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
- First kind of REIT to have assets in the United States. It is a pure play of United States office assets.
- Strong sponsor Manulife Real Estate with US$15 billion in real estate assets around the globe as of 31 December 2015.
- A form of asset diversification to My Sweet Retirement stock portfolio.
- 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.
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.
Hello there,
You cannot compare this simply by looking at IReit price chart, as there was corporate action like the huge rights exercise it did a few years back. As such, it is not appropriate to base your decision by just this factor alone.
Hi DS, thanks for your feedback. How will you have evaluate whether to subscribe to the IPO?
Hi my sweet retirement,
One possible way is to consider its financial ratios, PB, PE, gearing, average interest rates and interest coverage ratios. Many are available online if you search deep enough. And then also consider the portfolio it holds, and whether it adds to the diversity of ur existing holdings.
Also to consider her is the fact that the reit is traded in USD, so bear in mind possible exchange rate charges and losses depending on which broker you use.
If you really would like to compare, then use price charts which could take into account the corporate action would suit just fine.
Good luck!
Thanks for sharing!
Does any know this this Manulife REIT’s stabilizing manager still can buy how many units to stabilize the share price?!
How many units altogether is Manulife REIT’s stabilizing manager allowed to buy from the open market?!
As of today, the Stabilizing manager only bought 1,000,000 units， considered quite little. ( 250,000 on monday and 750,000 today)