MANULIFE US Real Estate Investment Trust (Reit)’s adjusted distributable income (DI) per unit for the first half ended Jun 30 declined 27.5 per cent year on year to US$0.0129, versus US$0.0178 in the year prior.
On Monday (Aug 5), the Reit manager said adjusted DI was down 27.8 per cent to US$22.9 million after accounting for higher finance expenses incurred due to higher interest cost.
The DI was adjusted reflect the manager’s base fee of US$3.8 million, as well as a property management fee of US$2.5 million being payable in cash instead of units.
Gross revenue for H1 FY2024 was US$86.7 million, down 12.9 per cent overall and 8.1 per cent lower on a same-store basis. Net property income (NPI) for the period fell 22.7 per cent to US$42.8 million.
Same-store NPI was 16.7 per cent down to US$42.8 million, largely due to TCW Group’s lease expiration at Figueroa on Dec 31, 2023 as well as higher property operating expenses.
The percentage declines are after adjusting H1 FY2023 gross revenue and NPI to exclude Tanasbourne and Park Place, which were sold in April 2023 and December 2023 respectively.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
As at end-June 2024, the Reit’s unencumbered gearing ratio stood at 60 per cent whilst its average leverage ratio was 56.3 per cent.
Interest coverage ratio declined 2.2 times as at Jun 30, 2024, from 2.3 times as at Mar 31, 2024. The manager also noted a slightly shorter weighted average debt maturity of 3 years as at Jun 30 versus 3.2 years as at Mar 31.
Manulife Reit’s percentage of hedged/fixed rate loans stood at 80.2 per cent as at end-June 2024, above its optimal hedge ratio target of between 50 to 80 per cent.
The Reit has halted distributions to unitholders until end-2025 as part of its ongoing recapitalisation plan and master restructuring agreement.
John Casasante, chief executive and chief investment officer of the Reit Manager, said the manager’s strategic focus centres “firmly” on improving returns for unitholders.
“The execution of our recapitalisation plan remains a top priority, and we have commenced the process to sell three carefully selected assets that we believe would attract liquidity amid the challenging environment. We have also commenced high level discussions with potential off-market buyers for other targeted assets in the portfolio,” he said.
Casasante added that the level of interest from such prospective buyers has been “encouraging”.
Units of the Reit closed US$0.001 or 1.3 per cent down at US$0.078 on Friday.
