Unitholders of Manulife US Reit (MUST) have approved a major strategic pivot to diversify beyond US office assets into industrial, living sector and retail properties in the US and Canada. The plan, passed with 83 per cent support at a Dec 16 extraordinary general meeting, is intended to reduce the Reit’s exposure to the challenged US office market and support its recovery under a master restructuring agreement (MRA).
The approval unlocks lender concessions that give MUST more time to meet debt repayment obligations. While the Reit has raised US$273.1 million from asset sales, it remains US$55.6 million short of the required repayment due by June 30 next year. Failure to secure approval would have allowed lenders to accelerate repayment of US$559 million in loans, potentially forcing distressed asset sales. The strategy includes up to US$350 million in disposals and US$600 million in acquisitions, with strict valuation, leverage and board-approval safeguards. The manager said its sponsor’s US$19.4 billion global real estate platform provides the expertise to execute the transition. MUST units rose 1.4 per cent before a trading halt.
Meanwhile, S&P Global Ratings has revised the outlook for the Genting group to negative, citing heavy capital expenditure and an aggressive growth strategy that could weaken its credit profile over the next two to three years. The negative outlook applies to Genting, Genting Malaysia, Genting New York and Resorts World Las Vegas.
S&P expects Genting’s capital spending to surge, with capex projected to double to around RM12 billion in 2026 and remain above RM8 billion annually through 2030, outpacing earnings growth. Key investments include the expansion of Genting New York following a full gaming licence, Resorts World Sentosa in Singapore, and Genting Energy’s floating LNG project. As a result, discretionary cash flow is expected to remain negative, with reported debt rising to about RM35 billion by 2028, from RM21 billion in 2024.
The ratings agency also flagged Genting’s lack of a clearly articulated financial policy and risks from opportunistic, debt-funded actions, such as its failed attempt to privatise Genting Malaysia, warning that these could delay deleveraging and undermine credit stability.
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