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Manulife US REIT - Maybank Kim Eng 2021-12-01: Growing Growth AUM

MANULIFE US REIT (SGX:BTOU) | SGinvestors.io MANULIFE US REIT (SGX:BTOU)

Manulife US REIT - Growing Growth AUN


Adding three assets at +4.4% DPU accretion

  • Manulife US REIT (SGX:BTOU) is adding three properties for US$201.6m at undemanding 5.8-7.0% cap rates, and delivering on its well-articulated acquisition strategy, with its latest deal. Post-deal, ‘growth markets’ concentration is set to rise from 21% to 28% of its AUM, with assets in Phoenix and Portland backed by long WALE and quality high-growth tech and healthcare sector tenancies.
  • Management is eyeing further AUM growth, but with gearing at 44%, we expect divestments could be prioritised.


Eyeing growth fundamentals in sunbelt/magnet cities

  • The portfolio includes two suburban office campuses - Diablo Technology Park and Tanasbourne Commerce Center, and Park Place, which comprises two class-A office buildings, in Phoenix (Arizona) and Portland (Oregon), which are among the US’ high-growth (lower-cost) magnet cities, expected to continue capturing an in-migration of STEM/TAMI talent pools.
  • Limited new competing supply in the respective submarkets, together with in-place rents that are at 9.3-14.7% below market rents (source: CoStar), are expected to support an average +12.3% rental reversion for the portfolio.


Assets backed by strong tenancies, long WALE

  • The properties are 93.4% occupied, and embedded its WALE extends from 5.1 to 5.2 years.


Gearing to hit 44%, potential capital recycling






Chua Su Tye Maybank Kim Eng Research | https://www.maybank-ke.com.sg/ 2021-12-01
SGX Stock Analyst Report BUY MAINTAIN BUY 1.000 SAME 1.000



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