My Personal Analysis of US Manulife REIT

My Personal Analysis of US Manulife REIT

In my last screening for dividend stocks, US Manulife REIT appeared top in the results with 8.736% dividend yield. This has got me interested to drill deeper and understand this REIT further. On a high level note, Manulife US REIT is a Singapore REIT established with the investment strategy principally to invest, directly or indirectly, in a portfolio of income-producing office real estate in key markets in the United States, as well as real estate-related assets.

Manulife US REIT was listed on SGX on 20 May 2016 and is the first pure play US office REIT to be listed in Asia. The IPO price of Manulife US REIT was 0.83 US cents. Read More

Why I did not subscribe to Manulife US REIT IPO

Why I did not subscribe to Manulife US REIT IPO

Manulife US REIT was recently listed on SGX on 20th May 2016. It is the first IPO in Singapore with United States office assets. The IPO was priced at US$0.83 per unit. I am not going to write about the financials of Manulife US REIT in this post as you can find the details in their investor reports. I will focus on the factors leading to my decision not to subscribe to this IPO.

Here are a few tempting factors for me to look into this REIT

  1. First kind of REIT to have assets in the United States. It is a pure play of United States office assets.
  2. Strong sponsor Manulife Real Estate with US$15 billion in real estate assets around the globe as of 31 December 2015.
  3. A form of asset diversification to My Sweet Retirement stock portfolio.
  4. Forecast attractive annualized yield of 6.6% (3.65 US cents).

We all know that IPO are usually priced higher and it is really uncertain whether the opening price on the first day of listing will end up higher or lower. I happen to know of another REIT with overseas assets which is IREIT Global.

IREIT Global which has assets in Germany was listed on SGX on 13th August 2014. IREIT Global offer price was S$0.88. If you look at the chart of IREIT Global, the price has fallen significantly since IPO.

IREIT Global Trend Graph

Readers of this post may have a different risk appetite. However, using IREIT Global as a comparison, I decided not to take the risk of subscribing to Manulife US REIT IPO. If price fall over the next few months, I may drill into this REIT further.

On Friday, 20th May 2016, Manulife US REIT opened on SGX at US$0.82 before falling as low as US$0.795.