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MANULIFE US REAL ESTATE INVESTMENT TRUST

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Asset Acquisitions and Disposals::Acquisitions in Phoenix, Arizona and Portland, Oregon in the the US

11/30/2021 | 04:11am EDT

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, EUROPEAN ECONOMIC AREA, THE UNITED KINGDOM, CANADA, JAPAN OR AUSTRALIA.

This announcement is not for publication or distribution, directly or indirectly, in or into the United States, European Economic Area, the United Kingdom, Canada, Japan or Australia. This announcement is not an offer of securities for sale in the United States, European Economic Area, the United Kingdom, Canada, Japan, Australia or any other jurisdiction. The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements under the Securities Act and in compliance with any applicable state securities laws. There will be no public offering of securities of Manulife US REIT (as defined herein) in the United States.

MANULIFE US REAL ESTATE INVESTMENT TRUST

(a real estate investment trust constituted on 27 March 2015 under the laws of the Republic of Singapore)

ENTRY INTO HIGH-GROWTH MARKETS WITH ACQUISITIONS IN

PHOENIX, ARIZONA AND PORTLAND, OREGON IN THE UNITED STATES

1. INTRODUCTION

Manulife US Real Estate Management Pte. Ltd., in its capacity as manager of Manulife US Real Estate Investment Trust ("Manulife US REIT", and the manager of Manulife US REIT, the "Manager"), is pleased to announce that Manulife US REIT, through its indirect wholly owned subsidiary, has today entered into:

  1. a purchase agreement (the "Diablo Purchase Agreement") with Tempe Diablo LLC (the "Diablo Vendor") to acquire the property known as Diablo Technology Park located at 2900 South Diablo Way, Tempe, Arizona ("Diablo Technology Park") for a purchase consideration of US$61.75 million;
  2. a purchase agreement (the "Park Place Purchase Agreement") with CAZ 5 DE LLC (the "Park Place Vendor") to acquire the property known as Park Place located at 1650 & 1700 South Price Road, Chandler, Arizona ("Park Place") for a purchase consideration of US$106.0 million; and
  3. a purchase agreement (the "Tanasbourne Purchase Agreement") with Tanasbourne Property, LLC (the "Tanasbourne Vendor") to acquire the property known as Tanasbourne Commerce Center located at 3188 & 3175 NE Aloclek Drive and 3300 NE 83rd Avenue, Hillsboro, Oregon ("Tanasbourne Commerce Center",

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together with Diablo Technology Park and Park Place, the "Properties" and each a "Property") for a purchase consideration of US$33.85 million.

The Diablo Vendor, the Park Place Vendor and the Tanasbourne Vendor are unrelated third- party vendors.

2. INFORMATION ON THE PROPERTIES

2.1 Diablo Technology Park

Diablo Technology Park is a five-building collaborative office campus with an aggregate net lettable area ("NLA") of 354,434 square feet ("sq ft") located in Tempe, a submarket of Phoenix, Arizona. Diablo Technology Park is a multi-tenant office park catering to the expanding creative, technology, education and healthcare tenants in the broader Phoenix market. The property features large, flexible floorplates, an on-site café and fitness centre, indoor and outdoor amenity areas, ample parking, and excellent visibility and frontage along the I-10 freeway; potential data centre capabilities exist due to an abundance of power and cooling capacity.

Purchase Consideration (US$ million)

61.75

Valuation (US$ million)(1)

65.0

NLA (sq ft)

354,434

Number of Storeys

Building A & B - 1

Building C & D - 2

Building E - 1

Land Tenure

Freehold

Year Built

1980-1998

Year of Last Refurbishment Completion

2017-2018

Committed Occupancy(2)

85.7%

Number of Tenants(2)

7

Weighted Average Lease Expiry ("WALE") by NLA(2))

4.6 years

Notes:

  1. Based on valuation as at 9 November 2021 by Jones Lang LaSalle Americas, Inc., an independent valuer.
  2. Based on information as at 23 November 2021, being the Latest Practicable Date (Singapore Time).

2.2 Park Place

Park Place is a pre-eminent office campus consisting of two class A office buildings with an aggregate NLA of 274,700 sq ft located in Chandler, a submarket of Phoenix, Arizona. Having been completed in 2019, Park Place is a new 100%-leased property occupied by three major corporate credit tenants including Voya Services Company (subsidiary of Fortune 500 Voya Financial, NYSE: VOYA), Toyota Motor Credit Corporation (subsidiary of Fortune 500 Toyota Motor Corporation, NYSE: TM) and Fresenius Management Services (subsidiary of Global 500 Fresenius Medical Care AG & Co, NYSE: FMS). The property is built to a very high standard and includes features and amenities such as an attractive

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window line offering abundant natural light, high finished ceiling heights, an efficient/flexible floor plate that can accommodate different tenant requirements, a three-storey lobby atrium, a conference centre, courtyard, outdoor gathering area and adequate parking, including a one-storey covered parking garage, canopy and solar canopy stalls. The property is part of a broader, 1 million sq ft, mixed-use development providing a campus environment in a desirable area suitable for large single-tenant use. The neighbouring area has become a corporate hub with high quality tenants such as Bank of America, Wells Fargo, Northrup Grumman, Intel, PayPal, Walgreens and others.

