3Q 2016 Financial Results 7 November 2016
Important Notice This presentation shall be read in conjunction with Manulife US REIT’s financial results announcement dated 7 November 2016 published on SGX Net. This presentation is for information purposes only and does not constitute or form part of an offer, invitation or solicitation of any offer to purchase or subscribe for any securities of Manulife US REIT in Singapore or any other jurisdiction nor should it or any part of it form the basis of, or be relied upon in connection with, any contract or commitment whatsoever. The value of units in Manulife US REIT (“ Units ”) and the income derived from them may fall as well as rise. The Units are not obligations of, deposits in, or guaranteed by the Manager, DBS Trustee Limited (as trustee of Manulife US REIT) or any of their respective affiliates. The past performance of Manulife US REIT is not necessarily indicative of the future performance of Manulife US REIT. This presentation may contain forward-looking statements that involve risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. These forward-looking statements speak only as at the date of this presentation. No assurance can be given that future events will occur, that projections will be achieved, or that assumptions are correct. Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, competition from similar developments, shifts in expected levels of office rental revenue, changes in operating expenses, property expenses, governmental and public policy changes and the continued availability of financing in the amounts and the terms necessary to support future business. Investors are cautioned not to place undue reliance on these forward-looking statements, which are based on current view of management on future events. Holders of Units (“ Unitholders ”) have no right to request that the Manager redeem or purchase their Units while the Units are listed. It is intended that Unitholders may only deal in their Units through trading on Singapore Exchange Securities Trading Limited (the “ SGX-ST ”) . Listing of the Units on the SGX-ST does not guarantee a liquid market for the Units. DBS Bank Ltd. was the Sole Financial Adviser and Issue Manager for the initial public offering of Manulife US Real Estate Investment Trust ( “Offering” ). DBS Bank Ltd., China International Capital Corporation (Singapore) Pte. Limited, Credit Suisse (Singapore) Limited and Deutsche Bank AG, Singapore Branch were the Joint Bookrunners and Underwriters for the Offering. 2
Contents 1 Key Highlights 2 Financial Highlights 3 Portfolio Performance 4 Moving Forward 5 Appendix 3
Overview of Atlanta, Georgia Atlanta, Georgia Michelson, Irvine, California Key Highlights
Key Highlights 1 3Q 2016 1 Growth Exceeded Expectations • NPI of US$17.6 million exceeded forecast by 1.5% 2 • Distributable income of US$12.6 million exceeded forecast by 5.8% 2 • DPU of 2.01 cents exceeded forecast by 5.8% 2 2 Strong Portfolio Performance • High occupancy rate of 97.0% 2 • Long WALE of 6.1 2 years • Positive rental reversions of 8.5% 3 3 Disciplined and Prudent Capital Management • Refinanced US$296.0 million loan at 2.46% p.a, reducing interest expense by US$1.0 million p.a. • Portfolio valuation increased by 4.6% 4 or US$35.8 million 4 to US$813.2 million • Gearing reduced to 34.7% 2 from 36.8% • NAV strengthened by 7.7% 2 to US$0.84 per unit (1) 3Q2016 is defined as the period from 20 May 2016 (IPO date) to 30 Sep 2016 (2) As at 30 Sep 2016 (3) From 1 Jan 2016 to 30 Sep 2016 (4) As compared to acquisition price during IPO which was based on 15 Dec 2015 valuation 5
Figueroa, Los Angeles, California Financial Highlights
DPU Exceeded Forecast by 5.8% Forecast 2 For period 20 May 2016 to Actual Change (US$’000) (US$’000) 30 September 2016 (%) Gross Revenue 1 28,196 28,508 (1.1) 17,603 17,339 Net Property Income 1.5 33,720 9,468 Net Income 256.1 Distributable Income 12,594 11,909 5.8 Distribution per Unit (cents) 2.01 1.90 5.8 (1) The gross revenue was below forecast due to lower recovery revenues. Recovery revenues from tenants are recognised when applicable recoverable property operating expenses are incurred. Since the recoverable property operating expenses were lower than forecast, the recovery revenues were also lower (2) The Prospectus had disclosed an 8-month long profit for the period from 1 May 2016 to 31 Dec 2016. Forecast results for the period from the Listing Date to 30 Sep 2016 were derived by pro-rating the forecast figures and making adjustments, taking into consideration the anticipated lease incentives of Manulife US REIT for the period from 1 May 2016 to 31 Dec 2016 as disclosed in the Prospectus 7 7
