Manulife US Reit reports 92% portfolio occupancy in Q1

MANULIFE US Reit on Tuesday announced a portfolio occupancy of 92 per cent for the first quarter ended March 31, 2021.

While this was lower than the 96.5 per cent occupancy reported the year before, the Reit manager highlighted in its operational update that this was still above the US Class A average of 82 per cent, according to a recent JLL report.

The Reit's weighted average lease expiry for the latest quarter stands at 5.3 years.

Its manager had executed about 270,000 square feet (sq ft) or 5.8 per cent of leases by portfolio net lettable area at plus 2.1 per cent rental reversion - mainly from the finance and insurance, administrative, advertising and legal sectors. In-place rental escalations stood at 2.1 per cent per annum.

The manager also noted reduced 2021 and 2022 expiries of 4.3 per cent and 13 per cent, from 5.7 per cent and 18.1 per cent, respectively.

As at March 31, 2021, Manulife US Reit had a gearing of 41.3 per cent and interest coverage of 3.9 times. Post refinancing completed in April 2021, it had a lower weighted average interest rate of 3 per cent and increased weighted average debt maturity of 3.4 years.

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Highlighting its diversified tenant base and limited supply in the markets in which the Reit operates, the manager believes the post-Covid-19 themes of a growing tech sector and strong demand for healthcare, among others, will provide an uplift for the Reit.

Going forward, it intends to target "magnet cities" with large population shifts that propel rent and job growth, as well as capture in-demand tenants from the technology, life sciences and healthcare sectors.

Units of Manulife US Reit ended 1 US cent or 1.33 per cent higher at 74 cents on Tuesday.