vacancies and higher real estate costs. Other offsetting factors are the absence of net reversal of provision for projected credit loss, heftier financing costs due to interest rate hikes, and Manulife US REIT’s enlarged unit base arising from the private placement in December 2021.

Nonetheless, the REIT’s office portfolio still has a healthy occupancy rate that exceeds the US national average for Grade A office properties. During the period under review, the trust also leased out 378,000 sq ft of office space. Of this, 48 percent comprised new leases, while 52 percent were renewals. In addition, the REIT recorded an office rental reversion of 0.7 percent in FY2022.

“We have reported an improvement in distributable income in FY2022, coupled with a steady portfolio occupancy of 88 percent and weighted average lease expiry (WALE) by net lettable area (NLA) of 4.7 years, in spite of the challenges in our submarkets,” commented Manulife US REIT’s CEO Tripp Gantt.

“Cognisant of our (relatively high) gearing level, we will continue exploring funding and strategic options for the REIT. Since our financial advisor Citi began discussions with potential partners from mid-January 2023 in relation to our strategic review, we have seen healthy interest from a broad range of counterparties including local and international real estate developers, REITs and private equity players. We look forward to providing more updates in due time,” he added.