Manulife US Reit Q4 DPU slips 5.9% to 1.44 US cents on enlarged unit base

Singapore

MANULIFE US Real Estate Investment Trust's (Manulife US Reit) distribution per unit (DPU) fell 5.9 per cent to 1.44 US cents for its fourth quarter ended Dec 31, from 1.53 cents a year earlier.

This was mainly due to an enlarged unit base following a placement and preferential offering to partially fund its US$198.8 million acquisition of 400 Capitol Mall, it said in a bourse filing on Wednesday.

Gross revenue increased 20.4 per cent to US$48.8 million for the quarter from US$40.5 million, on the back of contributions from the newly acquired Centerpointe and Capitol properties.

Manulife US Reit completed the purchase of 400 Capitol Mall in October 2019 after paying US$198.8 million for the freehold 29-storey Class A office tower.

Located in Sacramento, California's central business district, the building has a net lettable area (NLA) of 500,662 square feet (sq ft).

As for Centerpointe, the Reit in May 2019 paid US$122 million for the freehold Class A office building. It is located in Fairfax, Virginia, and has a NLA of 419,981 sq ft across two 11-storey blocks.

Manulife US Reit's net property income (NPI) grew 18.9 per cent on the year to US$30.3 million while distributable income climbed 15.5 per cent to US$22.6 million.

Unitholders will receive a total distribution of 1.45 US cents per unit on March 27, after books closure on Feb 13.

The 1.45 US cents payout comprises the Q4 DPU of 1.44 US cents as well as an additional 0.01 US cent for Sept 30. The 0.01 US cent is the balance remaining from the Q3 DPU.

For the full year ended Dec 31, DPU rose 7 per cent to 5.96 US cents from 5.57 US cents in 2018. Gross revenue jumped 23 per cent to US$177.9 million from US$144.6 million. NPI jumped 22.2 per cent to US$110.8 million from US$90.7 million.

As at Dec 31, Manulife US Reit's net asset value per unit was US$0.80 compared with US$0.83 previously.

Its gearing ratio was 37.7 per cent versus the regulatory limit of 45 per cent.

The Reit's manager said it has mitigated near-term interest rate risk with 95.1 per cent of outstanding loans on a fixed rate basis, with a weighted average interest rate of 3.37 per cent.

Jill Smith, chief executive officer of the Reit's manager, said 2019 was Manulife US Reit's best year, and its acquisitions of four office properties in strong US growth markets in the past two years diversified the Reit's NPI and positively contributed to its growth.

Manulife US Reit units closed at US$1.04 on Wednesday, down 2.8 per cent.