Manulife US REIT, which is trying to reduce debt, has sold one of its properties — 500 Plaza — and will book net proceeds of some US$39 million ($52.29 million).
The latest independent valuation of the asset was US$43.7 million, as at Dec 31, 2024.
The REIT had earlier sold another property called Capitol for a net consideration of US$110 million. By doing so, the REIT was able to pay off US$130.7 million of loans maturing this year, in November 2024.
The proceeds from the sale of Plaza will be used to pay down the REIT's debts due in 2026.
"We are currently in divestment discussions on additional properties which will further contribute towards debt repayment. This will bring the REIT closer to our recovery and growth phase," says John Casasante, CEO and CIO of the manager.
For its 2HFY2024 ended Dec 31, 2024, the REIT reported net property income of US$37.1 million, down 37.4% y-o-y. This brings full-year NPI to US$79.9 million, down 30.3% over the preceding FY2023.
Gross revenue for 2HFY2024 was down 25.5% y-o-y to US$80.8 million, bringing FY2024 revenue to US$167.6 million, down 19.4% over FY2023.
Manulife US REIT has suspended distribution for now as it focuses on reducing debt.
As at Dec 31, 2024, its unencumbered gearing ratio and aggregate leverage ratio increased to 64.2% and 60.8% respectively from three months ago, due largely to a 9.3% y-o-y decline in its portfolio valuation.
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Its weighted average debt maturity lengthened slightly to 2.9 years as at Dec 31, 2024; the trailing 12-month interest coverage ratio (ICR) declined to 1.7 times partially due to the one-off fee of US$2.3 million paid to lenders and does not reflect the full-year impact of the US$130.7 million debt repayment in November 2024.
Cash balance, as at Dec 31, 2024, was US$65.2 million.
So-called "same-store" occupancy dropped q-o-q from to 73.6%, from 75.4% in Sept 30, 2024.
The REIT executed some 611,000 sq ft of leases in FY2024, equivalent to 13.4% of the portfolio net lettable area.
It suffered an average rent reversion of -5.1% and -7.4% for leases signed in 4QFY2024 and for the full year, respectively, with five out of nine office leases signed in 4QFY2024 above market rents.
As at Dec, 31 2024, its portfolio weighted average lease expiry (WALE) was five years.
