United Hampshire US REIT (UHREIT) saw 4.1% y-o-y growth in distributable income of US$7.7 million for 3QFY2021 ended September.
Supported by a resilient portfolio, gross revenue and net property income (NPI) for 3QFY2021 rose 5.8% and 6.1% y-o-y to US$13.6 million and US$10.3 million respectively.
In its business update for the third quarter, CEO Robert Schmitt highlights two DPU-accretive acquisitions in the US: Penrose Plaza in Pennsylvania and Colonial Square in Virginia. “During the quarter, we announced our very first acquisitions since IPO, strategically adding two dominant grocery-anchored freehold assets to our high-quality portfolio in the Eastern seaboard, where we have strong familiarity."
The acquisitions are expected to complete and contribute to UHREIT’s portfolio from 4QFY2021.
UHREIT notes that it has "one of the longest weighted average lease expiries (WALEs) among S-REITs", at 8.1 years.
See: 'Buy' United Hampshire US REIT on latest accretive acquisitions
It also notes "strong leasing trend" with execution of 32 new and renewal leases, with leases expiring in 2022 reduced from 8.5% to 3.0%. In addition, UHREIT notes "low leasing risk" with only 0.5% of leases due in 2021.
Among its sectors, Grocery & Necessity Properties achieved occupancy of 95.5% and strong rental collections of 99.0% YTD to September.
Self-Storage leasing activities and rental rates were affected by the pandemic and anti-price gouging law. However, occupancies have been trending upwards after Covid-19-related lockdown guidelines were loosened, says UHREIT.
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The Higher distributable income was attributable to finance costs savings and compensatory stipulated damage of US$0.7 million received in 1HFY2021.
As at Sept 30, UHREIT maintains a leverage of 37.6%, well below the aggregate leverage limit of 50.0% set by the Monetary Authority of Singapore. UHREIT also has an undrawn US$12.5 million committed revolving credit facility.
96.7% of UHREIT’s total debt was at fixed rates. The weighted average interest rate is 2.77% and interest coverage ratio stood at 6.5 times. The weighted average debt maturity is 2.7 years with no refinancing requirements until 2023.
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For the acquisition, a placement of new issues was launched on Oct 5. "The Manager received strong demand from both existing unitholders and new investors. In view of the strong demand, the Placement Upsize was exercised in full with approximately US$35.0 million raised. In relation to the Private Placement, UHREIT announced an advanced distribution estimated to be between 1.73 and 1.77 US cents, which will be paid to unitholders," reads the press release.
Units in UHREIT closed 0.5 US cents lower, or 0.73% down, at 67.5 US cents on Nov 10.
