Manulife US REIT

[winston]

Easing of lockdown in US raises hope for Manulife US REIT

by Samantha Chiew

SINGAPORE (May 11): Analysts are keeping a positive stance on Manulife US REIT (MUST) for its resilient portfolio.

On May 8, MUST announced its 1Q20 operational updates, which saw occupancy increase to 96.5% from 95.8% q-o-q, with a WALE of 5.7 years.

The REIT also updated that the lockdown in US is set to ease. During the lockdown, all nine of its offices remained open with 5-10% occupancy.

RHB Group Research has kept its “buy” recommendation on MUST with a new target price of 90 cents from 88 cents previously. The REIT is also one of RHB’s top pick.

Recent rollback of tax structure also provides additional savings.

MUST has received some rent relief requests from tenants but it does not sees merit in all. It has so far provided rental deferment for only 2% of tenants (by rental income) – majority in the F&B segment in its office buildings – and currently, does not intend to provide rental waiver.

Meanwhile, a vast majority of April rents has been collected. Two of three co-working tenants have paid April rent.

CGS-CIMB has similar sentiments and is maintaining its “add” call on MUST with a target price of US$1.05 from US$1.15 previously.

“We continue to like MUST for its resilient portfolio, with 60% of its tenants from finance, legal, tech, healthcare and government tenants,” says analyst Lock Mun Yee in a Friday report.

Looking ahead, MUST has a remaining 4% of portfolio gross rental income due to be renewed in FY20 and a further 6.1% in FY21.

The trust has guided that rental reversions are expected to be flat for the rest of FY20.

Meanwhile, gearing stood at 37.7% at end-1Q20, while interest coverage ratio is at 3.8 times. It has also received commitment to refinance its Peachtree loan due in Jul 2020 and management expects to achieve lower refinancing cost than existing levels.

Some 95.1% of its loans are on fixed rates and MUST has undrawn committed facilities of US$95.5 million.

“While MUST would likely continue to selectively look for inorganic growth opportunities, market transactions have remained relatively quiet,” says Lock.

As at 12.00pm, units in MUST are trading 2.8% higher at 72 US cents or about 0.9 times FY20 book with a dividend yield of 8.8%, according to CGS-CIMB’s estimates.

Source: The Edge

https://www.theedgesingapore.com/capita ... fe-us-reit

[winston]

not vested

Manulife US REIT (MUST SP)
US Return-to-Office Play

Manulife US REIT trades at an undemanding valuation of 8.5% forward yield (ie 330bp above Singapore peers), despite its freehold and Trophy/Class A properties.

Although we like its superior assets, long WALE and locations, we are increasingly cognisant of
tailwind risks from a secular shift in office demand − a delayed re-opening may lead to lasting flexi work policies by some companies which may reduce their square footage of office space.

Maintain BUY on valuation grounds with a target price of US$0.85.

Source: UOBKH

https://research.uobkayhian.com/content ... 7988f2ea73

[winston]

not vested

Manulife US REIT (MUST SP) - Resilient portfolio amid market turmoil

Manulife US REIT (MUST) is a pure-play U.S.-focused Singapore-listed REIT with a portfolio of nine resilient, well-diversified, prime Trophy or Class A office properties, strategically located in the key business districts across eight U.S. cities.

MUST’s lease structure provides rental income support and growth potential through annual and periodic rental escalations from 95.6% of its committed leases.

The built-in escalation clauses, averaging at 2% per annum provide rental upside while providing unitholders with some level of protection during market turmoil.

While leasing momentum is likely to remain weak in the U.S. in the near-term, the minimal lease expiry profile of MUST could limit the downside risks from a weak office market amid economic uncertaintiess. BUY.

Source: OCBC

[winston]

not vested

BRIEF-Manulife US Real Estate Investment Trust HY Rev Rises 18.3%

Aug 3 (Reuters) - Manulife US Real Estate Investment Trust:

* DPU OF 3.05 US CENTS FOR 1H 2020

* H1 NET PROPERTY INCOME US$62.2 MILLION VERSUS US$52.3MILLION

* HY GROSS REVENUE $98.6 MILLION, UP 18.3%

Source: Reuters

[winston]

not vested

Manulife US Real Estate Investment Trust, today reported its gross revenue of US$98.6 million and net property income of US$62.2 million for the first half ended 30 June 2020, recording year-on-year increases of 18.3% and 18.8% respectively.

