Manulife US REIT - Annual Report 2021

N.M.: Not meaningful Financial Review MANULIFE US REIT 24 Gross Revenue Gross revenue for the year decreased by 4.7% to US$185.1 million in FY2021, largely due to lower rental income arising from higher vacancies, higher rent abatements provided to tenants affected by COVID-19, lower portfolio car park income and higher non-cash amortisation of tenant lease incentives, partly offset by revenue contributions from the newly acquired properties in December 2021. Property Operating Expenses Property operating expenses decreased by 3.7% to US$75.6 million mainly due to a net reversal of provision 1 Refers to all operating expenses (including fees, charges and reimbursable costs paid/payable to the Manager and interested parties), excluding net foreign exchange gains or losses and finance expenses. 2 Net assets as at 31 December 2021 and 31 December 2020, respectively. of expected credit losses, partly offset by higher repair and maintenance expenses and incremental property expenses from the enlarged portfolio. Net Property Income Net property income of US$109.5 million for FY2021 was lower than FY2020 by 5.4%, mainly due to lower gross revenue, partially offset by contribution from the newly acquired properties and net reversal of provision for expected credit losses. FY2021 FY2020 Total operating expenses 1 (US$’000) 86,835 90,370 Net assets 2 (US$’000) 1,187,716 1,157,888 Total operating expenses as percentage of net asset value as at the end of the financial year (%) 7.3 7.8 FY2021 (US$’000) FY2020 (US$’000) Change (%) Portfolio excluding 2021 acquisitions 184,461 194,312 (5.1) 2021 acquisitions 638 - N.M. Gross revenue 185,099 194,312 (4.7) Portfolio excluding 2021 acquisitions 75,412 78,475 (3.9) 2021 acquisitions 140 - N.M. Property operating expenses 75,552 78,475 (3.7) Portfolio excluding 2021 acquisitions 109,049 115,837 (5.9) 2021 acquisitions 498 - N.M. Net property income 109,547 115,837 (5.4) (US$’000) (US$’000) Change (%) Gross revenue 185,099 194,312 (4.7) Property operating expenses (75,552) (78,475) (3.7) Net property income 109,547 115,837 (5.4) Interest income 21 166 (87.3) Manager’s base fee (8,560) (8,897) (3.8) Trustee’s fee (284) (288) (1.4) Other trust expenses (2,494) (2,646) (5.7) Finance expenses (29,145) (29,739) (2.0) Net income before tax and fair value changes 69,085 74,433 (7.2) Net fair value change in derivatives 13,896 (11,897) N.M. Net fair value change in investment properties (42,423) (128,519) (67.0) Net income/(loss) for the year before tax 40,558 (65,983) N.M. Tax (expense)/income (1,145) 22,699 N.M. Net income/(loss) for the year 39,413 (43,284) N.M. Income available for distribution to Unitholders 85,599 88,967 (3.8) DPU (US cents) 5.33 5.64 (5.5) FY2021 FY2020