UNITED Hampshire US Real Estate Investment Trust’s (Reit) distribution per unit (DPU) for the first half ended June 2024 stood at US$0.0201, down 24.2 per cent from its H1 FY2023 DPU of US$0.0265.
This comes after accounting for the manager receiving its full base fee for the period in cash instead of units, and after deducting US$1 million distributable income to retain as capital reserve for asset enhancement initiatives.
In the Reit’s results filing on Wednesday (Aug 14), its manager said the latest H1 DPU would have been US$0.0224 excluding the effect of management fee in cash, down 15.5 per cent from the prior year.
Revenue for the period rose 2.4 per cent to US$36.9 million from US$36 million a year prior, mainly generated by new leases and rental escalations from existing leases.
A new academy sports store at the Reit’s St Lucie West asset also contributed to the higher revenue as it commenced operations ahead of schedule in November 2023, added the manager.
Net property income (NPI) dipped 1.7 per cent year on year to US$25.4 million in the absence of contributions from Big Pine Center which was divested in August 2023.
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Distributable income declined 24 per cent to US$12.7 million, which the manager said was mainly due to higher interest costs.
As at end-June 2024, the Reit portfolio’s weighted average lease expiry (Wale) stood at 7.7 years with largely triple-net leases for grocery and necessity properties.
Gearing stood at 41.9 per cent with an interest coverage ratio of 2.5 times.
Gerard Yuen, chief executive of the manager, expects improved NPI contributions after store fit-outs for larger backfilled vacancies have been completed.
“Since the end of June, we have also executed several long-term lease renewals between 6-12 years with Lowe’s, TGI Fridays, and Crunch Fitness at Hudson Valley Plaza, Towne Crossing and Wallkill respectively. This will further enhance the overall portfolio WALE,” he added.
United Hampshire US Reit’s release of its financial results for H1 comes after its manager on Tuesday announced the completed divestment of two properties – Freestanding Lowe’s and Freestanding Sam’s Club Property – within its Hudson Valley Plaza asset in New York.
This was for a total consideration of US$36.5 million, which represented a 8.8 per cent premium above the book value of the properties as well as a 4.3 per cent premium to their independent valuation.
The consideration was also noted to be 17.5 per cent higher than the properties’ collective US$31.1 million purchase price.
In Wednesday’s results filing, the manager said it expects the divestment to also lower United Hampshire US Reit’s aggregate leverage to 39 per cent from 41.7 per cent as at end-2023, with an improved adjusted interest coverage ratio of 3.2 times versus 2.9 times.
It also intends to be “nimble, pro-active and focused” on strengthening the Reit’s income streams and balance sheet amid ongoing geopolitical headwinds and macroeconomic uncertainty.
Units of the Reit were trading US$0.015 or 3.5 per cent higher at US$0.445 as at 9.15am on Wednesday, after the results release.
