Manulife US REIT · SGX:BTOU
Manulife US REIT — Q1 2019 Earnings Presentation
32 slides from Manulife US REIT's earnings presentation, Apr 25, 2019
Slide 1: 1Q 2019 Financial Results
Peachtree, Atlanta, Georgia 1Q 2019 Financial Results (1 Jan 2019 to 31 Mar 2019) 25 April 2019
Slide 2: Important Notice
Important Notice This presentation shall be read in conjunction with Manulife US REIT’s financial results announcement dated 25 April 2019 published on SGXNet. This presentation is for information purposes only and does not constitute or form part of an offer, invitation or solicitation of any offer
Slide 3: Contents
Contents 1 Financial Highlights 2 Portfolio Performance 3 Looking Forward 4 Appendix: U.S. Outlook and Highlights 5 Appendix: About Manulife US REIT 3
Slide 4: Financial Highlights
Ee a Pi ml La Financial’Highlights
Slide 5: 1Q 2019 Key Highlights
1Q 2019 Key Highlights Net Property Income Distributable Income Adjusted Distribution per Unit (DPU) US$25.1 m US$19.3 m 1.51 US cents increased 27.7% YoY increased 23.7% YoY increased 0.7%1 YoY Occupancy Rate WALE Gearing Ratio 97.4% 6.0 Years 37.6%2 (1) Based on Adjusted DPU for 1Q 2018 of 1.50 US
Slide 6: 1Q 2019 Adjusted DPU Increased 0.7% YoY
1Q 2019 Adjusted DPU1 Increased 0.7% YoY 1Q 2019 1Q 2018 Change (US$’000) (US$’000) (%) Gross Revenue 40,025 31,153 28.5 Net Property Income 25,084 19,650 27.7 Net Income 13,724 11,534 19.0 Distributable Income 19,343 15,633 23.7 DPU (US cents) 1.51 1.232 22.8 Adjusted DPU1 1.51 1.50 0.7 (US cents)
Slide 7: Delivering Robust Income through Fortified Portfolio
Delivering Robust Income through Fortified Portfolio Diversified and Stable Net Property Income Net Property Income (US$ m) 30.0 +27.7% 25.1 25.0 20.0 19.7 15.0 10.0 5.0 5.3 5.3 5.0 4.0 4.0 4.7 3.0 3.2 3.2 2.3 2.2 2.6 0.0 1 1 Portfolio Figueroa Michelson Peachtree Plaza Exchange Penn Phipps 1Q 2019
Slide 8: Strong Balance Sheet
Strong Balance Sheet Gross Borrowings As at 31 Mar 2019 (US$’000) US$673.8 m Investment Properties 1,753,004 Gearing Ratio Total Assets 1,794,013 37.6%3 As at 31 Mar 2019 Borrowings 670,4821 Weighted Average Interest Rate Total Liabilities 752,124 3.28% Net Assets Attributable to 1,041,889 Unitholde
Slide 9: Disciplined and Prudent Capital Management
Disciplined and Prudent Capital Management Well-Spread Debt Maturity Profile1 Figueroa’s Loan Refinancing US$ m • In advanced negotiations with local banks 300 • To benefit from lower interest rate environment 250 219.5 200 95.5 Penn 172.0 132.0 98.2% Fixed Rate Loans 150 110.0 Exchange 105.0 Figuer
Slide 10: Portfolio Performance
Portfolio Performance
Slide 11: Favourable Lease Profile with WALE of 6.0 Years
Favourable Lease Profile with WALE of 6.0 Years1 Lease Expiry Profile as at 31 Mar 2019 (%) 54.8 56.0 Peachtree Midtown Atlanta 16.7 16.7 • Atlanta: 10th largest economy in U.S. with 8.0 7.6 7.0 7.2 8.3 8.5 GDP growth of 3.7%2 and unemployment rate 5.2 4.0 of 3.8%3 2019 2020 2021 2022 2023 2024 and
Slide 12: Well-Diversified Tenant Base
