Manulife US REIT - Annual Report 2020

FY2020 (US$’000) FY2019 (US$’000) Change (%) Gross revenue 194,312 177,853 9.3 Property operating expenses (78,475) (67,077) 17.0 Net property income 115,837 110,776 4.6 Interest income 166 473 (64.9) Manager’s base fee (8,897) (8,334) 6.8 Manager’s performance fee - (1,360) (100.0) Trustee’s fee (288) (269) 7.1 Other trust expenses (2,646) (2,460) 7.6 Finance expenses (29,739) (26,180) 13.6 Net income before tax and fair value changes 74,433 72,646 2.5 Net fair value change in derivatives (11,897) (1,088) >100 Net fair value change in investment properties (128,519) (13,512) >100 Net (loss)/income for the year before tax (65,983) 58,046 N.M. Tax income/(expense) 22,699 (10,481) N.M. Net (loss)/income for the year (43,284) 47,565 N.M. Income available for distribution to Unitholders 88,967 83,341 6.8 DPU (US cents) 5.64 5.96 (5.4) FY2020 (US$’000) FY2019 (US$’000) Change (%) Portfolio excluding 2019 acquisitions 156,260 163,918 (4.7) 2019 acquisitions 38,052 13,935 >100 Gross revenue 194,312 177,853 9.3 Portfolio excluding 2019 acquisitions 65,785 62,528 5.2 2019 acquisitions 12,690 4,549 >100 Property operating expenses 78,475 67,077 17.0 Portfolio excluding 2019 acquisitions 90,475 101,390 (10.8) 2019 acquisitions 25,362 9,386 >100 Net property income 115,837 110,776 4.6 FY2020 FY2019 Total operating expenses, including all fees, charges and reimbursable costs paid to the Manager and interested parties 1 (US$’000) 90,370 79,495 Net assets 2 (US$’000) 1,157,888 1,258,178 Total operating expenses as percentage of net assets (%) 7.8 6.3 1 Excludes net foreign exchange gains or losses and finance expenses. 2 Net assets as at 31 December 2020 and 31 December 2019. Gross Revenue Gross revenue for the year increased by 9.3% to US$194.3 million largely due to contributions from Centerpointe and Capitol acquired in 2019. This was partially offset by lower rental income mainly from Michelson and Peachtree due to higher vacancies and lower portfolio carpark income. Property Operating Expenses Property operating expenses of US$78.5 million has increased by 17.0%, mainly due to Centerpointe and Capitol acquired in 2019 and provision for expected credit losses on trade receivables of US$3.6 million. As a result, NPI for FY2020 was US$115.8 million, an increase of US$5.1 million or 4.6% as compared to FY2019. N.M.: Not meaningful 20 MANULIFE US REIT FINANCIAL REVIEW