REIT ASIAPAC
Q7
Vaccination rates in the US are progressing quite nicely , albeit there are pockets of hold outs . How do you see the recovery from COVID – timeline , trajectory , magnitude , etc ? and allow us to acquire yield-accretive properties or portfolios with cap rates ranging from 6.5 % to 7.5 %. On the tenant front , MUST aims to attain at least 20 % in high growth sectors , up from the current 10 %.
The upcoming 12 months should be an exciting period with recent economic numbers pointing towards a strong recovery . Economic activity has picked up , while job growth has also increased in May . Although there are some concerns around inflation , the recent momentum , along with the proposed budget plans should make way for healthy recovery .
MUST is well positioned to capitalise on these post COVID-19 themes as 52 % of its AUM is exposed to tech , entertainment and cloud security services , while at least 48 % of its AUM is exposed to the population migration trend
Q8
How will Biden ’ s tax and budget proposals impact MUST ?
President Biden ’ s proposed budget calls for US $ 5.4 trillion in additional spending over 10 years . If this is successfully enacted , the expanded health insurance coverage could drive demand for medical spaces situated closer to consumers , which is one of the sectors MUST is looking to capture in its growth strategy . In addition , increased investments in infrastructure and R & D should benefit office and industrial real estate demand .
The proposed tax hike would have no impact to MUST as we have put in place an efficient tax structure where our tax deductibles ( mainly shareholder loan interest and building depreciation ) are effective in shielding against US tax .
Additionally , President Biden has pledged to reduce US greenhouse gas emission ( GHG ) by at least 50 % in 2030 . MUST will work to implement actions to support any upcoming regulations . We have already set a GHG emissions target in response to the anticipation of upcoming emissions-related regulations and investor expectations , but we would welcome a federal approach to support consistent building performance standards .
That said , economic recoveries tend to be uneven , with some geographies and industries rebounding more quickly than others . Looking ahead , MUST is seeking transformational growth by riding on some post COVID-19 themes .
For instance , emerging markets in the Sun Belt region are capturing a disproportionate share of tenant demand and have more stable occupancy levels compared with the gateway cities such as New York and San Francisco . Amid the recovery , several themes that provide good opportunities in the commercial real estate sector in the US have also emerged . We are seeing strong growth in the tech sector , demand for healthcare , along with acceleration of population and company migration to key magnet cities .
MUST is well positioned to capitalise on these post COVID-19 themes as 52 % of its AUM is exposed to tech , entertainment , and cloud security services , while at least 48 % of its AUM is exposed to the population migration trend . MUST seeks to target key locations with strong fundamentals that ride on these themes
Photo : Peachtree , Atlanta , Georgia Source : Manulife US REIT
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