United Hampshire US Reit Q3 distributable income up 15.5% at US$7 million

[SINGAPORE] The manager of United Hampshire US Reit posted a distributable income of US$7 million in the third quarter ended Sep 30, up 15.5 per cent from US$6 million in the year-ago period.

Its net property income (NPI) for the three months rose 5.7 per cent year on year to US$12.7 million from US$12 million.

For the quarter, revenue edged up 1.4 per cent to US$18.1 million from US$17.9 million.

Gerard Yuen, chief executive officer of the manager, said that Q3’s improvements were driven by the commencement of new leases, built-in rental escalations from existing leases, and lower interest costs.

Noting that the quarter recorded sustained leasing momentum, he added that the contribution from Dover Marketplace in Pennsylvania, acquired in August 2025, also contributed to the performance from its strategic location and its being anchored by a leading grocery tenant.

Lower finance costs due to reduced interest rates and lower borrowings following partial loan repayments made using proceeds received from divestments, also contributed, the manager added.

For the nine months ended September, distributable income rose 6.6 per cent on the year to US$19.9 million from US$18.7 million. This was due to reduced finance costs stemming from lower interest rates and lower borrowings, following partial loan repayments made using proceeds from divestments.

However, NPI fell 1.9 per cent to US$36.7 million, from US$37.4 million in the year-ago period, while revenue dropped 1.6 per cent to US$53.8 million from US$54.7 million.

The declines for the nine months were mainly due to the absence of contributions from three properties in upstate New York divested in August 2024 and January 2025. These were the Lowe’s and Sam’s Club properties in Hudson Valley Plaza, and the Albany Supermarket.

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Excluding these divestments, on a same-store basis, revenue and NPI would have risen on the year by 3.1 per cent and 5 per cent respectively.

In the year to date, the Reit’s total returns stood at 14.6 per cent as at Sep 30. With a price-to-book ratio of 0.68 times, the manager noted that it was trading at a 32 per cent discount to its net asset value of US$0.74 as at Jun 30, and offering a high dividend yield of 8.3 per cent.

As at Sep 30, committed occupancy of the Reit’s grocery and necessity properties stood at 97 per cent, with a weighted average lease expiry of 7.5 years.

Occupancy rates for the Reit’s self-storage properties Carteret and Millburn – both in New Jersey – were, respectively, 93.4 per cent and 96.4 per cent, as average quarterly net rental rates remained high.

In terms of capital management, the manager said that the Reit has a “well-spread debt maturity profile” with no refinancing requirements until November 2026.

As at Sep 30, its aggregate leverage was 37.8 per cent, with 78.5 per cent of total loans being fixed-rate loans or floating-rate loans that were hedged to fixed rates. The Reit’s weighted average interest rate for the trailing 12-month period stood at around 5.1 per cent, and its weighted average debt maturity stood at 1.6 years. Its interest coverage ratio was 2.6 times.

Outlook

The manager said that the outlook for grocery-anchored strip centres remains “robust” amid limited new supply and “good retail demand”, and that the self-storage sector remains “resilient”, underpinned by an undersupply of facilities.

This comes as the September and October rate cuts by the US Federal Reserve, which has lowered interest rates to 3.75 per cent to 4 per cent, will boost consumption and investment, the manager said. The rates are the lowest level in three years.

It intends to continue strengthening the Reit’s income streams and balance sheet through asset enhancements and development initiatives, accretive investments and opportunistic divestments.

Units of United Hampshire US Reit ended Thursday at US$0.50, up 1 per cent or US$0.005.