United Hampshire US Reit Q3 NPI rises 8.7% to US$12.9 million
Mia Pei
UNITED Hampshire US Real Estate Investment Trust (Reit) posted an 8.7 per cent increase in net property income (NPI) to US$12.9 million for the third quarter ended Sep 30, compared with US$11.9 million a year ago.
The Reit’s distributable income, however, dropped 5.2 per cent to US$7.9 million. Excluding the US$800,000 management fee in cash, Q3 distributable income stood at US$7.1 million.
Gross revenue for the quarter grew 8.5 per cent to US$18.4 million, compared with US$17 million in Q3 FY2022.
“The portfolio’s strong performance was supported by contributions from recently renewed leases, rental escalations from existing leases and the latest acquisition, Upland Square,” said the manager in an operational update on Thursday (Nov 9).
However, the growth was offset by the impact of higher interest expenses and an additional loan to finance the acquisition in July 2022.
The manager highlighted that it has no refinancing requirements in 2023 and only a US$21.1 million mortgage loan is maturing in 2024. As at Sep 30, with a long weighted average debt maturity of 3.2 years, 93.4 per cent of its debt is maturing in November 2026 or later.
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In the high interest rate environment, the manager noted that 80.9 per cent of the Reit’s total loans are either fixed rate or floating rate loans hedged with interest rate swaps. It has an interest coverage ratio of 2.7 times.
Its gearing of 41.7 per cent dropped slightly from the previous quarter, and the weighted average interest rate stood at 4 per cent.
For its grocery and necessity properties, long weighted average lease expiry stood at 7.2 years, including forward committed leases, with 25 lease renewals and five new leases signed in the nine months.
Chief executive of the manager Gerard Yuen said: “Committed occupancy at our grocery and necessity properties remains high at 97.2 per cent, supported by a diversified tenant base of which, 63.6 per cent provide essential goods and services.”
The average quarterly net rental rate remained steady despite slight drops in occupancy rates for both Carteret and Millburn self-storage properties.
As at Sep 30, the occupancy for Carteret was 89.2 per cent and for Millburn was 92.1 per cent, moderated by a normalised storage demand to pre-Covid levels.
Under heightened macro uncertainties, the manager noted that it will continue to focus its efforts on optimising the portfolio and strengthening its income streams through asset enhancement, as well as upgrade initiatives.
Units of United Hampshire US Reit closed 3.8 per cent or S$0.015 lower at US$0.38 on Thursday.
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