United Hampshire US REIT is planning a distribution per unit of 2.65 US cents for 1HFY2023, down from 2.91 US cents.
The lower distribution is because of the manager's decision to retain distributable income of US$1.5 million as capital reserve for asset enhancement and development initiatives such as the new Academy Sports + Outdoors store at Port St. Lucie.
Without this retained amount, UHREIT would be able to maintain its DPU at 2.91 US cents.
For the six months ended June, UHREIT generated a net property income of US$25.8 million, up 14% over 1HFY2022's US$22.7 million. Gross revenue was up 13.3% y-o-y to US$36 million.
In 1H 2023, UHREIT signed 22 new and renewal leases totaling 331,175 sq ft, bringing committed occupancy for its groceries and neccessity properties to a record of 97.9% as at June 30, along with a long WALE of 7.2 years. Its self-storage properties in 1H 2023 remained resilient and occupancy increased from 1Q 2023.
UHREIT plans to divest Big Pine Center in Florida for US9.9 million, which is a 3.7% premium over the Dec 31 2022 appraised value of US$9.5 million, and 7.7% premium over the purchase price of US$9.2 million.
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The REIT plans to channel the divestment proceeds to repay debt, finance capital expenditure and asset enhancement initiatives and/or new investments.
UHREIT owns 21 predominantly freehold so-called groceries and necessity properties and two self-storage properties. These properties are primarily in the East Coast of the US, takes up 3.8 million sq ft in net lettable area and has a carrying value of US$742.7 million.
“We are pleased to deliver another resilient performance in 1H 2023, backed by the strong leasing momentum at our existing properties and the continued contribution from our latest acquisition – Upland Square," says CEO of the manager Gerard Yuen.
Given how US rates will be held higher for longer, UHREIT says it will continue to focus its efforts on optimising the portfolio and strengthening its income streams through asset enhancement and rejuvenation initiatives to deliver long-term value to all unitholders.
UHREIT closed at 42 US cents on Aug 11, down 1.18% for the day, and down 6.67% year to date.
