Manager’s move to retain income drags United Hampshire US Reit H1 DPU down 8.9% to US$0.0265
Uma Devi
UNITED Hampshire US real estate investment trust ( United Hampshire US Reit ) on Saturday (Aug 12) posted a distribution per unit (DPU) of US$0.0265 for the first half of the year, down 8.9 per cent from US$0.0291 in the corresponding year-ago period.
The trust said the manager has opted to retain distributable income totalling US$1.5 million as capital reserves for asset enhancement and development initiatives.
One example of such initiatives include the new Academy Sports + Outdoors store at Port St Lucie, the Reit said.
Excluding this retention, the Reit’s DPU figure for H1 would have held steady at US$0.0291.
Gross revenue for the period under review was up 13.3 per cent to US$36 million, due primarily to rent commencement from new leases, rent escalations as well as contributions from Upland Square which was acquired in July 2022.
Property operating expenses rose 9.7 per cent to US$10.2 million, primarily on the acquisition of Upland Square.
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Consequently, net property income was up 14 per cent to US$25.8 million.
United Hampshire US Reit’s finance costs for H1 rose 72.7 per cent to US$7.6 million largely due to the higher interest rates on the unhedged portion of secured overnight financing rate term loan facilities. The Reit also attributed the increase to the Upland Square mortgage loan assumed in July last year to partially finance the acquisition of Upland Square.
In H1, United Hampshire US Reit had entered into 22 new and renewal leases totalling 331,175 square feet. As at end-June, committed occupancy of its grocery and necessity properties’ reached a high of 97.9 per cent, along with a weighted average lease expiry of 7.2 years
Gerard Yuen, chief executive of the manager, said that as part of the Reit’s active asset management and rejuvenation strategy, it has entered into an agreement to divest Big Pine Center at a premium to its purchase price and valuation as at end-December 2022.
“This highlights the continued resiliency in the value of this asset class,” he said, adding that the divestment will further contribute to the Reit’s financial flexibility to repay debt and pursue asset enhancement and investment opportunities.
Yuen said the construction of the Academy Sports + Outdoors store at Port St Lucie is “progressing well” and is on track to be completed in 2024.
The Reit said that with a protracted high interest rate environment, its manager will continue to focus on optimising the portfolio and strengthening its income streams through asset enhancement and rejuvenation initiatives to deliver long-term value to all unitholders.
Units of United Hampshire US Reit fell 1.2 per cent or USS$0.005 last Friday to close at US$0.42.
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