tag:blogger.com,1999:blog-7992228579215130995.post9194522186138483364..comments2024-03-29T14:57:08.442+08:00Comments on Investment Income for Life: Are The Distributions From Manulife US REIT (MUST) Sustainable? Clarifications from MUST's Investor Relation TeamBlade Knighthttp://www.blogger.com/profile/05103558126797224603noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-7992228579215130995.post-1318615422043611702021-01-18T20:34:42.783+08:002021-01-18T20:34:42.783+08:00Hi CCM, yes you are right. Investors are at the me...Hi CCM, yes you are right. Investors are at the mercy of US Tax regulator and taxation rules. Let's hope Biden's administration does not come up with too much tax law changes.Blade Knighthttps://www.blogger.com/profile/05103558126797224603noreply@blogger.comtag:blogger.com,1999:blog-7992228579215130995.post-75036247101950690962021-01-17T16:57:13.846+08:002021-01-17T16:57:13.846+08:00Thanks Blade Knight. I am not familiar with tax la...Thanks Blade Knight. I am not familiar with tax laws, however I always wonder if there is any downside with this structure. I remembered we had some confusion some time back for SGX listed US REITS over the US taxation. There was a period needed for get clarity. Meantime, the US REIT prices fell due to uncertainty.CCMhttps://www.blogger.com/profile/06032309350213156899noreply@blogger.comtag:blogger.com,1999:blog-7992228579215130995.post-12945574128689884922021-01-17T14:58:43.627+08:002021-01-17T14:58:43.627+08:00Hi CCM,
Good day to you.
1. The return of earni...Hi CCM,<br /><br />Good day to you. <br /><br />1. The return of earnings is via not just interest payments but also capital redemption.<br /><br />2. The 40% equity stake which you mentioned actually is referring to the manner of injection of funds into the US Subsidiary REIT setup to hold the actual properties so that is meets the tax requirement, that is, 40% of US Manulife REIT funds into the subsidiary is injected in the form of equity while 60% is injected into the subsidary as loans. <br /><br />In addition, note that the 40%-60% mix is just an illustrative example quoted by the Investor Relation to illustrate how the loan mechanism works to return earnings to Manulife US REIT. <br /><br />3. The property is 100% wholly owned by the unitholders of Manulife US REIT which is also as per the Org chart which depicts equity as "wholly owned" and so is the shareholders' loans which are also "wholly owned". Blade Knighthttps://www.blogger.com/profile/05103558126797224603noreply@blogger.comtag:blogger.com,1999:blog-7992228579215130995.post-75436467399383667632021-01-17T14:42:00.432+08:002021-01-17T14:42:00.432+08:00Yes RP, same thoughts here...the tax structure set...Yes RP, same thoughts here...the tax structure setup is complex indeed. But glad that there are good tax specialists helping to mitigate the tax exposure.Blade Knighthttps://www.blogger.com/profile/05103558126797224603noreply@blogger.comtag:blogger.com,1999:blog-7992228579215130995.post-63383030031328866282021-01-17T12:12:48.176+08:002021-01-17T12:12:48.176+08:00Sounds like REIT unit holders don't own the pr...Sounds like REIT unit holders don't own the property directly. Rather its a loan to a related entity and distribution is via interest payments. Unsure if I understood the structure correctly. If yes, then if the property is sold as then unit holders only enjoy the 40% equity benefit.. based on the $40/$60 example of a $100 property. Is this correct? CCMhttps://www.blogger.com/profile/06032309350213156899noreply@blogger.comtag:blogger.com,1999:blog-7992228579215130995.post-70777682140647881532021-01-16T22:24:26.573+08:002021-01-16T22:24:26.573+08:00Thanks for the clarification.
Taxation is a compl...Thanks for the clarification.<br /><br />Taxation is a complex issue, particularly when international companies are involved.RPhttps://www.blogger.com/profile/17695303458973909485noreply@blogger.com