United Hampshire US Reit acquires shopping centre in Pennsylvania for US$85.7 million

UNITED Hampshire US Real Estate Investment Trust (UHReit) is acquiring a grocery-anchored freehold shopping centre for US$85.7 million in Pennsylvania, expanding its footprint in the affluent Eastern seaboard.

The purchase price for Upland Square in Pottsdown, Pennsylvania is 0.3 per cent below the independent valuation of US$86 million, the Reit’s manager said on Thursday (Jun 9).

Upland Square has a net lettable area of about 400,674 square feet, with a 100 per cent committed occupancy rate and a long-forward committed weighted average lease expiry of 6.3 years.

Anchor tenants include Giant by Ahold Delhaize, a leading supermarket operator in mid-Atlantic US, and popular national off-price retailers such as TJ Maxx, Ross, and Burlington. There are 35 tenants in all.

The acquisition is expected to increase UHReit’s pro forma distribution per unit by 2.13 per cent, to 6.23 US cents, the manager said.

Committed occupancy of UHReit’s : ODBU 0% portfolio will increase to 96.6 per cent with this acquisition - the highest occupancy achieved since its initial public offering. UHReit, which made its debut on the Singapore Exchange on Mar 12, 2020, is the first Reit with US exposure here.

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Robert Schmitt, chief executive officer of the Reit’s manager, said UHReit has recycled proceeds from its earlier divestment of 2 self-storage properties in New Jersey into this “higher-yielding, sizeable, stabilised” asset.

“Upland Square is a strategic fit with our investment criteria being well-located in a vibrant sub-market with limited competition and high barriers to entry for new retail development. Additionally, the property benefits from a strong highway infrastructure that provides easy access to and from the growing surrounding residential communities,” Schmitt said.

Post-acquisition, contribution from the top 10 tenants in UHReit’s portfolio will reduce from the current 60.2 per cent to 56.8 per cent, providing diversification and stabilising the portfolio’s income, the manager said.

The enlarged portfolio will also benefit from lower lease expiries in 2023 and 2024, with less than 10 per cent of leases due for renewal every year from 2023 to 2026. The portfolio’s weighted average lease expiry will decrease marginally from 7.8 years to 7.7 years.

Units of UHReit closed flat on Thursday at US$0.605, before the announcement.