Manulife US Real Estate Investment Trust (MUST) slipped into a softer year for the 12 months ended 31 Dec 2025, with income available for distribution falling 33.2% year-on-year (YoY) to US$25.54 million as higher vacancies at key assets and the absence of contributions from recently divested properties outweighed cost savings.
MUST’s gross revenue declined 32.0% YoY to US$113.91 million, while net property income (NPI) retreated 33.4% to US$53.18 million. Same-store performance showed more modest slippage, with revenue down 11.5% to US$105.76 million and NPI 13.7% lower at US$49.26 million. The trust continued its suspension of half-yearly unitholder distributions under the Master Restructuring Agreement; no dividends were declared for FY 2025.
Performance was pressured by occupancy falling to 67.7% from 73.6% a year earlier, reflecting tenant departures at Diablo and Figueroa. Lower lease-termination income at Diablo and Exchange further damped NPI, although these headwinds were partially offset by reduced property-tax expenses and the absence of one-off financing fees booked in the prior year. Asset disposals—Capitol in October 2024, Plaza in February 2025 and Peachtree in May 2025—also pared rental contributions during the year.
By asset, four of seven properties posted valuation gains, helping to limit the overall portfolio devaluation to 1.6% at US$913.8 million. Weighted-average discount rates eased 12 basis points and terminal capitalisation rates rose 4 basis points, signalling some improvement in selected U.S. sub-markets.
On the balance-sheet front, aggregate leverage stood at 58.0% as at 31 Dec 2025. The manager retired US$186.0 million of debt during the year using divestment proceeds and cash on hand, leaving only a US$35.6 million loan maturing in July 2026. Lenders have extended covenant relaxations on unencumbered gearing (up to 80% until 30 Jun 2026) and bank interest-coverage ratio (down to 1.5-times until 31 Dec 2026).
Looking ahead, the trust is executing its “Growth and Value Up Plan”, which targets asset sales totalling at least US$ and a pivot towards industrial, residential and retail properties. Management aims to meet a “Minimum Sale Target” by June 2026 to further pare leverage and shore up liquidity. Negotiations are under way for the divestment of one property announced on 25 Feb 2026, though completion is not assured.
Chief executive and chief investment officer John Casasante said the immediate focus is on balance-sheet repair through disposals and diversification. He noted that proceeds will be channelled to debt reduction and reinvestment in sectors deemed to offer more resilient cash flows, positioning the Singapore-listed REIT for “sustainable long-term growth” despite lingering vacancy pressures in its U.S. office portfolio.