Well-Diversified Tenant Base Gross Rental Income Breakdown No Tenant Contributing more than by Trade Sector 7.3% of Gross Rental Income Top 10 Tenants by Gross Rental Income (GRI) Accommodation and Manufacturing, 1.6% Food Services, Architectural and 0.9% Engineering, 2.1% Other, 2.3% Tenant Sector
Slide 13: Strong Growth Markets with Limited Supply
Strong Growth Markets with Limited Supply Passing Rent (US$) 60.0 Average Market Passing Rent MUST's Gross Passing Rent Rent Growth Potential 40.0 Majority of our properties are 44.26 36.52 38.79 39.27 30.09 41.39 56.63 5% – 14% below market rents 20.0 Downtown Los Irvine, Orange Buckhead Atlanta Mi
Slide 14: Looking Forward
Looking Forward
Slide 15: Poised for Growth
Peachtree, Atlanta, Georgia Poised for Growth U.S. is the Largest Real Estate Market in the World 1 U.S. economy remains bright 2 Continues to drive leasing spot despite challenging and asset management global economic backdrop 3 Seeks accretive acquisitions – at the right price and right time 15
Slide 16: Contact details
Peachtree, Atlanta, Georgia For enquiries, please contact: Ms Caroline Fong, Head of Investor Relations Direct: (65) 6801 1066 Email: [email protected] MANULIFE US REAL ESTATE INVESTMENT TRUST 8 Cross Street, #16-03 Manulife Tower, Singapore 048424 http://www.manulifeusreit.sg
Slide 17: Appendix: U.S. Outlook and Highlights
Exchange, Jersey City, New Jersey Appendix: U.S. Outlook and Highlights
Slide 18: Benefitting from Growth of World's Largest Economy
Benefitting from Growth of World’s Largest Economy U.S. GDP Growth (YoY %)3 2.9% 3.8% 2.7 2.5 2.4 2.6 2.9 2018 GDP Growth1 Low unemployment2 2.2 2.3 1.8 1.6 1.7 1.6 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 -0.3 -2.8 541k 196k U.S. Unemployment (%)4 Jobs created Non-farm jobs
Slide 19: Favourable U.S. Office Real Estate Outlook
Favourable U.S. Office Real Estate Outlook U.S. Office Employment (YoY %)3 14.7%1 +2.9%1 1.8 2.6 2.3 2.2 2.5 2.2 1.9 1.7 2.1 1Q 20192 Annual2 vacancy steady increase in rents 2009Q1 2010Q1 2011Q1 2012Q1 2013Q1 2014Q1 2015Q1 2016Q1 2017Q1 2018Q1 2019Q1 -2.8 -5.2 +14.0M 15.5M1 1Q 20192 New supply in U
Slide 20: Diversified and Resilient Portfolio with Highest Population and Strongest GDP
Diversified and Resilient Portfolio with Highest Population and Strongest GDP MUST’s Properties Located in Top 10 Largest MSAs out of 383 in the U.S. with High Median Household Income Median 2 Ranked by 3 Ranked by MSA 1 Population GDP Household Income Population GDP U.S. 57,652 327,167,434 - 20,494
Slide 21: Located in Cities with Strong Growth Factors
Located in Cities with Strong Growth Factors and Peachtree, Atlanta, Georgia Live, Work, Play Environment Downtown Los Angeles Irvine Atlanta • Surrounded by entertainment • Considered the “CBD” of Orange • International Gateway - venues such as Staples Center, County Headquarters for 15 Fortune 500
Slide 22: Located in Cities with Strong Growth Factors
Located in Cities with Strong Growth Factors and Peachtree, Atlanta, Georgia Live, Work, Play Environment Secaucus Jersey City Washington, D.C. • Nation’s capital, government hub, • Affordable office and residential • Outstanding location across the heart of CBD alternative to Manhattan attracts Hud
Slide 23: Limited Supply in Our Cities
