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2441-2460 of 3029
$0.17 !
Would be nice to see it going above $0.16 and re-establish a support base from there
SmallSmall ( Date: 23-May-2023 13:07) Posted:
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Strong technical rebound. Up $0.017.
More to come for this bombed out REIT
More to come for this bombed out REIT
The sponsor should just take it private to save the embarrassment and reputation drag. Realistically, it is only a very % of their AUM
Workers will be returning to work as employers realise that WFH is not a feasible option. Office rental is just a small part of the cost.
DBS nearly halves Manulife US Reit&rsquo s target to US$0.24, maintains &lsquo buy&rsquo
DBS Group Research has lowered its target price for Manulife US Real Estate Investment Trust (Reit) : BTOU -2.1% by 46.7 per cent to US$0.24 from US$0.45, but maintained &ldquo buy&rdquo on the counter.
The new target price represents a potential upside of 70.2 per cent from Manulife US Reit&rsquo s trading price of S$0.141 as at 11.45 am on Friday (May 19). At the time, the counter was down 1.4 per cent or US$0.002.
The analysts said a capital injection could help ease some of the Reit&rsquo s gearing woes. Its aggregate leverage, as of its Q1 2023 operational updates released on May 11, stands at 49.5 per cent, just shy of the Monetary Authority of Singapore&rsquo s leverage limit of 50 per cent.
On Apr 12, Manulife US Reit said it is still in talks with Mirae Asset Global Investments over a possible capital injection via a subscription in new units. Around a month later, the manager said it &ldquo substantially completed&rdquo due diligence processes on the potential deal.
Although dilutive to existing unitholders, this scenario has been &ldquo substantially priced in&rdquo at the Reit&rsquo s current trading price, DBS noted. Assuming the capital raised is at a 10 per cent discount to current prices, the bank estimated that the Reit would still offer a fully diluted yield of around 19 per cent for FY2023, which is still &ldquo way above&rdquo its historical mean.
To bring gearing closer to a 40 per cent level, US$175 million in overall capital injection would be needed, said DBS. This will allow the Reit to protect itself against possible declines in asset valuations in the future.
On May 11, the Reit&rsquo s manager announced a decline in portfolio occupancy to 86.1 per cent for the first quarter ended Mar 31, after a top tenant downsized its headquarters at the Reit&rsquo s Phipps building in Atlanta by 69,000 square feet (sq ft) to 209,000 sq ft.
DBS cut its distribution per unit forecasts from FY2023 to FY2024 by 9 per cent to 21 per cent. This would factor in higher vacancy and costs, and increasing interest costs. This estimate has yet to factor in any potential capital injections.
DBS said Manulife US Reit&rsquo s portfolio, which includes Class A office buildings in key cities in the US, is poised to ride on the &ldquo flight to quality&rdquo trend in the US office market. This comes as American corporates rationalise their office space post Covid-19, given the rise of flexible work arrangements.
Manulife US REIT ' navigating challenges' , CGS-CIMB keeps TP at 55 US cents as unit price hits all-time low
In a bid to bring down gearing, MUST divested its Tanasbourne property in Oregon in April for a consideration of US$33.5 million.
Manulife US REIT (MUST) BTOU -2.11% is continuing to navigate challenges in 1QFY2023 ended March, say CGS-CIMB Research analysts Lock Mun Yee and Natalie Ong, amid high gearing and an ongoing strategic review.
MUST reported lower q-o-q portfolio occupancy of 86.1%, from 88% at end-FY2022, due to children&rsquo s apparel company Carter&rsquo s renewal and downsize of 69,000 sq ft of space at its Phipps property.
Physical occupancy at MUST&rsquo s buildings averaged some 30% as at end-1QFY2023. Portfolio weighted average lease expiry stood at five years as at end-1QFY2023. MUST&rsquo s gearing ticked up to 49.5% during the quarter while interest coverage ratio dipped to 2.9x. Average funding cost rose to 3.98% as at 1QFY2023.
A spokesperson for the Manager says the Manager stress-tests the portfolio to see how changes in income (as contributed by occupancy and rents) and interest expenses will affect the interest coverage ratio (ICR). Based on 1Q2023&rsquo s ICR of 2.9x, Ebitda will have to drop by around 13% or interest expense increase by around 15% for ICR to dip below 2.5x.
While MUST' s gearing is above 45%, it is still below the regulatory ceiling of 50%. REITs whose gearing rises above 45% need to ensure that ICRs remain at or above 2.5x. MUST has not breached its financial covenants despite its heightened aggregate leverage.
Despite MUST' s operational stresses, Lock and Ong maintain &ldquo add&rdquo on the REIT with an unchanged target price of 55 US cents (73.63 cents).
The analysts forecast distribution per unit (DPU) of 4.5 US cents for 2023, 4.3 US cents for 2024 and 4.5 US cents for 2025. &ldquo We keep our 2023-2025 DPU estimates unchanged&hellip While the high projected FY2023 dividend yield reflects that much of the operational challenges have been priced in, we believe the pending outcome of the strategic review remains a near-term overhang,&rdquo write Lock and Ong.
