United Hampshire US Reit H1 DPU falls 4.6% on absence of year-ago items

UNITED Hampshire US Reit : ODBU 0% (UHReit) on Friday (Aug 12) reported a 4.6 per cent fall in distribution per unit (DPU) to 2.91 US cents for H1 ended June.

The fall was due to lower income top-ups from its sponsor, The Hampshire Companies, than in the previous year, as well as the absence of US$700,000 in compensatory stipulated damage income from the delayed completion of Perth Amboy Self-Storage, that was recorded a year ago.

But excluding top-ups and stipulated damages, the real estate investment trust’s (Reit) DPU would have been 13.4 per cent higher at 2.88 US cents. This comes on the back of an 18.5 per cent rise in gross revenue to US$31.8 million, supported by contributions from newly acquired assets, Colonial Square and Penrose Plaza.

UHReit’s self-storage properties likewise saw improved performance, while its grocery and necessity-focused properties performed consistently. Net property income was up 10.6 per cent to US$22.6 million, and distributable income similarly rose 7.2 per cent to US$16.3 million. Property operating expenses were however up 10 per cent to US$9.3 million, due to the acquisition of the 2 properties.

UHReit recently completed another acquisition: that of Upland Square Shopping Center, a freehold grocery-anchored property in Pennsylvania, growing its total assets by 25.4 per cent to US$732.9 million, up from US$584.6 million at its listing.

It also delivered 13 new and renewal leases totalling 150,012 square feet in H1. Portfolio occupancy stood at 96.2 per cent as at end-June, with a weighted average lease expiry of 8 years.

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“Notwithstanding macro challenges such as inflation and recession concerns, we have observed that retail sales have continued to grow and US consumers continue to spend on groceries and consumer staples,” said Robert Schmitt, CEO of the Reit’s manager.

On the balance sheet front, the Reit has a leverage ratio of 38 per cent, with an interest cover of 6 times and US$17 million of undrawn committed revolving credit facilities.

Looking ahead, UHReit is exploring refinancing options for debt maturing next year. It is also selectively looking for opportunities to extend its exposure to the grocery and necessity sector in the “affluent and populous” Eastern seaboard markets.

The Reit was trading flat at US$0.625 on Friday as at 11.45 am.