The first pure-play US office REIT listed in Asia recorded gross revenue of US$32.5 million, which was 63.4% higher than 2Q17. This was mainly due to contributions from the acquisitions of Plaza and Exchange in New Jersey which was made last year, Phipps in Atlanta acquired this year and newly acquired Penn in Washington D.C.
Net property income for 2Q18 also increased by 59.3% to US$20.4 million against the same period last year for the same reasons.
For 1H18, the REIT recorded gross revenue of US$63.7 million and net property income of US$40.0 million. In addition, distribution income for 1H18 increased by 57.5% to US$32.1 million.
Based on committed leases, portfolio occupancy remained very strong at 96.0% as at June 30. In addition, the REIT has a favourable lease profile with weighted average lease expiry (WALE) by NLA of 6.3 years, with 60.4% of the leases by NLA expiring in 2023 and beyond.
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As at June 30, the REIT’s gearing of 37.3% is well below the regulatory limit of 45.0%, and provides debt headroom to grow the portfolio. The weighted average debt maturity is 3.2 years, and debt expiry is well spread across the REIT’s seven properties from 2019 to 2023. In addition, 100% of the REIT’s debt are fixed rate loans which mitigates any near term interest rate risk on existing debt.
In its outlook, Manulife US REIT manager says overarching the positive economic data is another, greater uncertainty: US trade policy.
While words have started being converted into actions and there continues to be threats for additional protectionist policies, the tangible impact on GDP data has been limited.
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Going forward, sector-specific risks are increasing, and the higher degree of uncertainty could ultimately be reflected in more modest business investment and consumer spending than expected.
Units in Manulife US REIT last traded at 85 US cents.
