Manulife US Reit's Q4 rights-adjusted DPU flat at 1.42 cents; beats forecast by 7.6%

MANULIFE US Reit's fourth-quarter distribution per unit (DPU) stayed flat at 1.42 US cents after adjusting for a rights issue, beating its own projection by 7.6 per cent.

Net property income for the three months ended Dec 31, 2017 rose 48.9 per cent to US$18.4 million from the previous year. Income available for distribution increased 50.8 per cent to US$14.6 million.

For the full 2017, distribution per unit (DPU) will work out to 5.53 US cents, adjusted for a rights issue of 41 rights units for every 100 existing units held that was completed in October 2017. The full-year DPU includes 2.96 US cents for the period from Jan 1 to June 28, 2017, and 2.57 US cents for the period from June 29 to Dec 31, 2017.

For the three months ended Dec 31, gross revenue rose 51.5 per cent to US$29.3 million from the preceding year.

The gross revenue growth was mainly attributed to contributions from the acquisitions of the Plaza and Exchange properties, and higher rental and other income from the IPO portfolio, Manulife said in a filing with the Singapore Exchange on Tuesday morning.

Manulife acquired the two properties at a purchase price of US$430.1 million and the valuation of the Reit's portfolio grew by US$48.9 million as assets under management (AUM) for the Reit increased by 57.4 per cent to over US$1.3 billion in fiscal 2017.

With the enlarged portfolio, property operating expenses for the fourth quarter rose by US$3.9 million.

During fiscal 2017, the Reit's portfolio achieved a high occupancy of 95.9 per cent and a weighted average lease expiry of 5.7 years.

From Jan 1, 2017 to Jan 31, 2018, the Reit's market capitalisation increased by 94.4 per cent to US$1 billion, and unit price increased by 28.4 per cent to US$0.98, Manulife said.

The Reit's other properties include Figueroa in Los Angeles and Peachtree in Atlanta.

Jill Smith, chief executive officer of the Reit's manager, said: "By beating our fourth quarter DPU projection by 7.6 per cent, we have ended the year with an unbroken record of exceeding our DPU in every quarter for fiscal 2017. Similarly, unitholders who had been with us since Jan 1, 2017 to Jan 31, 2018 would have enjoyed a massive total shareholder return of 36.7 per cent."

She added: "We will seek to double our AUM to US$2.6 billion in the next two years by acquiring accretive assets while maintaining an optimal capital structure."

Manulife US Reit units were trading down S$0.02 or 2.2 per cent at S$0.9 as at 10.30am.