Manulife US REIT NPI up 30.8% to $72.46m in Q2

Contributions from acquisitions like Centerpointe and Penn and Phipps boosted income.

Manulife US REIT's (MUST) net property income (NPI) rose 33.8% YoY to $37.74m in Q2 from $28.21m in the same period last year, an announcement revealed. Revenue rose 33.2% to $45.02m from $59.96m over the same period.

In the first half of the year, NPI surged 30.8% YoY to $72.46m in H1 2019 from $55.42m. Revenue also jumped 30.8% YoY to $72.36m from $88.45m.

The strong half-year performance growth was mainly attributed to contributions from Centerpointe which the REIT acquired on 10 May, as well as from Penn and Phipps which it bought on 22 June last year.

This increased their property operating expenses by 31.1% YoY to $42.92m for H1 2019. Finance expenses also increased 60.8% YoY to $16.75m due to additional loans incurred to partially finance the new acquisitions.

Also read: Manulife US REIT NPI rose 27.7% to $34.19m in Q1

Meanwhile, net income decreased 45.5% YoY to $22.98m, as unrealised fair value loss on derivatives and investment properties of $1.25m and $20.63m, respectively.

The latter, compared to the fair value loss on investment properties in H1 2018 at $13.57m was largely due to a larger increase to capital expenditures and leasing costs than in appraised fair values. The former was due to change in fair value from the movements in market interest rates.

The recognition of unrealised fair value loss on investment properties resulted in a reversal of deferred tax expenses causing a 65.5% YoY decrease in tax expense at $3.60m.

In addition, the net income available for distribution to unit holders was at $22.98m, 45.5% lower than the previous year due to higher net property income.

The firm also reported a committed occupancy of 97.2% and a weighted average lease expiry of 6.2 years by net lettable area as of 20 June.