Manulife US REIT to acquire $198.8million Class A asset in California

SINGAPORE: Manulife US Real Estate Investment Trust (MUST), the first pure-play U.S. office REIT listed in Asia, announced that MUST, through its indirect wholly owned subsidiary, has entered into a purchase agreement with 400 Capitol Mall Owner, L.P. to acquire a freehold 29-storey Class A office building located at 400 Capitol Mall, Sacramento, California for an estimated aggregate purchase consideration of US$198.8 million.

The total cost of the Acquisitionis currently estimated to be approximately US$206.1 million, comprising the purchase consideration of US$198.8 million, an acquisition fee of approximately US$2.0 million, and the estimated professional and other transaction fees and expenses of approximately US$5.3 million.

The Manager will finance the Total Acquisition Cost through a combination of loans and an equity fund raising.

Commenting on the acquisition, Jill Smith, Chief Executive Officer of Manulife US Real Estate Management said, “We are delighted to acquire the top Class A asset, 400 Capitol, Sacramento, California for MUST’s blue chip office portfolio. As the capital city of California, just a drive away from San Francisco and the major tourist destinations of the Napa Valley and Lake Tahoe, Sacramento is a premier business hub with low business and living costs and a flourishing economy driven by healthcare, government and tech. Towering above the CBD, and benefiting from the US$2.0 billion rejuvenation of sports, entertainment and hospitality developments plus a residential boom, 400 Capitol is an address of choice to many leading international and professional service companies. 400 Capitol enjoys a strong occupancy of 94.9% and a long WALE of 5.9 years. It complements our existing high quality portfolio by improving tenant and income diversification. Not only is this acquisition 2.3% accretive, based on our 1H 2019 pro forma DPU, but it may also trigger a re-rating story for MUST as we inch closer to the FTSE EPRA Nareit Index during its next review.”

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