Manulife US Reit Q3 distributable income rises 30.3% to US$6 million

[SINGAPORE] Manulife US Reit (MUST) posted a 30.3 per cent year-on-year increase in distributable income to US$6 million for the third quarter ended Sep 30, up from US$4.6 million in the corresponding period the year before.

The increase was mainly driven by higher net property income (NPI) and adjustments for non-cash property-related items arising from lower rent-free incentives at its Exchange and Michelson properties, based on its financial results released on Wednesday (Nov 4).

Income available for distribution per unit rose 30.8 per cent to US$0.0034, from US$0.0026 a year earlier, although the real estate investment trust (Reit) has suspended distributions to unitholders since 2023 under its recapitalisation plan and master restructuring agreement.

Under concessions granted by its lenders in December 2025, distributions must remain suspended until the fulfilment of certain reinstatement conditions and the end of the temporary relaxation of its bank interest coverage ratio covenant.

Revenue in Q3 2026 fell 8.9 per cent to US$24.9 million, from US$27.3 million previously, mainly due to the divestment of its Figueroa property in June.

The decline was partially offset by a one-off restoration fee income of US$1 million from a tenant at the divested property.

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NPI rose 8.9 per cent to US$12.2 million in the quarter, from US$11.2 million, mainly due to the one-off restoration fee.

The Reit recorded net income of US$6.2 million for Q3, compared with US$1.6 million in the year-ago period. This was supported by higher NPI and fair value gains on investment property and derivatives, partially offset by higher finance expenses.

For the nine months ended Sep 30, income available for distribution fell 9.3 per cent to US$17.7 million, from US$19.5 million previously.

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Revenue for the period declined 12.4 per cent to US$76.8 million, while NPI fell 14.7 per cent to US$35.3 million, largely reflecting property divestments.

However, same-store cash NPI rose 8.7 per cent to US$43.6 million for the nine-month period.

As at the end of September, the Reit’s portfolio occupancy stood at 67.8 per cent, down from 70.4 per cent as at end-June.

Its aggregate leverage stood at 54 per cent, compared with 54.1 per cent three months earlier, while its interest coverage ratio was 1.6 times.

The Reit had six office properties in the US, with a combined net lettable area of about 2.8 million square feet as at Sep 30.

Proceeds from the divestment of Figueroa were used to repay about US$35.6 million of debt due in 2026 and US$36.8 million of debt maturing in 2027, with about US$10 million retained for capital expenditure.

Units of MUST closed flat at US$0.032 on Tuesday.