The property is set to be sold to a municipal entity for a gross consideration of US$92.5 million, around 6% below its end-2025 valuation.
Natarajan says the proposed sale of the Figueroa will mark a “major milestone” in the REIT’s efforts to exit its lenders’ master restructuring agreement (MRA). Net proceeds from the transaction are expected to be used to fully repay debt due in July 2026 and partially reduce debt maturing in 2027, which should lower gearing to 55.4% from the current 58%
However, Natarajan says the REIT’s growth outlook has turned “cloudy”, with volatile interest rates likely to dampen transaction activity even as plans are in motion to divest two more office assets. This move is to reduce leverage before gradually resuming distributions, while exploring up to US$600 million in acquisitions across industrial, living and retail sectors.
While the REIT intends to eventually resume distributions after stabilising its balance sheet, RHB does not expect dividends to return in the near term.
See also: Manulife US REIT says it will resume distributions at ‘sustainable payout ratio’ after MRA exit
Still, Natarajan notes that leasing demand remained resilient, supported by a “flight to quality” trend and limited office supply in the US market. Assuming the Figueroa sale is completed, portfolio occupancy would improve to 73.2%, while only 4% of leases are due for expiry in FY2026.
RHB has lowered its FY2026 and FY2027 distributable income forecasts by 10% and 11% respectively to account for completed divestments, saying that they “do not expect a dividend resumption for now, as MUST’s focus remains on reducing leverage.” Its target price continues to be pegged at 0.3 times FY2026 forecast book value.
Prior to the midday break, units in MUST were trading 0.1 US cent lower or 1.7% down at 5.6 US cents.
