SINGAPORE (Feb 11): Manulife US Real Estate Investment Trust (Manulife US REIT) has announced a 7.7% increase in distribution per unit (DPU) to 1.53 US cents (2.07 cents) for the 4Q18 ended December, compared to 1.42 US cents a year ago.
The rise in 4Q DPU was largely due to income contribution from the properties acquired in 2018 – Penn in Washington DC and Phipps in Atlanta – and full quarter income contribution from Exchange in New Jersey, which was acquired on Oct 31, 2017.
This bring full-year DPU to 5.57 US cents for FY18, 3.5% lower than DPU of 5.77 US cents a year ago.
The decline was largely due to an enlarged unit base from the issuance of a Preferential Offering to partially fund the Penn and Phipps acquisitions.
On an adjusted basis, FY18 DPU would have been 3.6% higher at 6.05 US cents, compared to 5.84 US cents in FY17.
Manulife US REIT saw its gross revenue grow 38.4% to US40.5 million in 4Q18, from US$29.3 million a year ago.
Net property income (NPI) grew 38.4% to US$25.5 million while distributable income increased 33.8% to US$19.6 million. These were largely due to contributions from the four high-quality office properties acquired in 2017 and 2018.
The portfolio has a high occupancy rate of 96.7% and long weighted average lease expiry (WALE) by net lettable area (NLA) of 5.8 years as at Dec 31, 2018.
As at end December, cash and cash equivalents stood at US$54.1 million.
“The US Tax Act debacle has largely been resolved with the issuance of the tax clarification issued on 20 December 2018,” says Jill Smith, chief executive officer of the manager.
She notes that units in Manulife US REIT have climbed 22.3% to 85 US cents as at Feb 8, 2018, from a low of 69.5 US cents in 4Q18, and is currently trading at about 1.02x book value with total shareholder return of 10.4% from the start of the year.
“We continue to distinguish ourselves through our high-quality portfolio of Trophy and Class A assets, which will provide strong income in upcycles and remain resilient during down cycles,” Smith adds. “Moving into 2019, we will drive leasing and seek acquisitions opportunistically in strong growth markets.”
Units in Manulife US REIT closed half a cent lower at 85 US cents on Friday.
