SINGAPORE (Aug 20): Manulife US Real Estate Investment Trust’s (Manulife) headline distribution per unit growth for 1HFY2018 ended June 30 is not really representative of its future yield and DPU growth from its current portfolio of five Class A and two trophy buildings in the US, all on freehold land. Class A and trophy buildings are those with large floor plates, high ceilings, large windows (preferably floor to ceiling), natural lighting and other high-end specifications.
For 1HFY2018, Manulife’s DPU fell 14.2% y-o-y to 2.53 US cents because of an enlarged unit base from a preferential offering that was completed in June and only nine days of income contribution from the acquisitions of 1750 Pennsylvania Avenue (Penn) in Washington DC and Phipps Tower (Phipps) in Atlanta. As at June 30, 2018, Manulife had 1,269.9 million units in issue compared with 1,036.1 million as at March 31.
According to Manulife’s original estimates, on a pro forma basis, distributable income rises to US$47.5 million ($65.5 million) from US$46.7 million recorded for FY2017, but this sounds very modest. For 1HFY2018, Manulife reported distributable income of US$32.14 million, up 57.6% y-o-y, on the back of a 60.2% increase in revenue to US$63.67 million and a 56.6% rise in net property income to US$40.03 million.
