Physical Occupancy Of Manulife US REIT Falls To 32%

USA – The physical building occupancy of Manulife US Real Estate Investment Trust (REIT) has declined from 34 percent in April to 32 percent in May 2022, according to its latest business update that was recently published on the Singapore Exchange (SGX).

According to the manager of Singapore-listed Manulife US REIT, there are several headwinds being faced by the trust. For instance, executives in the United States are unclear regarding their office space requirements due to global uncertainties and employees’ slow return-to-office (RTO).

Another is that the Greenstreet report published on 10 March 2022 forecasted that hybrid work arrangement would mean that an additional 10 percent of workers (about 22 percent in total) would work from home (WFH) as compared to the pre-COVID level of just 12 percent.

Still, Manulife US REIT’s latest physical building occupancy is better than the 29 percent recorded in Q4 2021 and the 25.3 percent seen during the first quarter of the preceding year.

Aside from that, the trust’s office leasing volume during the first quarter of the year was 13.8 percent better compared to that in Q4 2021.

Another positive sign is that Jones Lang LaSalle’s (JLL) US Recovery Indicators published on 7 April 2022 disclosed that employment in most office-using industries are above pre-COVID levels in the US, led by professional services (up 5.2 percent), information (up 0.7 percent) and financial activities (up 0.3 percent).

However, The Business Times reported on Tuesday (10 May) that analysts from RHB and Maybank Securities reduced their target prices of Manulife US REIT because its portfolio occupancy fell in Q1 2022, even though rental reversions increased.

As of 31 March 2022, the trust’s portfolio occupancy slid to 91.7 percent from 92.3 percent in Q4 2021. Nonetheless, the latest figure is still above the 83 percent average occupancy for Grade A office buildings in the United States.