Manulife US REIT 1QFY2021 Updates

Manulife US REIT

Manulife US REIT has provided their key business and operational updates for 1QFY2021 on 11th May 2021.

There are no information on Gross Revenue, Net Property Income (NPI) and Distribution since this is only an operational update.

Nevertheless, let us look at some of the key indicators to see how Manulife US REIT has performed in the first quarter.

Occupancy

Overall portfolio occupancy stood healthy at 92% with Weight Average Lease Expiry (WALE) at 5.3 years.

This is slightly lower than the last reported occupancy of 93.4%.

Lease Expiry

The number of expiring leases in 2021 and 2022 have been further reduced.

Manulife US REIT 1QFY2021 Lease Expiry Profile

From the chart below, you can see that 62.8% of the rentals have annual escalations of 2.7% p.a. in-place. This will benefit Manulife US REIT in terms of growing its revenue y-o-y.

Despite such rental escalations, new leases are minimal with 93.6% are lease renewals. This is a positive sign that Manulife US REIT is able to retain its tenants.

Manulife US REIT 1QFY2021 Rental Escalations

Debt

Gearing stood at 41.3% which is still below the MAS limit of 50%.

As you can see from the chart below, the loans due in April 2021 was refinanced. Thus, the Weighted Average Debt Maturity increased to 3.4 years.

In conclusion, there is no worrying debt for now in 2021.

Manulife US REIT 1QFY2021 Debt Maturity Profile

Current Dividend Yield

Based on the current share price of US$0.73 and FY20 full year DPU of 5.64 cents, this translate to a current dividend yield of 7.73%.

Summary

As more US citizens get vaccinated, the government lock down rules have relaxed slightly. This benefits the overall US economy which in turn will stimulate the recovery of US REITs such as Manulife US REIT.

I identified 2 key components which I feel is the strength of Manulife US REIT. They are

  1. Annual rental escalations
  2. Long WALE providing stability

The above are definitely strong reasons to keep invested in Manulife US REIT and I shall top up my stock portfolio when opportunity arises!

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