According to a bourse filing on June 7, MUST’s tenant, The Children’s Place, has exercised its early termination rights for the leases expiring May 31, 2029 and will vacate its 197,949 sq ft of space on May 31, 2024.

The tenant contributes 3.3% of MUST’s overall gross rental income.

The leases include a one-time early termination option, which the tenant has chosen to exercise, says the manager. The tenant is obligated to pay rent until May 31, 2024 and has paid a termination fee of approximately US$4 million ($5.38 million).

The manager says it is currently working to secure new leases to fill the space occupied by the tenant. The tenant’s current rental is below the passing rents at the 11-storey property by approximately 16%, and market rents by approximately 21%.

Assuming that the lease was terminated on Jan 1, 2022, the pro-forma impact on MUST’s distribution per unit (DPU) on the loss of revenue for FY2022 would be a reduction in DPU before retention from 4.97 US cents to 4.62 US cents.

<span class='see_also_inread'><b>See also: <a class='gtm_see_also_1_inread' style='text-decoration: underline;' href='https://www.theedgesingapore.com/news/reits/manulife-us-reit-announces-proposed-divestment-phipps-sponsor?utm_source=website&utm_medium=article&utm_campaign=ONPAGESEO'>Manulife US REIT announces proposed divestment of Phipps to sponsor</a></b></span>

Units in Manulife US REIT closed 0.5 US cents higher, or 2.96% up, at 17 US cents on June 7.

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