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Manulife US REIT - OCBC Investment 2022-05-10: Downside Protection From Minimal Lease Expiry Profile

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

Manulife US REIT - Downside Protection From Minimal Lease Expiry Profile

  • Rental reversion improved to +3.9%.
  • Physical building occupancy rate at 34% in Apr 2022.
  • Leasing volume improved in the US.



Manulife US REIT's 1Q22 business update

  • Manulife US REIT (SGX:BTOU) reported its 1Q22 business update. Portfolio occupancy remained healthy but was down 0.6 ppt q-o-q to 91.7%, which remained above the US Class A average of 83%. The decline in occupancy rate was mainly due to downsizing/non-renewals of tenants, partially offset by an improvement in occupancy rate at Michelson.


Expecting low single digit positive rental reversion in 2022

  • Rental reversion improved to +3.9% vs -0.8% in FY21 with ~68,000 square feet executed in 1Q22, of which 54% came from new leases. 6.4% and 13.1% by gross rental income are due for expiry in 2022 and 2023, respectively.
  • We note that majority of the lease expiries are in the second half of 2022. With Manulife US REIT’s expiring rents in 2022 at 2.1% below market rents, management remains confident of achieving low single digit positive rental reversion in 2022.


Minimal impact from higher utilities cost






Chu Peng OCBC Investment Research | https://www.iocbc.com/ 2022-05-10
SGX Stock Analyst Report BUY MAINTAIN BUY 0.77 DOWN 0.800



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