Manulife US REIT 2026 (SGX: BTOU): Why the Dividend Is Still Frozen

July 2026 | S-REITs | Manulife US REIT Deep Dive

Manulife US REIT (SGX: BTOU) has not paid a distribution since 2023. Its lenders forced a restructuring deal, aggregate leverage sits around 58% — above MAS’s 50% limit but covered by a devaluation waiver — and unitholders just approved a pivot away from pure US office into industrial, multifamily and retail assets across the US and Canada.

Not financial advice. All figures are for educational reference only. Data as at July 2026 unless noted.

Table of Contents

What Is Manulife US REIT?

Manulife US REIT (MUST) listed on the SGX in 2016. It was the first pure-play US office REIT listed in Asia, giving Singapore investors direct access to Class A office towers in cities like Los Angeles, Atlanta, and Washington DC.

That pitch worked well for a few years. Then remote work, rising US interest rates, and a brutal office-vacancy cycle hit at the same time. Office values across the US fell sharply, and MUST’s borrowing costs climbed just as its rental income came under pressure.

By 2023, the REIT’s lenders stepped in. Distributions were suspended, and MUST entered a Master Restructuring Agreement (MRA) — a formal deal that trades unitholder income for breathing room to sell assets and pay down debt.

Source: Manulife US REIT SGX filings; Google Finance, July 2026.

That last row is worth sitting with. A REIT that once held a multi-billion-dollar portfolio now trades with a market cap under US$100 million. This is a cautionary tale as much as an investment case — which is exactly why it deserves a clear-eyed look.

Why Distributions Are Still Suspended

Here’s the short version: MUST’s lenders control the payout switch, not the REIT manager.

Under the Master Restructuring Agreement, distributions stay frozen until MUST satisfies a set of lender conditions. The most important one is the interest coverage ratio (ICR) — basically how many times over the REIT’s rental income can cover its interest bill. Lenders require this above 1.5 times before they’ll even consider letting payouts resume.

To put a number on what’s at stake: had a certain property sale been completed by end-2025, MUST’s pro forma DPU (Distribution Per Unit — the REIT version of a dividend) would have worked out to just 1.33 US cents. That’s not a typo. It shows how far the payout has fallen from MUST’s pre-2023 levels, even in a hypothetical “if distributions resumed today” scenario.

Meanwhile, the REIT’s fundamentals kept sliding. FY2025 gross revenue fell 32% year-on-year to US$113.9 million, as office leases rolled off and tenants downsized or left. That kind of revenue drop is one of the sharpest you’ll see among SGX-listed REITs.

For context, even quality office REITs elsewhere have not seen revenue fall this fast. This is the core reason lenders are unwilling to let cash leave the building until the balance sheet is repaired.

MUST’s 1H2026 results briefing is scheduled for 6 August 2026 — a date worth marking if you’re tracking whether the suspension shows any signs of easing.

The Aggregate Leverage Problem

Since 28 November 2024, the Monetary Authority of Singapore (MAS) applies one uniform rule to every S-REIT: a maximum aggregate leverage of 50%, alongside a minimum interest coverage ratio of 1.5 times. This replaced the old two-tier system where REITs could gear up to 50% only if their ICR cleared a higher 2.5x bar.

MUST’s aggregate leverage sat at roughly 58% at the end of 2025 — well above that 50% ceiling.

Source: Manulife US REIT SGX filings, MAS Property Funds Appendix, July 2026.

Here’s the nuance that most headlines miss: MUST is not technically in breach of the 50% limit. Under paragraph 9.4 of MAS’s Property Funds Appendix, exceeding the leverage limit doesn’t count as a breach if it happened because of asset devaluation — circumstances beyond the Manager’s control — rather than new borrowing. Since MUST’s leverage climbed because its US office properties lost value, not because it borrowed more, MAS granted a waiver.

That waiver comes with a catch: the Manager cannot take on additional borrowings or new deferred payment arrangements while leverage stays above 50%. In practice, that locks MUST out of using debt to fund the very acquisitions its diversification strategy will eventually need — reinforcing why asset sales, not fresh borrowing, are doing all the heavy lifting right now.

Debt Paydown & Asset Sale Progress

To its credit, MUST’s management has made real progress on the one lever it fully controls: selling assets and using the proceeds to retire debt.

In June 2026, MUST completed the sale of Figueroa, a 35-storey Grade A office tower in downtown Los Angeles, for US$92.5 million. Net proceeds of roughly US$82 million went straight toward retiring 2026 debt maturities and chipping away at 2027 obligations.

