US Office S-REITs - DBS Research 2023-03-28: Shaken, Not Stirred

• Manulife US REIT's share price fell 14% to today’s (27 Mar) close of US$0.22. On the other hand, Prime US REIT's share Price and Keppel Pacific Oak US REIT's share Price declined to a lesser degree, by ~9% and ~4%, respectively.
• - Read this at SGinvestors.io -

Discussions on proposed transaction between Mirae and Manulife US REIT are still ongoing, contrary to rumours.

• - Read this at SGinvestors.io -
• However, we understand that the discussions are still ongoing and, according to the latest announcement by Manulife US REIT (dated 17 Mar 2023), the proposal from Mirae is non-binding, and due diligence is ongoing.
• The proposal from Mirae is in relation to a subscription of new units in Manulife US REIT and does not include any offer to acquire any existing units. In the announcement, Manulife US REIT highlighted that the due diligence includes, the amount of new units in Manulife US REIT which Mirae and its affiliates can subscribe while taking into account the need for Manulife US REIT to maintain its US REIT qualification.
• While investors are impatient for a potential conclusion of the strategic review of this proposed transaction, we believe the process takes time and any subsequent disclosure of a potentially positive outcome of the review would be viewed as a positive for Manulife US REIT, should the transaction be able to help it recap its balance sheet.
• However, the devil is still in the details.

Media reported about short sellers’ bearish bets against US office on potential credit tightening.

• Read more at SGinvestors.io.

Rachel TAN DBS Group Research | Derek TAN DBS Research | https://www.dbs.com/insightsdirect/ 2023-03-28 SGinvestors.io

---