Manulife US Reit makes major move for US$332m buy

Manulife US Real Estate Investment Trust will undertake a rights issue to raise US$208 million (S$283 million) to partly fund its largest acquisition to date - an office building in New Jersey in the US.

The Singapore-listed Reit disclosed last Saturday that it had agreed to buy 10 Exchange Place, a 30-storey class A office building in Jersey City, from John Hancock Life Insurance Company for US$313.2 million.

Manulife US Reit, the first pure-play US office Reit listed in Asia, has proposed to undertake an underwritten and renounceable rights issue of 299.3 million new units at the issue price of 69.5 US cents per unit to raise gross proceeds of some US$208 million.

The estimated total cost of the acquisition, including the purchase price and other fees, is about US$332 million.

This will be funded through debt financing and proceeds from the rights issue.

The manager's acquisition fee will be paid in the form of units of Manulife US Reit.

According to independent market research consultant Cushman & Wakefield, the Hudson Waterfront District is considered to be the strongest office market within northern New Jersey, having historically outperformed the greater regional market in terms of occupancy levels and rental rates.

With a net lettable area (NLA) of about 730,598 sq ft, 10 Exchange Place will be Manulife US Reit's largest acquisition.

As at July 31, the property was 93.1 per cent leased with a weighted lease expiry of 5.7 years by NLA.

The purchase price of US$313.2 million represents a discount on the property's appraised value by two independent valuers.

Upon completion of the acquisition, Manulife US Reit's aggregate appraised value and NLA will be enlarged by 34.2 per cent and 32.5 per cent, respectively.


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