That Figueroa sale — together with earlier divestments — pushed MUST past its Minimum Sale Target of US$328.7 million under the MRA. Clearing that threshold matters because it’s one of the key conditions for MUST to eventually exit the restructuring agreement altogether.

Since November 2024, MUST has repaid about US$316.7 million of debt largely through asset sales and balance sheet cash. Counting earlier disposals too, cumulative debt repayment reaches roughly US$389 million — a meaningful dent, even if the REIT still has a long runway back to compliance.

The trade-off is obvious: every property sold is a smaller REIT, with a shrinking asset base to eventually generate distributable income from. This is the tension at the heart of any distressed-REIT recovery story — you have to shrink to survive before you can grow again.

The 2026 Diversification Pivot

In April 2026, MUST’s Manager put a bold plan to unitholders: stop being a pure US office REIT. At the AGM, unitholders approved a mandate letting MUST acquire industrial, multifamily (residential/”living”) and retail assets — and, for the first time, properties in Canada as well as the US.

The logic is straightforward. US office demand faces structural headwinds that may not fully reverse for years. Industrial and multifamily assets, by contrast, have held up far better through the same rate cycle. Diversifying away from office reduces MUST’s dependence on a single, currently out-of-favour property type.

There’s a catch built into the new acquisition mandate, though: any new acquisition must carry an interest coverage ratio of at least 1.6 times so long as MUST’s aggregate leverage stays above 50%. Given where leverage sits today, that’s a high bar — it likely limits MUST to smaller, conservatively-financed deals in the near term rather than transformative ones.

Realistically, this pivot is a multi-year project. Don’t expect a fully diversified portfolio by the 1H2026 results in August — expect a gradual shift as offices continue to be sold and new sectors are added in size that leverage covenants allow.

How MUST Compares to Other US REITs on SGX

MUST isn’t the only SGX-listed REIT with US property exposure — but it is, by far, the most distressed. Here’s how it stacks up against its closest peers.

Source: SGX filings, company announcements, July 2026. Figures approximate.

The pattern here is instructive: not all “US REIT” exposure is equal. United Hampshire US REIT‘s grocery-anchored retail and self-storage portfolio has proven far more resilient than office. Prime US REIT sits in between — it resumed distributions and occupancy is recovering, but it hasn’t escaped office-sector headwinds entirely.

MUST is the cautionary end of the spectrum. If you already own it, this comparison is a useful benchmark for how much worse its situation is than sector peers. If you’re considering buying it fresh, the same comparison should give you pause.

Is There a Recovery Case? Buy, Hold or Avoid

Let’s be direct about what MUST is right now: a distressed, deep-value speculation — not an income investment. Anyone buying it for yield today is mistaken, because there is no yield. There hasn’t been one since 2023, and there won’t be one until leverage falls meaningfully below 50% and the ICR clears 1.5x on a sustainable basis.

Not financial advice. July 2026.

The bull case: MUST has cleared its Minimum Sale Target, cut debt by roughly US$389 million since November 2024, and now has a broader acquisition mandate to diversify away from its weakest sector. If US office values stabilise and a few more sales land well, the path back to a smaller — but sustainable — distributing REIT is visible.

The bear case: the REIT is still above MAS’s leverage limit (waiver notwithstanding), can’t borrow to fund its own turnaround plan, and has already sold some of its better assets to survive. A market cap of roughly US$91 million against a portfolio that was once valued in the billions tells you how much value has already been destroyed. There is no guarantee distributions resume on any specific date — or that unitholders aren’t diluted further before they do.

If MUST’s story appeals to you as a speculative, small-position bet, treat it exactly like that — a small position, not a core passive income Singapore holding. For dependable S-REIT income today, our best S-REITs in Singapore 2026 guide is a better starting point.

Whatever you decide, run the numbers through our Singapore retirement calculator first — a speculative REIT position should never be sized as if it were a stable income asset.

Frequently Asked Questions

Disclaimer: This article is for informational and educational purposes only. It does not constitute financial advice, investment recommendations, or an offer to buy or sell any securities. Manulife US REIT is a distressed asset undergoing restructuring — its unit price and financial position may change materially and quickly. Please do your own due diligence and consider consulting a licensed financial adviser before making investment decisions. The Kopi Notes may receive referral fees from the platforms mentioned above. Sources: Manulife US REIT SGX filings and investor relations disclosures, MAS Property Funds Appendix, company announcements — all as at July 2026.