United Hampshire US REIT (UHREIT) has reported gross revenue of US$54.7 million ($72.24 million) for 9M2024, 0.6% higher y-o-y. Gross revenue for the 3QFY2024 ended Sept 30 was 2.9% lower y-o-y, at US$17.9 million.
The manager of the REIT says the growth was supported by new leases and rental escalations from existing leases, as well as revenue generated from a new Academy Sports + Outdoors store at its St. Lucie West asset in Florida.
However, 9M2024 net property income (NPI) of US$37.4 million was 3.4% lower y-o-y. Management attributes the decrease to the absence of contribution from Big Pine Center and the two freestanding Lowe’s and freestanding Sam’s Club at Hudson Valley, which had been divested in August 2023 and August 2024 respectively.
In addition, 9M2024 NPI was also impacted by “ongoing tenant transitions”, primarily Trader Joe’s at Lynncroft. which is targeted to open later this month.
3QFY2024 NPI was 6.7% lower y-o-y, at US$12.0 million.
9M2024 distributable income of US$18.7 million was 15.1% lower y-o-y mainly due to higher interest costs. UHREIT’s manager has elected to receive management fees in cash since 3QFY2023, amounting to some US$0.8 million in 9M2023 and some US$2.1 million in 9M2024.
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The distributable income is computed before US$1.5 million and US$1.0 million capital reserve retention declared in 1H2023 and 1H2024 respectively.
Meanwhile, distributable income fell 14.6% y-o-y to US$6.0 million in 3QFY2024. UHREIT typically declares distributions semi-annually.
As at Sept 30, UHREIT’s Grocery & Necessity portfolio recorded committed occupancy of 97.6% with minimal leasing risk, given that only 0.3% and 3.7%% of leases are set to expire in 2024 and 2025 respectively.
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Weighed average lease expiry (WALE) has increased further to 7.9 years, up from 7.7 years in the previous quarter.
“Most of these leases are triple-net, with built-in rental escalations over the lease terms, which help offset inflationary pressure and increased costs,” says the manager.
For UHREIT's Self-Storage properties, occupancy rates at Carteret and Millburn Self-Storage were 94.8% and 92.5% respectively as at Sept 30.
UHREIT has no refinancing requirements until November 2026. Furthermore, there is no interest swap maturing until December 2026. UHREIT has a weighted average debt maturity of 2.6 years, and 73.6% of the total loans are either fixed rate loans or floating rate loans that have been hedged to fixed rates.
For the quarter ended Sept 30, the weighted average interest rate was 5.02%, the aggregate leverage ratio was 39.9%, and the interest coverage ratio was 2.5 times.
Units in UHREIT closed 0.5 US cents higher, or 1.1% up, at 46 US cents.
