Manulife US REIT (Manulife) announced its second acquisition, 10 Exchange Place (Exchange) in New Jersey from its sponsor. The freehold Class A property is well located, with prominent frontage along the Hudson river waterfront and offers excellent connectivity to New York city. It’s pro-forma (FY16) NPI yield of 5.7% has upside potential from rental growth as average rents are well below market. The acquisition further diversifies its portfolio both geographically and in terms of tenant mix. Funding would be via rights issue and debt. Maintain BUY and TP of USD0.98, with a 13% upside from theoretical ex-rights price of USD0.87.

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