Detailed Report: Manulife US REIT Extraordinary General Meeting (EGM) — Major Strategic Shifts Approved

Overview

Manulife US Real Estate Investment Trust (“Manulife US REIT” or “MUST”) held its Extraordinary General Meeting (EGM) on 16 December 2025, at the Stephen Riady Auditorium, Singapore. The meeting was attended by the board, management, auditors, legal counsel, trustee representatives, and unitholders. The EGM was chaired by Mr. Marc Feliciano, with key participation from the CEO & CIO, Mr. John Casasante, and CFO, Mr. Mushtaque Ali.

Key Resolutions Passed: Transformational Mandates

• Disposition Mandate Approved: Unitholders voted overwhelmingly (83.10% in favor) to authorize the Manager to dispose of existing properties, as outlined in the “Growth and Value Up Plan.” This broad mandate covers property sales from 1 January 2026 to 30 April 2027 and is designed to reduce debt and rebalance the portfolio.
• Acquisition Mandate Approved: Similarly, 83.01% of votes supported the Manager’s authority to acquire new properties and investments under a broadened investment mandate. This will allow MUST to diversify into industrial, living, and retail asset classes, away from its traditional office focus.
• Resolutions Are Inter-Conditional: Both resolutions are linked; failure to approve one would have voided the other, underscoring the strategic overhaul being undertaken.

Price-Sensitive Issues & Investor Impact

• Portfolio Transformation: The approved mandates allow for the sale of underperforming office assets and the acquisition of potentially higher-yielding industrial, living, and retail properties. This shift is in response to persistent weakness in the US office sector and aims to create a more resilient, diversified portfolio.
• Debt Reduction & Financial Stability:
  • The REIT has repaid US\$317 million of debt recently, with net disposal proceeds exceeding US\$270 million. The current debt stands at approximately US\$690 million, down from US\$1.02 billion.
  • The minimum sale target of US\$329 million must be met by 30 June 2026, with a current shortfall of US\$56 million. Achieving this is critical to avoid default under the Master Restructuring Agreement.
  • The REIT holds US\$45 million in cash (as of 30 September 2025), sufficient for operating and capital expenditure needs but not for further debt repayment.
• Strategic Debt Management: Repayment of the Sponsor-Lender Loan (US\$137 million at an effective interest rate of ~10%) is restricted until other bank facilities are repaid and certain “Reinstatement Conditions” are met. This could impact interest costs and refinancing flexibility.
• Manager Fees: Disposition fees remain at 0.5% of net proceeds, and acquisition fees at 1.0% of acquisition price. No fee waivers were granted, which may affect net returns.
• Distribution Suspension & Resumption:
  • Distributions remain suspended until minimum sale targets and reinstatement conditions are met. The REIT plans to resume distributions at a sustainable level once these hurdles are cleared, potentially increasing the attractiveness of the REIT.
  • The shift to less capital-intensive assets (industrial, living) is expected to improve cash flow and allow for more consistent distributions.
• Asset Sale & Acquisition Restrictions:
  • Dispositions must be at no less than 90% of latest valuations, acquisitions at no more than 110%. These regulatory requirements could limit flexibility in execution and affect pricing outcomes.
• Market Outlook & Execution Risks:
  • The US office sector remains weak, with subindices showing ongoing declines but signs of stabilization. The REIT’s strategy is to recycle capital into higher-performing assets and avoid liquidation risks.
  • There are risks associated with the timing of asset sales, market recovery, and execution of new acquisitions. The management emphasized ongoing market monitoring and flexibility in execution.

Detailed Management Responses to Investor Questions

• Loan Repayment Priorities: Sponsor-Lender Loan is last in line for repayment due to lender requirements for alignment of interests. Review of debt structure will occur once reinstatement conditions are met.
• Potential Asset Repositioning: While repurposing office assets (e.g., to apartments, data centers) is being explored, high costs and market risks make these options challenging. Temporary leasing to alternative tenants is considered, but not a long-term solution.
• Debt Maturity Management: All 2025 loans have been repaid; next focus is on July 2026 maturities (US\$35.6 million), expected to be covered by asset disposals.
• Pro Forma Financial Effects: Disposition mandate alone could lower leverage to ~42%. Proceeds from asset sales may fund up to US\$600 million in acquisitions, improving portfolio scale and cash flow. Actual improvement to bottom line is dependent on timing and market conditions.
• Contingency Planning: Management is prioritizing meeting the minimum sale target before considering further contingencies. Disposition challenges are greater than acquisition challenges due to market conditions.

Investor Takeaways

• The EGM marks a pivotal strategic shift for Manulife US REIT, with the potential to reshape its portfolio, reduce debt, and eventually resume distributions.
• Investors should monitor progress toward the minimum sale target, debt reduction, and asset acquisitions, as successful execution could materially enhance value and share price.
• Risks remain around market recovery, execution timing, regulatory requirements, and ongoing suspension of distributions.

Disclaimer

This article is intended for informational purposes only and does not constitute investment advice. The information was compiled from official minutes of Manulife US REIT’s Extraordinary General Meeting and related investor Q&A. Investors should consider their own financial circumstances and perform due diligence before making investment decisions. Past performance is not indicative of future results.

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