This is a follow up to my last post on “Are The Distribution From Manulife US REIT Sustainable? Payouts Seems Greater Than Free Cashflow for Past Two Years”. As mentioned previously, I have sent out an email to seek the comments of the management team of Manulife US REIT (“MUST”). I was surprised at the quick response within 2 working days by their Investor Relation team which is an excellent reflection of the dynamic culture and tone at the top. I should summarize and share the key comments by the MUST Investor Relation team here.
1. MUST Comments on 1H 2020 Income Statement Net Losses
Accounting recognition of fair valuation through P&L does create volatility in the P&L. In the case of 1H 2020 results, the accounting loss is due mainly to fair value loss of investment properties and derivatives – itself does not create a cashflow issue.