Manulife US REIT FY2025: Revenue -32% to US$113.9M on Disposals, Same-Store Val Stabilises at US$913.8M, Growth & Value Up Plan Approved, 9 New Human Capital Profiles

Manulife US Real Estate Investment Trust (SGX: BTOU; MUST) released its FY2025 Annual Report covering the year ended 31 December 2025. Revenue fell 32% to US$113.9M and NPI declined 33.4% to US$53.2M, primarily due to the divestment of three assets (Capitol Oct 2024, Plaza Feb 2025, Peachtree May 2025) — not underlying portfolio deterioration. The more constructive story is in the same-store numbers: portfolio valuation stabilised at a -1.6% decline to US$913.8M, four properties saw valuation gains, and the Manager secured the Growth and Value Up Plan giving MUST a broadened mandate to diversify beyond US office.

• ▸Gross Revenue: US$113.9M (FY2024: US$167.6M; -32.0%) — decline driven entirely by divestments (Capitol, Plaza, Peachtree) plus vacancy headwinds at Diablo and Figueroa.
• ▸Net Property Income: US$53.2M (FY2024: US$79.9M; -33.4%). Same-store NPI: US$49.3M (-13.7% YoY excluding divested assets).
• ▸Net loss: US$87.7M (FY2024: US$178.0M loss; improved 50.8%) — FV loss on investment properties US$83.5M (FY2024: US$187.9M; much smaller).
• ▸Income available for distribution: US$25.5M (FY2024: US$38.3M; -33.2%). DI per unit: US1.44¢ (FY2024: US2.15¢).
• ▸DPU: ZERO — distributions suspended under MRA; extended under MRA Concessions until Reinstatement Conditions met (leverage ≤50%, ICR ≥1.5x for one full quarter).
• ▸NAV/unit: US$0.19 (FY2024: US$0.23; -17.4%).
• ▸Net assets: US$343.0M (FY2024: US$430.6M).
• ▸Total borrowings: US$559.0M (FY2024: US$745.0M; -US$186M repaid in FY2025 from divestment proceeds).
• ▸Aggregate leverage: 58.4% (FY2024: 60.8%; improved — MRA waiver still applies as decline due to valuation not new borrowings).
• ▸ICR: 1.7x (FY2024: 1.7x; stable).
• ▸WACD: 4.58% incl. Sponsor-lender exit premium 5.25% (FY2024: 5.03%).
• ▸Finance costs: US$34.6M (FY2024: US$48.1M; -28.0% — debt repayment benefit flowing through).
• ▸Unit price FY2025: open US$0.089, close US$0.071, high US$0.102 (Jan 2025), low US$0.053 (Apr 2025). Market cap US$126.1M (FY2024: US$158.1M).

• ▸Since the Recapitalisation Plan was announced in late 2023, MUST has divested three assets and repaid ~US$317M of debt:
• ▸Capitol (Washington D.C.) — DIVESTED Oct 2024: net proceeds US$110M.
• ▸Plaza (Secaucus, NJ) — DIVESTED 25 Feb 2025: net proceeds US$40M; proceeds fully used to repay 2026 debt.
• ▸Peachtree (Atlanta Midtown) — DIVESTED 27 May 2025: net proceeds US$123.6M (buyer: SSC VII Investor LLC; valuation at disposal US$133.4M — sold at ~9.3% discount to valuation).

Cumulative net proceeds raised: US$273.1M = ~83% of US$328.7M Minimum Sale Target under the MRA. Remaining gap: US$55.6M.

Debt outstanding as at 31 Dec 2025: US$559.0M. Next maturity: US$35.6M due Jul 2026 — to be repaid from further divestment proceeds. Remaining debt matures 2027–2029.

• ▸MRA CONCESSIONS (23 Dec 2025):
• ▸(1) Disposal deadline extended from 31 Dec 2025 to 30 Jun 2026.
• ▸(2) Covenant relaxation extended: Unencumbered Gearing ≤80% (vs 60%) to 30 Jun 2026; Bank ICR ≥1.5x (vs 2.0x) to 31 Dec 2026.