MUST signed 348,000 sq ft of leases in 1QFY2023, including Carter&rsquo s lease renewal and extension, a renewal at Michelson (at more than 30% rent reversion) and a new lease at Figueroa.
Carter&rsquo s, MUST&rsquo s top tenant accounting for 4.5% of 1QFY2023 gross rental income (GRI), renewed 209,000 sq ft of space at Phipps and extended its lease expiry from 2030 to 2035.
According to the lease terms, MUST will enjoy a +18% rent reversion from 2025.
MUST also indicated that there has been healthy tenant interest for 10,000 to 20,000 sq ft of the 69,000 sq ft of space given up by Carter&rsquo s.
Overall, MUST enjoyed a +5% rent reversion in 1QFY2023.
MUST has a balance of 7.6% and 10.8% of leases expiring in 9MFY2023 and FY2024 respectively. According to property consultant Jones Lang Lasalle, leasing volumes in MUST&rsquo s submarkets continue to be weak although lease terms are stable, concession packages remain elevated.
Strategic review
The REIT&rsquo s manager revealed on April 12 that discussions with its potential acquirer Mirae Asset Global Investments are still ongoing. On May 11, the manager says due diligence is &ldquo substantially completed&rdquo and the parties are currently negotiating key terms.
&ldquo MUST&rsquo s strategic review remains ongoing and management updated that due diligence by Mirae has been substantially completed and the parties are currently negotiating key terms,&rdquo note Lock.
The target completion date of the review is maintained at 2QFY2023/3QFY2023. As part of its review, sponsor Manulife is to retain its 9.1% stake in the REIT. MUST also earlier announced that Mirae will subscribe for more than 9.8% of new units, subject to unitholders&rsquo approval (in an ordinary resolution), to recapitalise MUST, reduce gearing and provide stability and growth. Access to Mirae&rsquo s US asset pipeline would also allow MUST to execute its pivot strategy.
To Lock and Ong, potential re-rating catalysts include a quicker conclusion to the strategic review and swifter recovery of the US office transactions market.
However, key downside risks include a slower-than-expected backfilling of vacated spaces that could impact near-term income visibility, and a protracted slowdown in the US economy, which could dampen appetite for office space.
This one need to raise cash via right issues or placement , 9therwise will not survive
Manulife US Reit&rsquo s occupancy falls to 86.1% as top tenant gives up a quarter of leased space
THE manager of Manulife US Reit : BTOU -4.67% announced on Thursday (May 11) that its portfolio occupancy has fallen to 86.1 per cent for the first quarter ended Mar 31, after top tenant The William Carter Company gave up close to a quarter of its space leased at the Phipps building in Atlanta.
Also known as Carter&rsquo s, the children&rsquo s apparel maker downsized its headquarters located in the building by 69,000 square feet (sq ft), the real estate investment trust (Reit) manager said.
It renewed its lease for the remaining 209,000 sq ft, extending the lease expiry to 2035, from 2030 previously.
&ldquo Carter&rsquo s had an early termination option coming up next year we engaged them early to try to secure them as a long-term tenant in the building,&rdquo Tripp Gantt, chief executive officer of the manager of Manulife US Reit, said at a briefing accompanying the release of its Q1 operational update.
&ldquo We also were able to negotiate terms that are going to get us &ndash starting in 2025 &ndash about an 18 per cent positive rental reversion on Carter&rsquo s lease,&rdquo he added.
Carter&rsquo s is Manulife US Reit&rsquo s largest tenant by both net lettable area (NLA) and gross rental income (GRI).
Before its renewal and downsizing, Carter&rsquo s accounted for 5.7 per cent of Manulife US Reit&rsquo s GRI as at Dec 31, 2022. It now accounts for 4.5 per cent of the US office Reit&rsquo s GRI as at Mar 31.
Carter&rsquo s downsizing drove the drop of 1.9 percentage points in Manulife US Reit&rsquo s portfolio occupancy from 88 per cent as at end-December.
The sizeable renewal by Carter&rsquo s also bumped up Manulife US Reit&rsquo s executed leases in Q1 to about 348,000 sq ft, with an average positive rent reversion of 5 per cent.
Breaking down the leases by net lettable area, 86.2 per cent of the total leases were renewals, while 11.8 per cent were new leases. The remaining 2.1 per cent were for expansion.
With the Reit&rsquo s portfolio having a weighted average lease expiry of five years, its manager expects positive rental reversion for 2023.
Around 7.6 per cent of Manulife US Reit&rsquo s leases by gross rental income will expire this year. About half of its leases (50.2 per cent) will expire in 2028 and beyond.
As at Mar 31, the Reit&rsquo s gearing stood at 49.5 per cent. The quarter-on-quarter rise in gearing was mainly due to the payment of H2 2022 distributions in March 2023, said the manager.
The manager cited leasing challenges and the increasing cost of trust-level debt as some of the headwinds the Reit faces.
&ldquo I think the banking turmoil in the first quarter created more questions and more instability, and most people are thinking that it probably increases the chances of a recession here, maybe in the third or fourth quarter in the US,&rdquo Gantt said.
