Daily Update: Manulife US REIT Sells LA Tower for $92.5M; Mitsubishi HC Capital, Brookfield Launch Renewables JV

Manulife US REIT

SINGAPORE-LISTED MANULIFE RAISES US$92.5 MILLION FROM SALE OF FIGUEROA, SHIFTS FOCUS TO RESTRUCTURING AND GROWTH STRATEGY

Singapore Stock Exchange-listed Manulife US Real Estate Investment Trust (MUST) Wednesday said it has completed the sale of Figueroa, a 35-storey Class A office building in downtown Los Angeles, to an unrelated third-party purchaser, for a gross price of US$92.5 million. Net proceeds of ~US$82 million will be mainly used to repay the outstanding loan due in 2026 and for partial repayment of loans due in 2027.

As at 31 March 2026, MUST’s portfolio comprised seven freehold office properties in Arizona, California, Georgia, New Jersey, Virginia and Washington D.C., with an aggregate net lettable area of 3.5 million sq ft.

The sale, together with earlier dispositions of three other properties, will enable MUST to achieve the Minimum Sale Target of US$328.7 million under its Master Restructuring Agreement (MRA) with lenders. This is expected to strengthen MUST’s liquidity and support management’s efforts to explore an exit from the MRA, as well as execute its Growth and Value Up Plan, which seeks to revitalise the portfolio and support long-term value creation.

Since November 2024, MUST has repaid approximately US$316.7 million of debt through sales proceeds from Capitol, Plaza and Peachtree, together with additional balance sheet cash.

Following the Figueroa divestment, MUST expects to further repay ~US$35.6 million of 2026 debt and ~US$36.8 million of 2027 debt, leaving only US$133.4 million of loans outstanding in 2027.

Chief Executive Officer and Chief Investment Officer of the Manager of MUST, John Casasante, said: “The completion of the Figueroa sale represents a significant milestone in our risk management strategy, as we address debt maturities and MRA requirements to stabilise the REIT. The suspension of distributions, asset divestments and debt repayments were difficult but necessary measures to stabilise our balance sheet and meet lenders’ requirements during an unprecedented period for the U.S. office sector.

“We continue to have discussions with our lenders on the next phase of our plan—to exit the MRA. This would enable us to resume distributions in a disciplined and sustainable manner, while advancing our Growth and Value Up Plan to reposition the portfolio and deliver long-term value to unitholders.”

“Assuming ~US$72.4 million of proceeds from the Figueroa sale is used to repay outstanding debt, and ~US$10.0 million is retained for capital expenditure requirements, MUST’s key metrics as at 31 March 2026 are expected to improve on a pro forma basis, with aggregate leverage improving from ~58% to ~55%, weighted average debt maturity increasing from 2.1 years to 2.3 years, and portfolio occupancy rising from 67.6% to 73.2%,” the company added.

The Manager intends to reinstate its initial loan facility agreements with lenders by December 2026 and align its bank interest coverage ratio thresholds with the Monetary Authority of Singapore’s prevailing guideline of 1.5 times. Should a possible exit from the MRA take place, the Manager intends to progressively resume distributions to unitholders in a sustainable manner.

In addition, the Manager will address its remaining 2027 debt maturities through strategies such as divestments, refinancing, equity raising, and/or debt maturity extensions.

At the same time, the Manager will focus on executing its Growth and Value Up Plan as approved by unitholders in December 2025. The broadened investment mandate provides greater flexibility for MUST to diversify its portfolio and pursue up to US$600 million of acquisitions beyond U.S. office assets, with a focus on potentially more resilient and less capital-intensive sectors, namely industrial, living sector and retail properties across the U.S. and Canada.

MITSUBISHI HC CAPITAL AND BROOKFIELD PARTNER TO LAUNCH RENEWABLE ENERGY COMPANY

Mitsubishi HC Capital and Brookfield Asset Management Wednesday said they have formed a joint venture for a privately held renewable energy company that will acquire and operate a diversified portfolio of contracted, operating renewable energy assets in Europe.

The seed portfolio comprises approximately 570 megawatts of installed capacity diversified across the U.K., Spain, Sweden, Finland, France and Ireland, with an equity value of approximately EUR 400 million. 

The assets are highly contracted under long term power purchase agreements, which have a weighted average remaining term of approximately 10 years. 

The JV is also evaluating potential future acquisitions of additional renewable energy assets in Europe and Australia. Future acquisitions are expected to focus on stabilized operating assets, including onshore wind, utility-scale solar, and battery energy storage, underpinned by attractive commercial arrangements consistent with those of the seed portfolio.

The JV will be jointly controlled by Mitsubishi HC Capital and Brookfield through customary governance arrangements. Brookfield will be responsible for the JV’s operations, supported by an experienced management team appointed to lead the business. Future asset acquisitions will be subject to the approval from Brookfield and Mitsubishi HC Capital, with each contributing on a pro rata basis.

Hayato Shinada, Senior Corporate Officer, Global Environment & Energy Department, General Manager of Mitsubishi HC Capital said: “This initiative is positioned as a growth investment under the “Invest in high-profitability business domains” of our business portfolio restructuring strategy in our Medium-term Management Plan for FY2026-FY2028. 

Ignacio Paz-Ares, Deputy Chief Investment Officer for Brookfield’s Energy group, said: “We are pleased to partner with Mitsubishi HC Capital to launch a scaled renewable energy platform anchored by a diversified seed portfolio of high-quality operating assets. With the potential to deploy significant additional capital into a pipeline of renewable power assets, the platform is well positioned for growth across Europe and Australia.”

Macquarie Capital and Santander acted as exclusive financial advisor to Mitsubishi HC Capital and Brookfield, respectively, on the transaction for the seed portfolio.