For Manulife US REIT, 2024 has been defined by an unwavering focus on the ‘stabilisation’ phase of its three-pronged strategic roadmap, leading to recovery and growth. Under a new management team, the Manager prioritised asset dispositions and sought to maximise sales proceeds for its debt repayment plan. This was despite persistent challenges such as a lack of liquidity and tight lending conditions in the U.S. office market. The Manager has made significant progress on the disposition front. In 4Q2024, it completed the divestment of Capitol in Sacramento, California, followed swiftly by the sale of Plaza in Secaucus, New Jersey in 1Q2025. The two properties were sold for a net consideration of approximately US$110 million and US$40 million, respectively. With the proceeds from Capitol, topped up with cash from its balance sheet, the Manager has repaid all US$130.7 million of its loans due in 2025. In March 2025, it also repaid US$40.0 million of its 2026 debts using proceeds from Plaza, and plans to further pay down the remaining US$163.9 million of 2026 debts by June 2025. The Manager is also actively engaged in discussions with other potential buyers, both on- and off-market, for targeted assets, and is evaluating alternative transaction structures to expedite deal closing and maximise value for Unitholders. Looking forward, the REIT's recovery will be driven by further asset dispositions as well as the Manager’s efforts to improve cash flows and returns through optimising its portfolio leasing and business operations. The Manager aims to advance to the recovery stage and resume distributions to Unitholders. Thereafter, growth could come from portfolio repositioning via diversification into other real estate sectors and permissible alternative real estate investments that offer attractive, accretive cash yields and are less capital intensive. While these phases require time and patience to roll out, they will position the REIT on the right path to return to a growth trajectory. Capitol KEY EVENTS GROWTH RECOVERY STABILISATION Plaza 14 | MANULIFE US REIT
RkJQdWJsaXNoZXIy NTkwNzg=