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Manulife US REIT IPO

Slow death . No DPU for unit holders but got fees for manager and trustee manager only

Manulife US Reit gets nod to extend asset disposal deadline to Dec 31

It can dispose up to four non-core assets to third-party buyers in order to raise minimum net sales proceeds of US$328.7 million

[SINGAPORE] The manager of United States office real estate investment trust (Reit) Manulife US Rei : BTOU +1.64%t (MUST) on Friday (May 23) announced it has received approval from lenders to extend the deadline for the disposal of assets by six months to Dec 31.

The Reit will use US$25 million in cash, in addition to proceeds from the sale of Class A office building Peachtree in Atlanta, US, to partially pare down debts due in 2026, 2027 and 2028.

The extension will give MUST more time to meet obligations under the Master Restructuring Agreement.

Under this agreement, MUST can dispose up to four Tranche 1 and/or Tranche 2 assets, which are considered non-core assets, to third-party buyers, in order to raise minimum net sales proceeds of US$328.7 million by Jun 30.

These assets refer to the Reit&rsquo s existing properties, which were classified into different tranches.

The manager plans to procure the sale of certain Tranche 1 and Tranche 2 assets, which carry high-to-medium occupancy risks, capital expenditure requirements and low-to-medium return potential.

Tranche 1 assets included the Reit&rsquo s Centerpointe, Diablo, Figueroa and Penn properties, while Tranche 2 assets included its Capitol, Exchange, Peachtree and Plaza properties.

The Reit previously sold two Tranche 2 assets, Capitol and Plaza. In a bourse filing, its manager said it has received approval from lenders to amend the agreement to allow for the disposal of up to three Tranche 2 assets, as well as to divest Peachtree, another Tranche 2 asset.

&ldquo Based on the cumulative proceeds from the sales of Capitol, Plaza and Peachtree, MUST will have achieved 82 per cent of the net proceeds target, or US$60 million short of the net proceeds target,&rdquo said the Reit manager.

The extension also allows MUST time to maximise opportunities to sell Tranche 1 assets and engage with stakeholders and potential buyers in current market conditions.

This extension is conditional on the completion of the sale of Peachtree. The sale is expected to be completed by June this year.

Assuming that the Peachtree divestment was completed as at Mar 31 this year, and the estimated net sales proceeds and additional US$25 million of cash are used to repay existing loans, MUST&rsquo s pro forma aggregate leverage is expected to improve to 56.3 per cent from 59.4 per cent, said its manager.

The pro forma weighted average interest cost is expected to reduce to 3.9 per cent from 4.4 per cent, and the pro forma weighted average debt maturity will also be extended to 3.1 years from 2.7 years.

Manulife US Reit portfolio occupancy falls to 69.9% for Q1

Drop largely due to the expiry of leases at its Diablo property in the submarket of Tempe, Arizona

[SINGAPORE] Manulife US Real Estate Investment Trust (MUST) posted a portfolio occupancy of 69.9 per cent on Thursday (May 15) for its first quarter ended March, down from 73.9 per cent in the previous quarter.

The pure-play US office Reit manager explained that this was largely due to the expiry of leases at its Diablo property in the submarket of Tempe, Arizona.

Notable leases executed over the quarter included the Phipps&rsquo and Centerpointe&rsquo s new leases of 27,000 square feet (sq ft) and 29,000 sq ft, respectively.

The Reit posted a negative rental reversion of 8.9 per cent for Q1, a further drop from negative 5.1 per cent in the previous quarter,

According to the manager, more than 1 million sq ft of leasing pipeline continues to be generated due to &ldquo proactive marketing&rdquo .

Gearing stood at 59.4 per cent for the quarter, falling from 60.8 per cent in the previous quarter, with an interest coverage ratio of 1.7 times.

Additionally, the Reit&rsquo s portfolio weighted average lease expiry (Wale) by net lettable area was 4.8 years as at end-March, up from five years in Q4 2024. For leases signed in Q1, Wale stood at 4.2 years.

