United Hampshire US Reit prepares to list on SGX
Singapore
UNITED Hampshire US Real Estate Investment Trust (Reit) has lodged a preliminary prospectus to list a US-focused Singapore Reit on the Singapore Exchange, the Reit manager said on Tuesday.
United Hampshire US Reit has a portfolio of 22 properties on the east coast of the US, consisting of 18 grocery and necessity-based retail properties and four self-storage properties.
The portfolio had an occupancy of 95.2 per cent as at Sept 30, and the grocery and necessity properties have a long-weighted average lease expiry by base rental income of 8.4 years.
Tenants include some of the largest grocers, wholesalers, home improvement retailers and discount retailers in the US, such as Walmart, Home Depot and Lowe's Companies.
All but one of the properties are freehold, and the recession-resistant, cycle-agnostic nature of grocery and necessity retail and self-storage as well as growth in consumption in the US give the portfolio a "balance of defensive attributes", the manager said.
The initial portfolio has an aggregate net lettable area of approximately 3.17 million square feet and an appraised value of approximately US$599.2 million.
Projected distributable income for the Reit is US$24.5 million in the 10 months from March 1 to Dec 31, 2020, and US$30.5 million in 2021. Net property income is forecast to be US$33.3 million for the 10-month period in 2020 and US$41.7 million in 2021.
The Reit's two units in issue before the offering are held by the Reit manager and Gerard Yuen Wei Yi, who is the Reit manager's chief financial officer.
Cornerstone investors include Kuang Ming Investments, Kasikorn Asset Management, Bangkok Life Assurance Public, and Chiu Hong Keong and Khoo Yok Kee, managing director and executive director respectively of Malaysian piling and foundation specialist Pintaras Jaya Berhad.
The Reit manager's board of directors includes former StarHub CEO Tan Tong Hai as independent chairman.
The Reit's two sponsors are UOB Global Capital, a subsidiary of UOB, and Hampshire US Holdco, a subsidiary of The Hampshire Companies.
The Reit manager noted that unitholders will enjoy stable and sustainable cash flows as the grocery and necessity-based assets benefit from sustained US consumption growth, as consumption accounts for approximately two-thirds of US gross domestic product.
Meanwhile, the self-storage sector has grown strongly in the last 25 years, and the Reit's newly completed asset has achieved over 90 per cent occupancy within a year with continued rent growth.
Located in the densely populated north-eastern US, the properties serve a more affluent population and benefit from limited supply and high barriers to entry.
The portfolio is also resistant to disruption from e-commerce, as brick-and-mortar still accounts for about 98 per cent of US grocery sales, and physical stores are needed by brands with omni-channel strategies, for "click and collect" orders and micro-distribution centres.