&ldquo What all this means for us is a few things. First, in terms of our leasing, our tenants were already going through a period where they&rsquo re trying to figure out their space needs,&rdquo he added. &ldquo The economic challenges that our tenants may be facing now complicates that even more, and perhaps, plays into their leasing decisions.&rdquo
Amid the challenges, the Reit manager disclosed on Thursday that it has &ldquo substantially completed&rdquo due diligence processes on its potential deal with Mirae Asset Global Investments.
As part of a strategic review, Manulife US Reit previously indicated that it was in talks with Mirae for the proposed sale of its manager.
The manager noted that it is currently negotiating key terms and targets the transaction to be completed around Q2 or Q3. It added that current sponsor Manulife will retain its 9.1 per cent stake.
&ldquo In the past, we&rsquo ve talked about wanting to pivot strategically into an asset class that has more secular tailwinds in growth markets, growth tenants, and really focusing on properties that have lower capex needs going forward. We&rsquo ve talked about the potential of logistics and industrial property in the US&hellip And those are the kinds of properties that Mirae has in their portfolio currently,&rdquo Gantt said.
&ldquo The transaction itself, and the money that we would raise from it, is step one it&rsquo s not a silver bullet to solve all the issues of the Reit,&rdquo he added. &ldquo Executing that pivot over time is something that we&rsquo re looking to do. But we obviously need the space &ndash the financial space &ndash and the strength and balance sheet in order to give us the time to execute that.&rdquo
If they survive, and they issue a rights issue at current prices, its not a bad thing for minorities.
Kandee ( Date: 11-May-2023 10:04) Posted:
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another possible conversion of space is as storage space. quite profitable.
like extraspace.
another spcial type of storage is as columbarium.
can also subcontract out to some religious group on long lease. they will perform ceremony to value add.
1-2 floor as columbarium can recover the entire buidling cost. the rest collect free rent.
during qing ming it will give a boost to the retail business. especially those selling flower.
like extraspace.
another spcial type of storage is as columbarium.
can also subcontract out to some religious group on long lease. they will perform ceremony to value add.
1-2 floor as columbarium can recover the entire buidling cost. the rest collect free rent.
during qing ming it will give a boost to the retail business. especially those selling flower.
My gut feeling is yes. Debt leverage ratio of 49.5% is precarious. The white knight, Mirae Asset management, if they do buy a stake will only be completed in Q2 or Q3. Thus in the interim, they will need to issue a rights issue.
Fesa261 ( Date: 10-May-2023 20:29) Posted:
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MANULIFE US Reit : BTOU -1.33% posted an occupancy of 86.1 per cent for the first quarter ended Mar 31. The occupancy includes leases signed up till Apr 18.
Hi all, is there any rights issue coming? What are the possible corporate actions coming?
office and retail spaces changes happen all the time.
liek bank reducing space first heard of last year in uk. then singapore also happen. we start to see bank branches got reduce to atm brunch. in the end bank will still have a mix of online and bricks units.
increased business activities will also bring new demand for office spaces. example lta now call for operator of jurong regional line and cross island line. if these are granted to 2 new operators surely they will need to setup new office, support staff etc. these will be new demand for office space in time.
as long as commercial activities increased. demand for office and retail space will increased.
liek bank reducing space first heard of last year in uk. then singapore also happen. we start to see bank branches got reduce to atm brunch. in the end bank will still have a mix of online and bricks units.
increased business activities will also bring new demand for office spaces. example lta now call for operator of jurong regional line and cross island line. if these are granted to 2 new operators surely they will need to setup new office, support staff etc. these will be new demand for office space in time.
as long as commercial activities increased. demand for office and retail space will increased.
us base office reits is facing the wave of half empty office spaces. as wrok from home will take some time to return to norm. my beleive it will return to norm as in the past when video confereincing came on, people said it will reduce air travel to location not needed. true is people to people meet cannot be replace by video conferencing. so these work from home is heaven for salary worker but as things progress guess more likely to return to norm.
meanwhile. us office owners will face devaluations of their asset as half empty office will face reduce a price war in time. office is possible to convert to apartments or other uses but some with not enough windows and sanitary pipe will need more money to convert.
big cities will be less hit then off locations one.
meanwhile. us office owners will face devaluations of their asset as half empty office will face reduce a price war in time. office is possible to convert to apartments or other uses but some with not enough windows and sanitary pipe will need more money to convert.
big cities will be less hit then off locations one.
Ok, superstartup!
I will look into the 2 Reits and will buy some to keep.
Thank you very much.
I will look into the 2 Reits and will buy some to keep.
Thank you very much.
superstartup ( Date: 10-May-2023 15:41) Posted:
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If you looking at US Office Reits, maybe go for lesser risk ones compared to Manulife
The other 2 US Office Reits, KepPacOak and Prime
The other 2 US Office Reits, KepPacOak and Prime
b888sg ( Date: 10-May-2023 13:21) Posted:
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Hello Kelvinn!
Thank you very much.
Thank you very much.
kelvinn ( Date: 10-May-2023 15:05) Posted:
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market is pricing tomorrow earnings is bad.
b888sg ( Date: 10-May-2023 13:21) Posted:
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