Monday, February 11, 2019

Manulife Reit - Strong Performance To End The Year

Manulife Reit published their Q4 FY18 results this morning which saw them registered an impressive 55.4% increase year on year on the Net Property Income (NPI) due to their 2018 recent acquisitions of the two buildings - Penn in Washington DC and Phipps in Atlanta).

In terms of bottomline DPU performance, it grows by 3.6% year on year to end the financial year at 6.05 US cents.



At the current share price of 85 US cents, this represents a decent 7.1% yield for exposure to a freehold Top Grade A quality of US commercial property.

Do note that even while the properties are freehold, the management will have to do AEI enhancement every now and then for wear and tear, and to remake the office look to attract potential tenants. These AEIs typically cost them in the range of $8m to $10m for a smaller to midscale kind of enhancement which they will manage to self-fund using their free cash flow.

For the past 4 quarters, management has managed to increase the operational performance of their properties based on the increasing net property income that is shown to us in the slides.

You can see this trickles down to increasing DPU in the past 4 quarters, from 1.51 US cents in Q1 to 1.53 US cents in Q2 to 1.51 US cents in Q3 and 1.54 US cents in Q4 this quarter.

In terms of debt maturity, it has gone down to 2.7 years, mostly because they are still negotiating to refinance the $110m loan for their Figueroa property.

The average financing interests rate has slowly creeped up to 3.27% this year and if we based on the latest loan they took on their two most recent acquisitions, we can expect this to go up further.




The value driver to shareholders for this will be if management can pass these costs down to the tenants in the form of rental escalations.

Leases rental reversion in FY18 while stands at an impressive 8.9%, it has gone down from the lower base of double digit last financial year.

Manulife has applied for a $1b multi - currency debt programme to drawdown on their debts in 2018 and with the cap of 45% gearing they have around $200m of additional debts they can undertake to play with.

Judging from their lofty ambition to increase their AUM target, along with the relative 7.1% yield, and the availability of many pipeline in the US yielding more than 5% NPI and 7% cap rates, in particular the Dallas, Houston and Pittsburgh area, it won't be too difficult for them to acquire more properties sooner or later.



This is dissimilar to situations in Singapore where most grade A commercial properties are going for around 3.5% cap rates, which makes it harder for management to "acquire" to grow shareholders value.

This can be both good and bad, depending on what your situations are.

Personally for me, I'm a bit wary of management who tried to grow aggressively at the expense of getting a truly solid property which can grow long term. The higher the share price is, the lower the dividend yield to shareholders, the easier for management to do an equity placement and the likely chances are extremely big.

If I were them, I'd already be working on my next M&A target given the current bullishness of the Reit situation and acquisition can sometimes be a double-edged sword.

Still, what the management has done so far has been very pleasing to shareholders with the way they are engaging minority shareholders like us and allowing us to clarify things with them.

Management has reiterated that their current rental leases for most properties are between 5% to 10% lower than the market rate. I am not too sure if that is due to asset enhancement which will play catch-up at a later stage or management indicating stronger reversion growth once occupancy are higher. Either way, it's good to clarify why their rentals are below the market.

They also managed to renew Hyundai recently in Jan 2019 in Michelson area so it'll be good to understand if they managed to secure the renewal at a positive reversion.

*Vested with 81,000 shares as of writing.

Thanks for reading.

If you like our articles, you may follow our Facebook Page here

12 comments:

  1. Hi, just wondering why you choose Manu REIT and sell away keppel KBS ? the latter have a higher dividend yield and higher room for share price appreciation ?

    ReplyDelete
    Replies
    1. Hi Darren

      I was holding both Manulife and KBS the other time when the tax ruling was still not yet clarified. Fearing things might go wrong, I went with reducing my exposure to one of them which happens to be KBS but kept Manulife.

      KBS has indeed higher yield but their properties are not as quality graded as Manulife properties. The higher yield takes that into account.

      I think both KBS and Manu are about as fairly valued as they get right now after their run up so now it's back to the growth stories they've been wanting to increase their aum and see who's got a better buy.

