MANULIFE US Real Estate Investment Trust's (Manulife US Reit) manager on Friday said the Reit saw an increase in occupancy to 96.5 per cent in Q1 2020 from 95.8 per cent the previous quarter.

The Reit's weighted average lease expiry (WALE) stands at 5.7 years. A minimal 4 per cent of its portfolio by net lettable area will expire in 2020, according to an operational update.

The manager had executed about 147,000 square feet of leases at plus 8 per cent rental reversion with 7.8 years WALE. The portfolio's rental escalations stand at 2 per cent per annum.

When it comes to financials, the manager said the reversion to the tax structure similar to what was adopted during the Reit's initial public offering resulted in net savings of around 0.7 per cent of fiscal 2019 distributable income for FY2021 from the Barbados tax savings, net of compliance costs.

The Reit has also received a commitment to refinance a loan due in July 2020 for its Peachtree asset.

As at March 31, 2020, the group has a gearing of 37.7 per cent and interest coverage of 3.8 times. It also has 95.1 per cent of fixed-rate loans and undrawn committed facilities of US$95.5 million.

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On the Covid-19 situation, the manager said that the US lockdown is set to ease with around 22 states reopening. Georgia - where its Peachtree asset is located - has been allowed to reopen fitness centres, salons, restaurants and selected entertainment venues.

The manager added that all nine of the Reit's offices remain open, with buildings being 5 per cent to 10 per cent occupied.

Looking ahead, the Reit manager said it has collected a vast majority of April 2020's rent. The refinancing of the Peachtree loan with a five-year tenor is expected to be at an advantageous rate.

Moreover, the Reit has received a strong commitment from the sponsor to ride through the novel coronavirus pandemic. Rent deferment has been provided to around 2 per cent of tenants by gross rental income.

The Reit's portfolio is also resilient, with around 60 per cent of tenants coming from finance, legal, technology, government and healthcare sectors, the manager added.

Manulife US Reit units were trading 0.5 US cent or 0.7 per cent higher at 70.5 cents as at 9.47am on Friday.