GROWTH AND VALUE UP PLAN (Dec 2025):

• ▸Unitholders approved two mandates at the Dec 2025 EGM:
• ▸Disposition Mandate: Manager authorised to sell up to 3 existing properties raising ≤US$350M by April 2027. Proceeds allocated to portfolio revitalisation, debt repayment, and funding Capex/TIs/leasing costs.
• ▸Acquisition Mandate: Manager may acquire properties/investments outside US office, cap US$600M, by April 2027. Target sectors: industrial, living (multifamily), retail in US and Canada — offering higher yields, lower Capex, and more resilient growth than office.

Figueroa sale announced post-period (30 Mar 2026): Manager announced proposed divestment of Figueroa (Downtown LA) — would bring cumulative proceeds to ~US$328.7M+ and effectively complete the Minimum Sale Target.

PORTFOLIO — VALUATION AND OCCUPANCY (31 DEC 2025)

Same-store portfolio valuation: US$913.8M (FY2024: US$928.9M; -1.6%). Excluding Figueroa (held-for-sale): US$815.7M vs US$811.9M a year ago (+0.5% — effectively flat, a positive stabilisation signal).

Property-by-property FY2025 vs FY2024:

Phipps (Atlanta Buckhead) — Tranche 3: Val US$192.5M (FY2024: US$180.2M; +6.8% ↑); Occ 83.7% (FY2024: 80.4%; +3.3pp ✅). New leases at TIs significantly below market. WALE 7.6 yrs. Gross Rev US$17.5M; NPI US$10.2M.

Michelson (Irvine, CA) — Tranche 3: Val US$230.4M (FY2024: US$219.5M; +5.0% ↑) — highest valuation in portfolio. Occ 81.4% (flat). Hyundai Capital anchor lease stable. WALE 3.8 yrs. Gross Rev US$23.8M; NPI US$13.6M (+7.9% NPI improvement on lower property tax).

Penn (Washington D.C.) — Tranche 1: Val US$79.8M (FY2024: US$79.1M; +0.9% ↑). Occ 84.9% (FY2024: 90.0%; -5.1pp). UN Foundation and US Treasury remain dominant tenants (47.2% of GRI each). ⚠️ 47.2% of leases expire 2027 — key renewal watch. WALE 2.3 yrs. Gross Rev US$15.5M; NPI US$8.5M (stable).

Centerpointe (Fairfax, VA) — Tranche 1: Val US$76.7M (FY2024: US$75.9M; +1.1% ↑). Occ 75.1% (FY2024: 68.2%; +6.9pp ✅ — occupancy recovery). WALE 5.0 yrs. Gross Rev US$9.8M; NPI US$4.9M.

Exchange (Jersey City, NJ) — Tranche 2: Val US$191.4M (FY2024: US$211.6M; -9.5% ↓ — lack of new leasing + limited comps). Occ 72.5% (FY2024: 73.8%; -1.3pp). Strategic FY2025 leases include 7+ yr renewal at TIs 50%+ below market and full-floor movie studio short-term. WALE 3.7 yrs. Gross Rev US$24.8M; NPI US$10.5M.

Diablo (Tempe, AZ) — Tranche 1: Val US$44.9M (FY2024: US$45.6M; -1.5% ↓). ⚠️ OCC COLLAPSED: 37.8% (FY2024: 98.2%; -60.4pp) — the previously flagged 72% of leases expiring 2025 crystallised as vacates. New top tenants: Smart Embedded Computing 27.8%, Alchera Inc 21.2%, Semiconductor Components Industries 19.9%. WALE 3.3 yrs (extended from 1.6 yrs as remaining tenants have longer leases). Manager exploring data centre / industrial conversion options. Gross Rev US$5.5M; NPI US$1.1M (from US$9.3M / US$6.8M FY2024).

Figueroa (Downtown LA) — Held-for-sale: Val US$98.1M (FY2024: US$117.0M; -16.2% ↓ — reclassified to held-for-sale at estimated net consideration). Occ 45.6% (FY2024: 46.6%; -1.0pp). FY2025 strategic lease: ~40,000 sqft to Banc of California at above-market rent (LA 2028 Olympics signage angle). Sale announced 30 Mar 2026; expected completion 2Q2026. Gross Rev US$11.7M; NPI US$0.5M.

• ▸DIVESTED IN FY2025:
• ▸Plaza (Secaucus, NJ): DIVESTED 25 Feb 2025. Net proceeds US$40M (valuation at disposal US$43.7M; -8.4% to val).
• ▸Peachtree (Atlanta Midtown): DIVESTED 27 May 2025. Net proceeds US$123.6M (valuation at disposal US$133.4M; -7.3% to val).

