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In the heart of hearts, I applaud Manulife REIT managers for not answering the below question directly, because it could have came from a competitor or a prospective buyer/s themselves!
ANNUAL GENERAL MEETING ON 18 APRIL 2024 RESPONSES TO SUBSTANTIAL AND RELEVANT QUESTIONS FROM UNITHOLDERS
Question:
What is the status of your disposition plan? When do you expect to execute your divestments? Any challenges or obstacles hindering the process? Please give an update with regards to the execution of the Recapitalisation Plan, especially the sales of Tranche 1 assets. How are we progressing on the plan? How many prospective buyers have the REIT spoken to? How many prospective buyers have had a look at the REIT's properties?
Answer:
Transaction volumes for office sales in the U.S. remain slow, largely due to a lack of available lending in the market and a wide bid-ask spread between buyers and sellers. Interest rates have been the biggest unknown in U.S. commercial real estate, and the stabilisation and eventual lowering of rates will be key to a resumption of a normal capital markets environment. Late in 2023, the market widely expected that the U.S. Fed would begin lowering rates in early 2024. The market anticipated that this would lead to an increased number of transactions as expectations realign and the bid-ask gap narrows due to a stabilising cost of capital. However, expectations for rate reductions have been pushed back to later in 2024 and the improvements that were hoped for in capital market conditions have been similarly delayed. Still, transactions are happening, and there are all-cash buyers actively pursuing deals in the market. These buyers are typically bargain-hunting, looking to purchase high-quality assets at attractive prices.
In the midst of these challenging conditions, we have identified some Tranche 1 and Tranche 2 assets that have attractive attributes for buyers in the market. There are currently two properties which we are analysing for potential disposition. The process of broker selection has begun on these properties. Once brokers are selected, a marketing and sale process will begin in the subsequent weeks and bids would be solicited as soon as practicable. The completion of a property sale would depend on several factors. All-cash buyers could potentially close the sale more quickly, as they would not be reliant on securing debt financing prior to closing.
AGM Q&A
https://links.sgx.com/FileOpen/Manulife%...eID=796300
ANNUAL GENERAL MEETING ON 18 APRIL 2024 RESPONSES TO SUBSTANTIAL AND RELEVANT QUESTIONS FROM UNITHOLDERS
Question:
What is the status of your disposition plan? When do you expect to execute your divestments? Any challenges or obstacles hindering the process? Please give an update with regards to the execution of the Recapitalisation Plan, especially the sales of Tranche 1 assets. How are we progressing on the plan? How many prospective buyers have the REIT spoken to? How many prospective buyers have had a look at the REIT's properties?
Answer:
Transaction volumes for office sales in the U.S. remain slow, largely due to a lack of available lending in the market and a wide bid-ask spread between buyers and sellers. Interest rates have been the biggest unknown in U.S. commercial real estate, and the stabilisation and eventual lowering of rates will be key to a resumption of a normal capital markets environment. Late in 2023, the market widely expected that the U.S. Fed would begin lowering rates in early 2024. The market anticipated that this would lead to an increased number of transactions as expectations realign and the bid-ask gap narrows due to a stabilising cost of capital. However, expectations for rate reductions have been pushed back to later in 2024 and the improvements that were hoped for in capital market conditions have been similarly delayed. Still, transactions are happening, and there are all-cash buyers actively pursuing deals in the market. These buyers are typically bargain-hunting, looking to purchase high-quality assets at attractive prices.
In the midst of these challenging conditions, we have identified some Tranche 1 and Tranche 2 assets that have attractive attributes for buyers in the market. There are currently two properties which we are analysing for potential disposition. The process of broker selection has begun on these properties. Once brokers are selected, a marketing and sale process will begin in the subsequent weeks and bids would be solicited as soon as practicable. The completion of a property sale would depend on several factors. All-cash buyers could potentially close the sale more quickly, as they would not be reliant on securing debt financing prior to closing.
AGM Q&A
https://links.sgx.com/FileOpen/Manulife%...eID=796300