Manulife US Reit beats DPU forecast for quarter

Manulife US Reit's Class-A Peachtree building in Atlanta in the United States. The property is one of its three prime, freehold and Class A or Trophy quality office properties in its initial Reit portfolio.
Manulife US Reit's Class-A Peachtree building in Atlanta in the United States. The property is one of its three prime, freehold and Class A or Trophy quality office properties in its initial Reit portfolio.PHOTO: MANULIFE US REIT

Manulife US Reit yesterday announced a distribution per unit (DPU) of 1.54 US cents (2.19 Singapore cents) for the fourth quarter ended Dec 31, beating its forecast of 1.49 US cents by 3.6 per cent.

Its DPU of 3.55 US cents for the period from the date of its listing on May 20 to Dec 31 also exceeded its projection of 3.39 US cents by 4.7 per cent. This DPU will be paid out on March 30.

The trust manager said the Reit's performance from its listing to Dec 31 was due to higher property performance, and lower borrowing costs and trust expenses.

Net property income for the period was 1 per cent higher than forecast at US$30 million, mainly due to higher rental and other income, and lower property expenses. For the fourth quarter, net property income was up 0.2 per cent at US$12.4 million, while gross revenue fell by 2.1 per cent to US$19.3 million compared to forecast numbers.

The first pure-play US office Reit listed in Asia has benefitted from favourable market conditions in the three markets that it has invested in, with minimal new supply and rising market rents.

  • AT A GLANCE

  • NET PROPERTY INCOME: US$12.4 million (+0.2%)

    GROSS REVENUE:

    US$19.3 million (-2.1%)

    DISTRIBUTION PER UNIT:

    1.54 US cents (+3.6%)

Ms Jill Smith, chief executive officer of the Reit manager, said: "Moving forward, the US commercial market is poised to benefit from the growth of the US economy."

The Reit's initial portfolio comprises three prime, freehold and Class A or Trophy quality office properties in Los Angeles; Irvine, Orange County; and Atlanta. The IPO portfolio, valued at US$833.9 million, has an aggregate net lettable area of 1.8 million square feet.

As at Dec 31, the portfolio value increased by 2.5 per cent over the previous valuation as at Sept 30.

For the full year, the Reit's portfolio value increased by US$56.3 million or 7.2 per cent over the acquisition cost.

Based on committed leases, the Reit's property portfolio occupancy remained strong at 97 per cent.

Manulife US Reit has a weighted average lease expiry of 5.8 years with 67.8 per cent of the leases expiring in 2022 and beyond.

In addition, the Reit registered positive rental reversions of 10.5 per cent on some 130,000 sq ft of leases last year.

Manulife US Reit units yesterday ended unchanged at 86 US cents.

A version of this article appeared in the print edition of The Straits Times on February 14, 2017, with the headline 'Manulife US Reit beats DPU forecast for quarter'. Print Edition | Subscribe