~407,000 sqft of leases executed (FY2024: 611,000 sqft). Average rent reversion: -6.1% (FY2024: -7.4% — improving trend). Average TI allowance ~US$43 psf for leases signed with TIs — approximately 30% below prevailing market levels, reflecting the Manager's capital-efficient leasing strategy. Lease expiry profile as at 31 Dec 2025: 4.4% expiring 2026 (FY2024: 2025 had been the near-term watch).

• ▸Exact CEO remuneration — John Casasante:
• ▸FY2025: S$1,008,379 total (Base 41.2% = S$415,180 / Bonus 56.4% = S$568,412 / Benefits 2.5% = S$24,787 / RSUs nil). First full year; FY2024 partial-year (8 Apr–31 Dec) was S$341,869 (base-heavy, no bonus). YoY: +194.9% — reflects full year vs ~9 months partial, and substantial bonus now added reflecting FY2025 performance.

• ▸Non-Executive Directors (100% fees; paid by Manager not MUST):
• ▸Koh Cher Chiew Francis (Lead ID / ARC Chair): S$139,500 (FY2024: S$133,731; +4.3% YoY).
• ▸Karen Tay Koh (NRC Chair): S$123,500 (FY2024: S$117,595; +5.0% YoY).
• ▸Veronica Julia McCann (ARC member): S$99,500 (FY2024: S$105,269; -5.5% YoY — stepped down ARC Chair mid-2024, now member only).
• ▸Choo Kian Koon (NRC member): S$94,500 (FY2024: S$98,345; -3.9% YoY — stepped down NRC Chair May 2024, now member only).
• ▸Marc Feliciano (Chairman): Nil both years — Sponsor employee.
• ▸Total board fees FY2025: S$457,000 (FY2024: S$454,940; +0.5% — essentially flat).

• ▸KMP bands (excluding CEO):
• ▸Mushtaque Ali (CFO): S$500,000–S$750,000 FY2025 (FY2024: S$250,000–S$500,000) — ⬆️ band upgrade; first full year with full bonus (24%) and MFC RSU vesting (10%).
• ▸Daphne Chua (CCO & Co-Sec): S$500,000–S$750,000 FY2025 (FY2024: S$250,000–S$500,000) — ⬆️ band upgrade.
• ▸Choong Chia Yee (Head Finance): S$250,000–S$500,000 FY2025 (FY2024: same — unchanged band).
• ▸Wylyn Liu (Head IR): S$250,000–S$500,000 FY2025 (appointed 1 Jan 2025; not in FY2024 disclosure).
• ▸Aggregate KMP remuneration (excl. CEO): S$1,975,001 FY2025 (FY2024: S$1,209,209; +63.4% YoY — driven by Ali and Chua band upgrades, full-year contributions, and Liu addition).

MUST's FY2025 story has two layers. The headline numbers (revenue -32%, NPI -33.4%, DPU still zero) look terrible in isolation but are largely the arithmetic of three asset disposals — not a deterioration of the operating portfolio. Strip out the divested assets, and same-store NPI fell a more modest -13.7%, and same-store valuation barely moved (+0.5% excl. Figueroa). The constructive developments are real: four of seven properties recorded valuation gains, Phipps and Michelson are performing strongly, Centerpointe occupancy recovered meaningfully (+6.9pp), and debt fell US$186M in the year alone.

The critical remaining item is closing the US$55.6M gap to the Minimum Sale Target — the Figueroa sale announced post-period should achieve this. Once the gap is closed and the MRA can be exited, the Growth and Value Up Plan becomes the next chapter: selling assets from the weaker end of the portfolio (Tranche 1) and redeploying into higher-yielding industrial/living/retail, which should materially improve the income profile and ultimately enable distribution resumption.

The main risks: Diablo's near-total vacancy (37.8%) makes it a drag on income and potentially difficult to sell or lease up; Exchange valuation continues to slide (-9.5%) on weak leasing; and the Reinstatement Conditions for distribution resumption (leverage ≤50%, ICR ≥1.5x) remain some distance away given aggregate leverage of 58.4%. The MRA extension to June 2026 buys time but also signals the runway is not unlimited.