      Delete
  2. We offer personal finance for debt consolidation, bad financial credit, unsecured financing, bad credit financing and instant secured financing at cheap rate. Do you have a company or company that needs funding to start business needs, personal finance, and debt consolidation? for more information. We will provide you with funding to meet your needs. For more information contact: allrisefinancial@gmail.com for more information

    ReplyDelete
  3. Thanks for the info. I am also now getting interested into Manulife Reit. Seems a gerat deal.

    ReplyDelete
  4. Hello everyone..Welcome to my free masterclass strategy where i teach experience and inexperience traders the secret behind a successful trade.And how to be profitable in trading I will also teach you how to make a profit of $12,000 USD weekly and how to get back all your lost funds feel free to email me on(brucedavid004@gmail.com) or whataspp number is +22999290178






    Hello everyone..Welcome to my free masterclass strategy where i teach experience and inexperience traders the secret behind a successful trade.And how to be profitable in trading I will also teach you how to make a profit of $12,000 USD weekly and how to get back all your lost funds feel free to email me on(brucedavid004@gmail.com) or whataspp number is +22999290178




    Hello everyone..Welcome to my free masterclass strategy where i teach experience and inexperience traders the secret behind a successful trade.And how to be profitable in trading I will also teach you how to make a profit of $12,000 USD weekly and how to get back all your lost funds feel free to email me on(brucedavid004@gmail.com) or whataspp number is +22999290178

    ReplyDelete
  5. COLLINS GUZMAN FUNDING'S

    We offer a variety of Financial packages at a very low interest rate, We stand apart from other lenders because we believe in customer service, We offer the right solution to your financial needs.In general we are FINANCE COMPANY, We offer loan at 2% interest rate, Commercial loans, business loans, home loans, car loans and debt consolidation loan are available for you. Contact us for more information via E-MAIL: collinsguzmanfundings@gmail.com

    Names:
    Occupation:
    Loan Amount Needed:
    Loan Duration:
    Your Country:
    Mobile NO:
    Purpose Of Loan:
    Email Address:
    monthly income:
    Sex:
    Age:

    Thanks and best regards
    Mr Collins Guzman
    WhatsApp or Text: +1 (786) 598-8751

    ReplyDelete
  6. I want to share a testimony of how Dr UDI herbal mixture cream saved me from shame and disgrace, my penis was a big problem to me as the size was really so embarrassing ,and i was also having weak erection problem i had so many relationship called off because of my situation, i have used so many product which i found online but none could offer me the help i searched for Which was very painful and then i saw some few testimonies about this herbal specialist called Dr UDI and decided to email him on so I gave his herbal product a try. i emailed him and he got back to me and we discussed, he gave me some comforting words and encouraged me also ans then gave me his herbal pills and cream for Penis Enlargement Within 1 week of it, i began to feel the enlargement of my penis, " and now it just 2 weeks of using his products my penis is about 10 inches longer and am so happy contact Dr UDI via (drudiherbalhome@gmail.com) Via whatapp on this number +2348051243538 or you visit his website
    https://drudiblogaddress.blogspot.com/
    https://drudiherba.home.blog:

    ReplyDelete
  7. Am a living kidney testifies, i was diagnosed with chronic kidney disease
    about five years ago from taking a certain medication. I have 50% loss, but
    have urinary tract infections constantly, suffer from fatigue, depression,
    and cramps, I thought all hope was gone, not until I come across how d.r
    ekpen heal a lot of patients with (herbs medication root & herbs) you are
    there suffering for same ensure, you contact on WhatsApp +2348102454875, or
    Email: doctorekpen222@gmail.com, get cure from him & be free from all kind
    of disease.
    Website https://doctorekpenherbal.home.blog/

    ReplyDelete
  8. Welcome. BE NOT TROUBLED anymore. you’re at the right place. Nothing like having trustworthy hackers. have you lost money before or bitcoins and are looking for a hacker to get your money back? You should contact us right away it’s very affordable and we give guarante to our clients. Our hacking services are as follows:
    -hack into any nkind of phone
    _Increase Credit Scores
    _western union, bitcoin and money gram hacking
    _criminal records deletion
    _Hacking of phones(that of your spouse, boss, friends, and see whatever is being discussed behind your back)
    _Security system hacking...and so much more. Contact THEM now and get whatever you want at
    Superior.hack@gmail.com
    +16692252253


