Manulife US REIT (MUST), on Nov 5, reported a portfolio occupancy of 94.3% and a weighted average lease expiry (WALE) of 5.5 years for the 3QFY2020 ended September.
The lower portfolio occupancy from 96.2% previously was mainly attributable to expiries that are not related to Covid-19 and a slow down in new leasing nationwide.
The REIT’s “resilient” WALE was also due minimal lease expiries in 2020 and 2021.
Expiries in 2020 and 2021 are mainly from Capitol, Figueroa and Michelson. The REIT says it is in ongoing negotiations with tenants with the intent to renew early.
In its 3QFY2020 financial and portfolio updates released via SGX, the REIT also reported a “strong” balance sheet remains with undrawn committed facilities of US$134.5 million ($183.1 million).
Year-to-date ended September 2020, MUST saw 4.6% of its portfolio renewed with positive reversions. During the period, the REIT executed 217,300 sq ft of leases with +7.9% rental reversion.
Rental collection for the same period came in at 98%. For 3QFY2020, rental collection stood at 94%. Both figures exclude rental deferment and abatement. The REIT provided rental deferment of 0.3% and abatement of 0.2% basd on y-t-d September 2020.
Gross borrowings as at Sept 30 stood at US$844.2 million while gearing ratio came in at 39.9%.
In its report, MUST added that it has seen physical occupancy rise amid a gradual return to its offices as at October 2020, despite the surge in new Covid-19 cases in the US.
Looking ahead, the REIT expects its trophy or Class A portfolio to ride out the crisis.
It has begun negotiations for 2021 loans and expects a 100% distribution pay-out for FY2020.
It will also focus on 2021 expiries targeting high-growth sectors. Its asset enhancement initiatives (AEIs) in Figueroa and Exchange are expected to drive leasing, in time to reposition the REIT for the reopening of the market.
Moving forward, the REIT will be targeting desirable locations focusing on high growth sectors such as tech and healthcare.
Units in MUST closed 3 cents higher or 4.1% up at 77 US cents on Nov 5.