NAV Per Unit Increased from US$0.78 1 to US$0.84 As at 30 Sep 2016 (US$’000) Investment Properties 813,200 Total Assets 852,485 294,102 2 Borrowings Total Liabilities 326,801 Net Asset Attributable to Unitholders 525,684 NAV per Unit (US$ per unit) 0.84 (1) Based on 31 Dec 2015 proforma Statement of Financial Position disclosed in the prospectus (2) Net of upfront debt related unamortised transaction costs of US$1.9 million 8
Proactive Capital Management 100% Fixed Rate Loans with No Near-term Refinancing Gearing Ratio Reduced, Increasing Debt Head Room As at 31 Dec 2015 1 As at 30 Sep 2016 Change US$296.0 million Gross Borrowings US$296.0 million NA Gearing Ratio 2 36.8% 34.7% Weighted Average 2.80% p.a. 2.46% p.a. Interest Rate Debt Maturity 2 years 4 years (weighted average) 4.0 times 3 5.2 times 4 Interest Coverage (1) Based on 31 Dec 2015 proforma Statement of Financial Position disclosed in the prospectus of Manulife US REIT dated 12 May 2016 and registered by the Monetary Authority of Singapore on 12 May 2016 (2) Based on gross borrowings as percentage of total assets (3) Based on 2015 proforma income statement as disclosed in the prospectus of Manulife US REIT dated 12 May 2016 and registered by the Monetary Authority of Singapore on 12 May 2016 (4) Based on net income before finance expenses, taxes, fair value gain on properties and amortisation, over finance expenses. Including fair value gain on investment properties, the interest coverage would be 15.9 times during the 20 May 2016 to 30 Sep 2016 reporting period 9
Resilient Portfolio with Visible Growth 99.2% 2 of Leases have Debt Maturity Profile 1 Rental Escalations 0.8% US$ m 15.0% 150 121.0 Michelson 108.0 Figueroa 100 67.0 Peachtree 50 84.2% Annual rental escalations which average around 3% 0 Mid-term or periodic rental increases 2019 2020 2021 Without rental increases (1) No refinancing required until 2019. Excludes Good News Facility of US$31.8 million and US$10.0 million Revolving Credit Facility, both of which have not been drawn down (2) As at 30 Sep 2016 Confidential, Not for Further 10 Distribution
Peachtree, Atlanta, Georgia Portfolio Performance Confidential, Not for Further 11 Distribution
Diversified Portfolio Portfolio Summary as at 30 Sep 2016 1,782,812 sq ft Total NLA Peachtree Peachtree 22.4% 24.4% Figueroa WALE by (NLA) 6.1 years Figueroa 33.0% 37.2% US$813.2m US$48.6m Portfolio Occupancy 97.0 % PY2017 NPI Valuation 100% freehold Land Tenure Michelson Michelson 42.6% 40.4% No. of Tenants 70 12
Strategically Located in Key U.S. Cities Portfolio Markets Progressing Steadily Rental Cycle, U.S 3 Key Cities Rental Cycle, Global Key Cities 1,2 London Denver Jakarta Houston Kuala Lumpur Seoul Dallas Singapore San Francisco Beijing Tokyo Los Angeles Bangkok Orange County Hong Kong Peaking Falling Peaking Falling Atlanta Market Market Market Market United Chicago States New York Bottoming Rising Bottoming Boston Rising Market Market Market Market Sydney Chicago Orlando Moscow Mumbai Philadelphia Washington D.C. (1) Source: JLL as at 3Q 2016. Retrieved from http://www.jll.eu/emea/en-gb/research/office/office-property-clock (2) Source: JLL as at 2Q 2016. Retrieved from http://www.ap.jll.com/asia-pacific/en-gb/research/property-clock (3) Source: JLL as at 3Q 2016. Retrieved from http://www.us.jll.com/united-states/en-us/research/property-clocks/office-property-clock 13
High Occupancy Rates Historical Occupancy Rates 1 as at 30 Sep 2016 (%) 97.0 96.5 95.0 94.7 92.8 91.5 2011 2012 2013 2014 2015 3Q 2016 (1) Reflects committed leases as at each date 14
Favourable Lease Profile with WALE of 6.1 Years Minimal Near Term Lease Expires in the Next 2 Years Lease Expiry Profile as at 30 Sep 2016 (%) 68.1 64.7 14.4 10.9 9.4 8.6 5.1 5.2 5.3 4.7 1.7 1.9 2017 2018 2019 2020 2021 2022 and beyond Cash Rental Income Net Lettable Area 15
Positive 8.5% Rental Reversion Across Portfolio Rental Reversions (% Increased) based on New Leases Signed from 1 Jan 2016 to 30 Sep 2016 Property Rental Reversion Net Lettable Area Figueroa 9.7% 72,014 sq ft Michelson 9.9% 3,889 sq ft Peachtree 4.8% 27,870 sq ft Total 8.5% 103,773 sq ft Confidential, Not for Further 16 Distribution
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