    IT HAS BEEN TESTED AND TRUSTED

    ReplyDelete

  9. CONTACT US FOR ALL KINDS OF HACKING JOB @ chauphampham42@gmail.com We offer professional hacking services , we offer the following services;
    -University grades changing
    -Bank accounts hack
    -Erase criminal records hack
    -Facebook hack
    -Twitters hack
    -email accounts hack
    -Grade Changes hack
    -Website crashed hack
    -server crashed hack
    -Skype hack
    -Databases hack
    -Word Press Blogs hack
    -Individual computers hack
    Control devices remotely hack
    -Burner Numbers hack
    -Verified Paypal Accounts hack
    -Any social media account hack
    -Android & iPhone Hack
    -Text message interception hack
    -email interception hack
    -Untraceable Ip etc.
    Contact us at chauphampham42@gmail.com or text or call (601) 357-3187 for more inquiry..
    Track Calls log and Spy Call Recording.
    Monitoring SMS text messages remotely.
    Cell phone GPS location tracking. Spy on Whatsapp Messages.
    Free Update and 100% Undetectable.

    ReplyDelete
  10. hello everyone here i am Jack Mark a medical doctor from United Kingdom , i want to share a great testimony of how Dr AKIOYA herbal mixture cream saves me from shame and disgrace, my penis size was a big problem to me as the size was really so embarrassing and discouraging, a 39 year old full grown man like me having 4 inches penis and to worsen it i don't last in sex i cant even last two minutes it was really a thing of shame my wife was really tired of me because my sex life was very poor , she never enjoyed sex, i was always thinking and searching for solutions everywhere until last two months when i saw a testimony of how Dr AKIOYA herbal mixture cream have been helping people from the globe,i saw one MR KENNETH BERTNEY testifying of how Dr AKIOYA helped him enlarge his penis size so i decided to give him a try ,i visited his website link https://drakioyaherbalhome.blogspot.com/ we talked and he gave me steps to follow which i did and to my greatest surprise in less than two weeks of taking the herbal mixture cream my penis grow to 8 inches i couldn't believe my eyes and as i speak now my penis is now 10.5 inches long and i was amazed when my wife said i satisfy her so well now all thanks to Dr AKIOYA herbal mixture cream,i will forever be grateful To him i also learnt that Dr AKIOYA also have the herbal cure to problems like

    PENIS ENLARGEMENT
    ERECTILE DYSFUNCTION
    DIABETES type 1 and type 2
    HERPES GENITAL WART
    LOW SPERM COUNT
    WEAK ERECTION
    BREAST ENLARGEMENT
    PROSTRATE CANCER
    HIV/AIDS
    SPELL OF ALL KINDS LIKE EX BACK,CANCEL DIVORCE,BREAK UP SPELL ,PREGNANCY SPELL,PROMOTION SPELL,JOB SPELL
    ALS
    HPV 123
    PILE
    ASTHMA
    HEART FAILURE
    PREMATURE EJACULATION
    HEPATITIS A,B,C AND MANY MORE
    so if you you are suffering from any of this problems please do not hesitate to contact him now email drakioya17spellhome@gmail.com website http://drakioyaherbalcenter.home.blog
    https://drakioyaherbalhome.blogspot.com/ you can call him or Whatsapp Dr AKIOYA via whatsapp +2348105257464 thanks

    ReplyDelete
  11. I want to testify about United blank atm cards which can withdraw money from any atm machines around the world. I was very poor before and have no job. I saw so many testimony about how United hackers send them the atm blank card and use it to collect money in any atm machine and become rich. I email them also and they sent me the blank atm card. I have use it to get 90,000 dollars. withdraw the maximum of 5,000 USD daily. United hackers  is giving out the card just to help the poor. Hack and take money directly from any atm machine vault with the use of atm programmed card which runs in automatic mode.

    Email: unitedblankatmhackcard@gmail.com  

    ReplyDelete

UA-57154194-1