MUST needs the transaction market to pick up again so that it can divest some of its non-core assets to lower debt levels. The REIT’s aggregate leverage is at 56% based on rules as set out in the Code on Collective Investment Schemes (CIS Code) issued by the Monetary Authority of Singapore. Based on its bank covenants, all MUST’s loans are current and its aggregate leverage is at 59.9%. The REIT needs a rescue package urgently.
Manulife US REIT’s (MUST) operational metrics have improved in its 3QFY2023, the three months to September. Rental reversions in the third quarter rose by 24.2% y-o-y. Leasing in MUST's sub-markets appear to be on a more stable footing in terms of tenant demand; lease terms are beginning to tick up again and tenants are comfortable with signing longer term leases. At the same time, tenant incentives (TI) continue to moderate.
“It’s still a tenants’ market but terms are getting closer together and concessions are beginning to moderate,” Tripp Gantt, CEO of MUST’s manager says. “We're beginning to find some firmer footing on some of the fundamentals that underline the leasing market. I wish I could say the same thing about the transaction market. The US transaction market continues to be very slow, and essentially frozen,” he acknowledges.
