Manulife REIT's distributable income in the second half of the year declines by 31%, with leverage still above regulatory requirements | Lianhe Zaobao

As of the end of December 2025, the total leverage ratio of Manulife US REIT is 58%, up from 56.2% in the third quarter, still not meeting the regulatory requirement of 50% or below to exit the Master Restructuring Agreement (MRA). The trust suspended distributions starting in 2023. During a media briefing on Thursday (March 19), the trust indicated that it would reassess whether to resume sustainable distributions once the requirements of the restructuring agreement are met, and after reducing the overall leverage ratio to 40% or below through acquisitions with lower leverage, thereby improving cash flow and credit conditions. The performance released after the market closed on Wednesday (18th) showed that distributable income for the second half of the year fell by 31.1% year-on-year to USD 10.62 million, and net real estate income decreased by 37.9% year-on-year to USD 23.01 million. The net losses for the second half and the full fiscal year 2025 are USD 32.3 million and USD 80.9 million, respectively, representing declines of 83.3% and 54.6%. The trust stated in its announcement that the narrowing of net losses in the second half was mainly due to a decrease in net losses from the fair value of real estate investments and derivative financial instruments, as well as a reduction in basic management fees and financing costs, although some of the decline was offset by decreases in net real estate income and interest income. Distributable income and net real estate income for the full year also fell by 33.2% and 33.4%, respectively. Further Reading Manulife US REIT's net losses narrow, distributable income per unit is 0.6 cents Manulife US REIT's asset disposal deadline extended, distributions suspended until the end of 2026 The trust management also emphasized that the focus for 2026 remains on achieving a minimum asset disposal target of USD 56 million (approximately SGD 71.84 million) by the end of June, reducing leverage, and enhancing cash flow and credit status through diversified investments in industrial, residential, and retail assets. Currently negotiating the sale of the Class A office building Figueroa in Los Angeles with an asking price of USD 92.5 million The trust also revealed that it is currently negotiating the sale of the Class A office building Figueroa located in Los Angeles, USA, with an asking price of USD 92.5 million, which is about 10% lower than the independent valuation of USD 98.1 million at the end of last year. Management emphasized that this aligns with the fair market value and is not a "fire sale" of assets, with each sale requiring unanimous approval from all directors. The conditions for the sale stipulate that the selling price of each property must not be lower than 90% of the latest independent valuation, and the valuation date must not be earlier than two months before the signing of the sale agreement. As of the end of last year, the real estate portfolio valuation under Manulife Reit USD slightly declined by 1.6% to USD 913.8 million compared to the previous fiscal year. The trust's stock price closed at USD 0.06 on Thursday, with no change