Manulife US REIT

Manulife US REIT - a US focused commercial REIT.
- 513m units offered, priced at SGD 82 cts per unit.
- Projected DPU yields of 6% in the first year and 6.3% in the second year (vs. SREIT office sector cap-weighted yield of 5.7%), on 100% payout ratios both years.
- 767m units outstanding implies an eventual market cap of SGD 628m (a bit small...).
- Three freehold assets valued at USD 705m (cap rates 5-5.5%): Washington DC – USD 130m, Downtown L.A. – USD 271m, and Airport Area, Orange County – USD 304m.
- 98.1% occupancy implies organic growth to come from 85.5% of tenants having 2-3.5% embedded rental escalations.
- Total borrowings of USD 268m imply aggregate leverage of 37.4% thus giving it some debt headroom for acquisitions.
- sponsor Manulife has a fully integrated real estate management platform: Manulife Real Estate (AUM USD 13.2b globally, of which USD 6.6b is in the US, of which 81.8% are office assets) has executed USD 5b worth of deals in the past 5 years.
- Weighted average debt maturity of 10.5 years with first refinancing of USD 51m in 2022.
- Low tenant expiry profile for first two years: 6%/6.1%/18.1%.