• Results were in line with expectations on higher contributions from acquisitions of Plaza, Exchange, Penn and Phipps.
• Manulife US REIT has seen positive rental reversion of 7.2% ytd, partly due to its built-in rental escalations.
• With a diversified tenant base and 100% fixed-rate financing, the portfolio stands resilient in view of US trade friction (rising sector-specific risks) and impending rate hikes.
• Maintain BUY with a lower target price of US$1.06.

Results

Results in line with expectations.

Manulife US REIT (MUST) reported 2Q18 distributable income (DI) of US$16.5m, bringing 1H18 DI to US$32.1m. 2Q18 gross revenue and NPI rose 63.4% y-o-y and 59.3% y-o-y respectively due to higher contributions from Plaza and Exchange in New Jersey (acquired in 2017), as well as the newly acquired Penn in Washington D.C. and Phipps in Atlanta (acquired in 2018).

Results were in line with our expectations, with 1H18 DI forming 52% of our full-year forecast.

Source: UOB Kay Hian Research - 07 Aug 2018