Manulife US REIT's manager announces proposed sale of Phipps to sponsor

The manager of Manulife US REIT announced on May 24 that it has entered into a letter of intent with The Manufacturers Life Insurance Company (Manulife, its sponsor) "in relation to the proposed sale of the property known as Phipps Tower" in Atlanta.

Phipps was valued at US$210 million as at Dec 31, 2022, at a capitalisation rate of 5.25%. Its net property income in FY2022 was US$12.2 million, up from US$11.9 million in FY2021, and contributed 10.8% to MUST's total NPI in FY2022.

If MUST manages to divest Phipps for around US$190 million to US$200 million, it would take the REIT's aggregate leverage down to a more manageable 43% or thereabouts. 

The manager also announced that the exclusivity period with Mirae Asset Global Investments has lapsed.

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