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Manulife US Reit acquires 2 US properties for US$387m; sets up US$1b multicurrency debt issuance programme

1750 Pennsylvania Avenue in Washington DC

Phipps Tower in Buckhead, Atlanta

MANULIFE US Real Estate Investment Trust (Manulife US Reit) on Friday announced it has entered into agreements to acquire two properties in the US for US$387 million, and has established a US$1 billion multicurrency debt issuance programme aimed at increasing its financial flexibility by diversifying its sources of funding.

The properties acquired are 1750 Pennsylvania Avenue in Washington DC and the Phipps Tower in Buckhead, Atlanta, Manulife US Reit said in filings with the Singapore Exchange.

The property in the US capital, purchased for US$182 million, is a 13-storey, 277,243-square foot Class A office building that is located a block away from the White House and in proximity to the International Monetary Fund, the World Bank and the Federal Reserve.

It also counts the US government, leading US corporates and global agencies amongst its tenants, the Reit added.

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Meanwhile, Phipps Tower, purchased for US$205 million, is a 19-storey, 475,091 sq ft office tower located in one of the primary business districts of Atlanta.

The total acquisition cost for both properties is estimated at US$398.9 million, comprising the purchase price, the acquisition fee of US$2.9 million, and professional and other transaction fees and expenses of US$9 million. The manager's acquisition fee is to be paid in the form of units of Manulife US Reit units.

The funding mix for the acquisitions may comprise a combination of debt and issuance of capital market instruments such as perpetual securities under Manulife's new US$1 billion debt issuance programme and/or equity fund raising.

The Reit said proceeds from the US$1 billion programme may be used for working capital requirements and the general corporate purposes of the group.

DBS Bank has been appointed as arranger and dealer of the US$1 billion debt issuance programme.

Manulife US Reit closed at US$0.925 on Thursday.