Limited Supply in Our Cities Majority of our Properties are 5% - 14% Below Market Rents New 12 Month Gross Net Net Properties 1Q 2019 RBA Vacancy Rent Delivery Asking Rent Absorption Delivery Under Class A Market (mil sq ft) (%) Growth1 Year (US$) (‘000 sq ft) (‘000 sq ft) Construction (%) (‘000 sq
Slide 24: Vast Choice of Yield-Accretive Assets in World's Largest Real Estate Market
Vast Choice of Yield-Accretive Assets in World’s Largest Real Estate Market Notes: States MUST is in are highlighted in green Class A cap rates highlighted in blue C: CBD cap rates S: Suburban cap rates Source: CBRE Cap Rate Survey – Second Half 2018 24
Slide 25: Key Investment Criteria and Rationale
Peachtree, Atlanta, Georgia Key Investment Criteria and Rationale Trophy/Class A Assets Provide Strong Income in Upcycles and Remain Resilient during Market Turmoil as compared to Class B & Lower Class Business Park Assets 1 Key Locations and Strong Fundamentals 2 Trophy and Class A Assets Trophy Cl
Slide 26: Appendix: About Manulife US REIT
Phipps, Atlanta, Georgia Appendix: About Manulife US REIT
Slide 27: Reputable Sponsor with Proven Track Record
Reputable Sponsor with Proven Track Record Vertically-Integrated Real Estate Platform: Global Real Estate AUM of US$17.4 b Vancouver Sponsor Calgary Kitchener/Waterloo Edmonton Toronto Canada Ottawa US$6.8 B Montreal AUM AUM Halifax 71% of Real Estate in Office US$794 B U.S. Asia US$8.5 B Others Ret
Slide 28: Portfolio Overview
Portfolio Overview Click to watch videos! Figueroa Michelson Peachtree Plaza Exchange Penn Phipps Washington, Location Los Angeles Irvine Atlanta Secaucus Jersey City Atlanta D.C. Property Type Class A Trophy Class A Class A Class A Class A Trophy Completion Date 1991 2007 1991 1985 1988 1964 2010 L
Slide 29: Tax Advantaged Tax Structure
Peachtree, Atlanta, Georgia Tax Advantaged Tax Structure 1 MUST’s tax advantage For illustrative purposes only • No US corporate taxes (21%) US REIT S-REIT1 Manulife US REIT DPU Yield 3.2%2 7.0% 7.0%3 • No US withholding taxes (30%) U.S. Withholding Taxes (1.0%) - - • No Singapore corporate taxes on
Slide 30: Tax Structure
Tax Structure Predominantly Supported by Four Pillars Sponsor Unitholders Parent US REIT Structure Manulife (9.8% limit)3 i • Tax transparency – Dividends distributed are deductible 0% Tax • Income shielded by interest expense and depreciation US Portfolio Interest Exemption Rule ii • No 30%1 withho
Slide 31: MUST's FY2019 Distribution Yield Remains Attractive
MUST’s FY2019 Distribution Yield Remains Attractive 10.0% 9.0% 7.9% 7.8% 8.0% 7.0% 6.9% 7.0% 6.6% 6.0% 5.2% 4.7% 4.6% 5.0% U.S. Office REIT1: 6.1% 4.0% S-REIT 3.0% Office: 5.4% 2.0% 1.0% 0.0% Manulife US REIT CapitaLand Suntec REIT Keppel REIT OUE Commerical Frasers Keppel-KBS US IREIT Commercial Tr
Slide 32: Additional Disclaimer
Additional Disclaimer CoStarPS does not purport that the CoStarPS Materials herein are comprehensive, and, while they are believed to be accurate, the CoStarPS Materials are not guaranteed to be free from error, omission or misstatement. CoStarPS has no obligation to update any of the CoStarPS Mater