[SINGAPORE] The manager of Manulife US Real Estate Investment Trust (Reit) on Thursday (Aug 14) reported a distribution per unit for the first half of FY2025 of US$0.0084, down 34.9 per cent from US$0.0129 a year before.
Revenue declined 30.4 per cent to US$60.4 million for the period, from US$86.7 million in H1 FY2024, largely due to the divestment of Capitol Mall in Sacramento in October 2024, 500 Plaza in Secaucus, New Jersey, in February 2025 and Peachtree, a 28-storey Class A office building in Atlanta, Georgia, in May 2025.
The proceeds from the two 2025 divestments have gone towards repayment of approximately US$160 million of the group’s 2026 debts.
This is in addition to lower rental and recoveries income as a result of higher portfolio vacancy rate as well as lower recoveries income due to a reduction in current and prior years’ property tax.
Net property income stood at US$30.2 million for H1, down 29.5 per cent from US$42.8 million in the same year-ago period.
Income available for distribution declined 34.7 per cent year on year to US$14.9 million, from US$22.9 million, mainly due to the loss of income from the sale of the three properties. This was partially offset by a decrease in finance expenses due to lower debt balances from repayments in 2024 and 2025 and lower base management fees.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Portfolio occupancy was at 68.4 per cent on a same-store basis, and rental reversions were at minus 10 per cent. The manager of the Reit noted, however, that eight of 10 of its leases signed were above market rates. Its portfolio weighted average lease expiry remained at 4.6 years as at Jun 30, 2025.
Aggregate leverage as at Jun 30, 2025 stood at 57.4 per cent, with an interest coverage ratio of 1.6 times. Its weighted average debt maturity was at 2.8 years.
The manager of the Reit noted that “significant progress” has been made in debt repayments, as the Reit now focuses on recovery and growth. It has repaid all its 2025 debts and around 83 per cent of its 2026 debts, following an additional debt repayment of US$25 million in July 2025.
Around US$465 million or 45 per cent of the Reit’s outstanding debt has been paid down since December 2023, which leaves US$559 million of debt maturing between 2026 and 2029. For 2026, it has US$35.6 million of debt maturing in July that year. The subsequent debt maturity is 20 months away in April 2027.
John Casasante, chief executive officer and chief investment officer of the manager, said: “Future asset dispositions will align with our broader growth strategy as we evaluate liquidity across the portfolio to maximise proceeds. We remain disciplined in leasing to improve our income and book value. Our lenders have been supportive, and we continue to have discussions with them to explore strategies to mitigate risks.”
The counter closed flat at US$0.065 on Wednesday before the release of its results.