Manulife US REIT (MUST) may have had a weak quarter in 2QFY2022 ended June, but the impact dealt by falling US office occupancy are “largely priced in”, write RHB Group Research analyst Vijay Natarajan.
MUST reported distribution per unit (DPU) of 2.61 US cents (3.6 cents) for the 1HFY2022 ended June, down 3.3% y-o-y, as the unit base was enlarged after a private placement last December. That said, revenue, net property income (NPI) and distributable income were all up 10.6%, 2.8% and 6.9% y-o-y respectively.
“Manulife US REIT’s 2QFY2022 and 1HFY2022 results came in slightly below our forecasts,” writes Natarajan. “Return-to-office activities involving its gateway portfolio have been much slower than expected and weak compared to that of secondary growth markets. This uncertainty has resulted in slow leasing momentum and downsizing by existing tenants, although MUST’s long lease profile and limited upcoming lease expiries mitigates some of this impact. Overall, we believe that the current uncertainties are largely priced in.”