Manulife US REIT 1Q DPU beats projections by 8.6% at 1.65 US cents

SINGAPORE (May 2): The manager of Manulife US REIT has announced a distribution per unit (DPU) of 1.65 US cents (2.3 Singapore cents) for the first quarter ended March 31, exceeding its projected DPU of 1.52 US cents by 8.6%.

Gross revenue came in at US$19.8 million (RM61.46 million), 1.3% below the projected US$20 million due to lower recoveries income, which is only recognised when applicable recoverable property operating expenses are incurred.

The REIT registered net property income of US$12.8 million, which was ahead of projections by 2.7% largely due to higher rental and other income as a result of rental escalations and higher car park income respectively.

As such, net income for the quarter was US$8.5 million, exceeding projections by 9.6% largely due to higher net property income and lower finance expenses.

Distributable income of US$10.4 million was ahead of projection by 7.3% largely due to higher net property income and lower interest costs.

Manulife US REIT’s distribution policy is to distribute 100% of its distributable income up to the financial year ended 31 Dec 2017 on a semi-annually basis.

The REIT had paid its first distribution of 3.55 US cents per unit, which had exceeded the forecast by 4.8%, on 30 Mar this year.

Moving forward, the manager says it will continue to focus on asset, lease and capital management of the portfolio.

It also notes relatively strong office absorption during the current US business cycle, with demand exceeding new supply for most of the past six years.

“With a portfolio occupancy of 97.2%, weighted lease expiry of 5.6 years and no debt expiring till 2019, we expect the portfolio to deliver a stable performance… We remain confident in the overall US commercial real estate market and will continue to seek investment opportunities that will deliver long term value to unitholders,” comments Jill Smith, CEO of the manager.

Units of Manulife US REIT closed flat at 84 Singapore cents last Friday. — theedgemarkets.com.sg

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