The robust growth in income is largely due to contributions from Centerpointe and Capitol acquired in FY 2019, partially offset by lower rental income mainly from Michelson and lower portfolio carpark income.

For 1H 2020, the REIT reported a 20.0% YoY increase in distributable income to US$48.0 million.

This translated to a DPU of 3.05 US cents, 0.3% higher as compared to the same period a year ago.

Source: Phillips

[winston]

not vested

Staying resilient

MUST’s 1H20 DPU of 3.05 UScts, in line, at 49.8% of our FY20F forecast.

MUST enjoyed stable portfolio occupancy in 1H20 and expects to benefit from interest cost savings from debt refinancing starting 2H20.

Reiterate Add with an unchanged DDM-based TP of US$1.05.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... C204548646

[winston]

not vested

Manulife US Real Estate Investment Trust (MUST SP, BUY, TP: USD0.90)

In a Good Position To Weather Challenges

Company Update

Keep BUY and TP of USD0.90, 15% upside and c.8% yield.

2Q/1H20 results were in line.

Despite COVID-19 derailing the US economy, office assets have shown good resilience with occupancy uptick YTD and continued rental growth.

With limited near-term lease expiries, strong assets, and good quality tenants, we believe Manulife US Real Estate Investment Trust is well positioned to weather market challenges.

Its stable and attractive 8% dividend yield is attractive in current market conditions.

Source: RHB

https://research.rhbtradesmart.com/atta ... 83bd1c.pdf

[winston]

not vested

Manulife US REIT (MUST SP)

Share Price: USD0.77
Target Price: USD1.15
Recommendation: Buy

Staying At Work

MUST’s 1H20 DPU was +0.3% YoY, in line with ours/ consensus’ estimates.

Fundamentals remain strong, with its quality, well-placed urban/ suburban asset portfolio
expected to be more resilient than those in gateway CBDs, and better geared towards an increasing ‘live, work, play’ trend.

Valuations are compelling at 7.8% FY20 DPU yield vs the 5.5-7.5% offered by its S-REIT peers, backed by high DPU visibility with stable income growth and low leasing risks.

Source: Kim Eng

https://factsetpdf.maybank-ke.com/PDF/1 ... cfcdca.pdf

[winston]

not vested

Manulife US REIT (MUST SP)
2Q20: Riding Through COVID-19

Results are in line with expectations.

MUST’s ability to ride through the pandemic hinges on its long WALE (5.7 years), occupancy (96.2%), and diversified tenant base.

Management continues to downplay any negative impact from COVID-19 and WFH trends on office demand-supply dynamics, while seeing a potentially faster US recovery (vs GFC).

Maintain BUY with unchanged US$0.85 target price.

Source: UOBKH

https://research.uobkayhian.com/content ... 8135100acf

[winston]

MANULIFE US REIT (MUST SP) | BUY

PERFORMANCE REMAINED RESILIENT

1H20 DPU rose 0.3% YoY
Portfolio occupancy remained strong at 96.2%
96% of rents collected for 2Q20

Manulife US REIT’s (MUST) 1H20 results came in within our expectations.

Gross revenue and net property income increased by 18.3% YoY and 18.8% YoY to US$98.6m and US$62.2m respectively.

1H20 DPU rose 0.3% YoY to 3.05 US cents, making up 51% of our initial full-year forecasts, in-line with our expectations.

Leasing momentum remained strong in 1H20 with ~217,300 sq ft of leases (4.7% of portfolio) signed with a long WALE of 6.9 years, positive rental reversions of 7.9% and rental escalations of 2.4% per annum.

On average, MUST has collected 96% of rents for 2Q20.

As U.S. reopens from the lockdowns gradually, we could see rental collection return slowly to normalcy.

We like MUST’s resilient portfolio, quality tenants, stable income streams from built-in escalations and minimal lease expiry profile which could help MUST ride over the market turmoil.

We keep our fair value estimate of US$0.84 and maintain BUY.

Source: OCBC