Manulife US REIT - RHB Invest 2024-08-06: Focusing On Right Dispositions & Deleveraging

• Manulife US REIT (SGX:BTOU)’s operational performance for 1H24 was in line, with a glimmer of a sign that market conditions are stabilising. US office leasing volumes are starting to point to a pick-up, with some normalisation in return-to-office trends.

Disposition plan on track, with 3 assets on the market.

• - Read this at SGinvestors.io -
• A key consideration for disposition will be the need for incremental capital to be spent on the asset vs potential returns. Manulife US REIT is willing to selling assets at a discounted price if necessary.
• - Read this at SGinvestors.io -

Portfolio occupancy rate remained stable

• Manulife US REIT's portfolio occupancy rate remained stable q-o-q at 78.4% (1Q24: 78.7%). About 76% of the ~428k sqf in leases signed in 1H24 came from renewals with Amazon – Manulife US REIT’s fifth largest tenant (3.4% of income) – extending its lease by 3+ years. Demand came from the tech, retail, finance and healthcare sectors.
• Rent reversion for the leases was at -10.6% - we believe this was dragged down by the Amazon lease extension.
• Manulife US REIT’s leasing pipeline remains healthy, at 1.4m sqf (~80% of this are at the proposals stage). Management expects the easing of the labour market to result in a higher return-to-office rate, which should boost its leasing momentum.

Same store revenue growth down 8.1%

• Read more at SGinvestors.io.

Vijay Natarajan RHB Securities Research | https://www.rhbgroup.com/ 2024-08-06 SGinvestors.io

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