Of its loans, 73.3 per cent remain hedged as at Mar 31. The manager of MUST said that it targets to maintain optimal hedge ratio of 50 to 80 per cent, as it repays debt from proceeds from expected sale of assets in line with its recapitalisation plan.

Looking ahead, MUST will focus on strategic deals that maximise liquidity and optimise capital to prioritise debt repayment, which will be about US$290 million since November 2024.

The sale of Peachtree &ndash a 28-storey Class A office building in Atlanta, Georgia &ndash for about US$133.8 million, was announced on May 11. It will repay around 78 per cent of its 2026 debts, said the manager of the Reit.

Along with its previous divestments of Capitol and Plaza, MUST would achieve about 82 per cent of its net proceeds targets under the Master Restructuring Agreement.

start from scratch again lor.. bo bian.. they also issue shares to buy these properties

eddyeddy ( Date: 13-May-2025 12:17) Posted:

Keep selling properties with deep losses , how to recover ? The mgm , trustee make all the fees , nothing for unit holders . Less property , less income , how to recover ?

Joelton ( Date: 12-May-2025 14:35) Posted:

Manulife US Reit divesting Atlanta property for US$133.8 million to repay loans due 2026

The group expects to get US$118.8 million as net proceeds from the transaction, excluding the seller&rsquo s credit and transaction costs

[SINGAPORE] The manager of Manulife US real estate investment trust (Reit) announced on Sunday (May 11) that it has agreed to sell Peachtree, a 28-storey Class A office building in Atlanta, Georgia for US$133.8 million.

The purchaser is an unrelated third party, and the purchase-and-sale agreement is subject to approval by the lenders of Manulife US Reit, among other conditions.

Manulife US Reit expects to get US$118.8 million as net proceeds from the transaction, excluding the seller&rsquo s credit and transaction costs.

This will result in an estimated net loss of US$52.5 million from the Peachtree divestment for FY2025. Net proceeds will be fully used to repay debt.

The rationale to divest Peachtree is to make early partial repayment of Manulife US Reit loans due in 2026. The proceeds will enable the Reit to pay down about 58 per cent of the US$203.9 million of loans maturing in 2026.

Including the US$40 million repayment in March 2025 from the Plaza divestment, Manulife US Reit will pay off about 78 per cent of the loans due in 2026, with about US$45.1 million remaining.

Coupled with its previous divestment of Capitol and cash contribution from the balance sheet, total debt repayment will be close to US$290 million since Nov 2024.

The sale of Peachtree improves financial ratios, with Manulife US Reit&rsquo s pro forma aggregate leverage expected to improve to 57.7 per cent from 60.8 per cent and pro forma weighted average interest cost is expected to reduce to 4.07 per cent from 4.53 per cent.

Under the master restructuring agreement signed with Manulife US Reit&rsquo s lenders, the Reit is required to achieve minimum cumulative net sales proceeds of US$328.7 million by Jun 30, 2025.

With the sale of Peachtree, Capitol and Plaza, Manulife US Reit would achieve about 82 per cent of its net proceeds targets.

The heightened economic uncertainty surrounding trade policies and ongoing challenges hampering office transactions, such as remote and hybrid work arrangements and a lack of financing, has created a challenging environment for commercial real estate.

&ldquo We remain in active discussions on the divestment of additional properties. In view of current headwinds, we believe that disposing Peachtree would enable us to mitigate risks and achieve the best possible outcome for Unitholders,&rdquo said John Casasante, CEO and chief investment officer of the manager.

The manager plans to reposition the portfolio for growth through diversification by pursuing opportunities in other real estate sectors and permissible alternative real estate investments that have attractive and accretive cash yield and are less capital-intensive.

The Reit will also tap its sponsor&rsquo s global real estate platform and in-house capabilities to capitalise on opportunities in the US real estate market.

&ldquo We remain focused on moving Manulife US Reit towards recovery as soon as possible so that we may return to a growth trajectory,&rdquo added Casasante.

They still have to sell another 60m worth of assets to comply with the restructuring deal that secured lending to tide them through. Then recently KORE ' s AGM shed light that lenders are still not providing secured loan to finance office assets deals. Thus explained why MUST can only sell to bargin hunters that don' t really need to borrow.