Manulife US Reit to sell Phipps Tower to sponsor

SINGAPORE – Manulife US Real Estate Investment Trust (Manulife US Reit) has entered into a letter of intent to sell Phipps Tower in Atlanta, Georgia, to its sponsor The Manufacturers Life Insurance Company.

The purchase consideration should be no more than the average of two independent valuations commissioned by the Reit’s manager and its trustee, DBS Trustee.

On Wednesday, the Reit manager said its proposed divestment comes as part of its ongoing strategic review to “enhance unitholder value”. It intends to redeploy proceeds into debt repayment or capital expenditure such as tenant incentives.

The Reit’s manager said it aims to enter into a definitive agreement for Phipps Tower’s disposal by June 30, 2023. It will also waive the disposal fee.

The Reit acquired Phipps Tower from its sponsor in 2018 for US$205 million (S$276 million). The property was valued at US$210 million as at Dec 31, 2022

Additionally, the Reit manager is considering proposals from other prospective partners for its potential sale. This comes as the exclusivity period with Mirae Asset Global Investments has lapsed.

Apart from the Reit’s divestment of its Oregon property, Tanasbourne, and its proposed divestment of Phipps Tower, its manager said it is also exploring other fundraising options. These include further asset dispositions to reduce gearing.

Proceeds from both divestments will be prioritised towards near-term loan maturities and essential capital expenditure, it added.

Units of Manulife US Reit shot up 24.1 per cent to 15.5 US cents on Tuesday. They were trading down 6.3 per cent at 16.2 US Cents at 1.22pm on Wednesday. THE BUSINESS TIMES



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