Manulife US REIT :-
America&rsquo s strengthening office market makes Manulife US REIT a great &lsquo buy&rsquo
By: Michelle Zhu
SINGAPORE (Nov 9): DBS Vickers Securities has maintained its &ldquo buy&rdquo call on Manulife US REIT with an unchanged target price of 93 US cents ($1.29).
This comes after the pure-play US REIT posted a maiden distribution per unit (DPU) of 2.01 US cents, hence exceeding its initial public offering (IPO) profit forecast by 5.8%.
(See also: Manulife US REIT reports maiden DPU of 2.01 US cents, exceeds IPO profit forecast by 5.8%)
In a Tuesday report, lead analyst Mervyn Song says the latest set of results translates to an 8% DPu growth in FY17, which is one of the highest among REITs in Singapore.
Highlighting the REIT as &ldquo well-placed to execute on DPU-accretive acquisitions&rdquo , the analyst says he expects any acquisition to diversify its geographic earnings base and tenant concentration.
Furthermore, a recent visit to the REIT&rsquo s properties in the US, combined with meetings with various property brokers, has led Song to conclude that the US office market fundamentals &ldquo remain firm&rdquo .
&ldquo We believe that MUST' s properties in Midtown Atlanta and Downtown Los Angeles submarkets will continue to see steadily increasing rents, continued expansionary tenant demand, increased employment opportunities and also a lack of competitive new supply,&rdquo he comments.
&ldquo We continue to like Manulife US REIT for its exposure to the growing US office market and attractive 7.2% FY17F yield.&rdquo
Units of Manulife US REIT closed at 84 cents.