Singapore-listed Manulife US Real Estate Investment Trust said it expected to post a loss in the last fiscal year due to fair value loss on its properties but could deleverage its balance sheet sooner than expected.

Based on an independent valuation, Manulife US REIT's portfolio was valued at $1.137 billion at the end of 2024, down 9.3% on year, the company said Friday.

Despite the decline in the valuation of its properties, the company said it would continue to focus on strategic capital and asset management to strengthen its balance sheet.

The company said it is also currently in talks to sell some of its properties, which would enable it to move closer to its 2025 target of generating $328.7 million of divestment proceeds.

The company plans to deleverage its balance sheet by repaying $200.0 million to lenders by 2025, which will enable it to achieve the master restructuring agreement sooner than expected.

Many Singapore REITs, particularly those exposed to the U.S. market, faced challenges last year with high interest rates straining their balance sheets. Lower occupancy levels and a weak real estate market in the U.S. also weighed.

While there were signs of stabilization in some select submarkets, other submarkets face valuation declines due to diverse economic conditions and challenges in different geographic regions in the U.S., Manulife US REIT said.

The REIT, which has properties in several U.S. states including Washington, California, and New Jersey, said that despite incurring a loss for fiscal year 2024, it should be able to meet its obligations, including interest payments.