Purchase Consideration (US$ million)

106.0

Valuation (US$ million)(1)

106.9

NLA (sq ft)

274,700

Number of Storeys

3

Land Tenure

Freehold

Year Built

2019

Committed Occupancy(2)

100.0%

Number of Tenants(2)

3

WALE by NLA(2)

7.9 years

Notes:

  1. Based on valuation as at 9 November 2021 by Jones Lang LaSalle Americas, Inc., an independent valuer.
  2. Based on information as at 23 November 2021, being the Latest Practicable Date (Singapore Time).

2.3 Tanasbourne Commerce Center

Tanasbourne Commerce Center is a three-building office campus located in Hillsboro, a submarket of Portland, the largest city in Oregon. Each building is 100% leased to single major, credit tenant with science, technology, engineering, and mathematics ("STEM") or technology, advertising, media and information ("TAMI") roots: Nike, Kaiser Permanente and Tokyo Electron.

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Purchase Consideration (US$ million)

33.85

Valuation (US$ million)(1)

34.4

NLA (sq ft)

132,851

Number of Storeys

Building A - 2

Building C - 1

Building D - 1

Land Tenure

Freehold

Year Built

Building A - 1995

Building C - 1986

Building D - 1986

Year of Last Refurbishment Completion

Building A - 2017

Building C - 2020

Building D - 2015

Committed Occupancy(2)

100.0%

Number of Tenants(2)

3

WALE by NLA(2)

4.9 years

Notes:

  1. Based on valuation as at 1 November 2021 by Jones Lang LaSalle Americas, Inc., an independent valuer.
  2. Based on information as at 23 November 2021, being the Latest Practicable Date (Singapore Time).

3. DETAILS OF THE ACQUISITIONS

3.1 Purchase Consideration and Valuation

The aggregate purchase consideration payable for the acquisition of the Properties (the "Acquisitions") is US$201.6 million (the "Aggregate Purchase Consideration"), comprising US$61.75 million for Diablo Technology Park, US$106.0 million for Park Place and US$33.85 million for Tanasbourne Commerce Center (each a "Purchase Consideration"). The Purchase Consideration was each negotiated on a willing-buyer and willing-seller basis after taking into account the independent valuation of the respective Property by Jones Lang LaSalle Americas, Inc., the independent valuer (the "Valuer") commissioned by the Manager and the Trustee to value the Properties.

The independent valuation conducted by the Valuer concluded a market value for Diablo Technology Park of US$65.0 million as of 9 November 2021, based on the income capitalisation approach and the sales comparison approach. The income capitalisation approach consisted of a discounted cash flow analysis and a direct capitalisation method. The Purchase Consideration is 5.0% lower than the Valuer's valuation.

The independent valuation conducted by the Valuer concluded a market value for Park Place of US$106.9 million as of 9 November 2021, based on the income capitalisation approach and the sales comparison approach. The income capitalisation approach consisted of a discounted cash flow analysis and a direct capitalisation method. The Purchase Consideration is 0.8% lower than the Valuer's valuation.

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The independent valuation conducted by the Valuer concluded a market value for Tanasbourne Commerce Center of US$34.4 million as of 1 November 2021, based on the income capitalisation approach and the sales comparison approach. The income capitalisation approach consisted of a discounted cash flow analysis and a direct capitalisation method. The Purchase Consideration is 1.6% lower than the Valuer's valuation.

(US$ m)

5.0%

65.0

61.75

Purchase Independent Consideration Valuation

Diablo Technology Park

0.8%

106.9

106.0

Purchase Independent Consideration Valuation

Park Place

1.6%

34.4

33.85

Purchase Independent Consideration Valuation

Tanasbourne Commerce Center

  1. Total Acquisition Cost
    The total cost of the Acquisitions (the "Total Acquisition Cost") is currently estimated to be approximately US$207.7 million, comprising:
    1. the Aggregate Purchase Consideration of US$201.6 million;
    2. an acquisition fee of approximately US$2.0 million (the "Acquisition Fee") payable to the Manager pursuant to the trust deed dated 27 March 2015 constituting Manulife US REIT (as amended and restated), which the Manager has elected to be paid in cash; and
    3. the estimated professional and other transaction fees and expenses of approximately US$4.1 million incurred or to be incurred by Manulife US REIT in connection with the Acquisitions.
  2. Purchase Agreements
    1. Diablo Purchase Agreement
      The principal terms of the Diablo Purchase Agreement include the following:
      • customary provisions relating to the acquisition, including limited representations and warranties;
      • the conditions precedent to the buyer's obligation to proceed with the closing include that (i) all representations of Diablo Vendor contained in the Diablo Purchase Agreement are true and correct in all material respects at the time of the closing date; (ii) the title company shall be unconditionally committed to issue title policy to buyer; (iii) as of the closing date, Diablo Vendor shall have tendered all deliveries to be made by it at the closing;

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This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Manulife US Real Estate Investment Trust published this content on 30 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 November 2021 09:10:05 UTC.


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