MANULIFE US REIT (SGX:BTOU)
Manulife US REIT - Increased Exposure To High-growth Tech & Healthcare Sectors
- Manulife US REIT (SGX:BTOU) has entered into purchase agreements to acquire three properties in Phoenix, Arizona and Portland, Oregon. The trio of acquisitions reinforces Manulife US REIT’s plans to increase exposure to high-growth tech and healthcare sectors.
- The DPU-accretive acquisitions would be funded via a private placement and existing loan facilities. Maintain BUY with an attractive yield of 8.1%.
Manulife US REIT announced asset acquisition.
- Manulife US REIT announced on 30 Nov 21 that it will acquire three properties in high-growth Sunbelt/magnet states for a total purchase consideration of US$201.6m excluding transaction costs. Two of the properties (Diablo and Park Place) are located in the suburbs of Phoenix (Tempe and Chandler) and one property (Tanasbourne) in Hillsboro, Portland. The assets are located in attractive locations with lower cost of business, large catchment of tech and healthcare companies, close proximity to highly-skilled talent pools and robust population growth.
- Manulife US REIT expects the acquisition to be completed by Dec 21. The acquisitions would be DPU accretive to unitholders.
Enhance portfolio resilience.
- The trio of properties has a weighted average occupancy rate of 93.4% and a 5.9-year weighted average lease expiry (WALE). Management expects Diablo’s occupancy of expected to increase pro-forma 1H21 DPU by 4.4% and slightly decrease 1H21 NAV to US$0.70/unit (US$0.71/unit).
Earnings revision
- We adjust 2021-23 DPU forecast to incorporate the new acquisitions. We decrease our 2021 DPU forecast for Manulife US REIT by 3.9% due to a larger unit on DDM (required rate of return: 8.0% terminal growth: 1.0%).
- See
- Catalysts:
- Positive newsflow on office leasing activity.
- Return to office in the US.
Llelleythan Tan
UOB Kay Hian Research
|
Jonathan KOH CFA
UOB Kay Hian
|
https://research.uobkayhian.com/
2021-12-03
SGX Stock
Analyst Report
0.87
UP
0.840
