The manager of United Hampshire US REIT ODBU has reported a distributable income of US$6.4 million ($8.7 million) for the 1QFY2024 ended March 31, 27.3% lower y-o-y.
The drop in distributable income was mainly due to higher interest expense, the refinancing of a maturing loan and less favourable new interest hedges which replaced maturing hedges. The REIT’s manager also opted to receive its management fee of US$0.7 million in cash for the 4QFY2023 and 1QFY2024. Otherwise, distributable income for the quarter would have been at US$7.1 million.
Gross revenue for the 1QFY2024 rose by 2.3% y-o-y to US$18.5 million thanks to new leases and rental escalations from existing leases. The revenue growth was also contributed by the newly-completed Academy Sports + Outdoors store at St Lucie West. The store began operating ahead of schedule in November 2023.
Net property income (NPI), however, fell by 1.3% y-o-y to US$12.7 million, partly due to the absence of contribution from Big Pine Center, which was divested in August 2023.
As at March 31, portfolio occupancy stood at 95.7%, down from 97.4% in the 4QFY2023. At the same time, the REIT’s weighted average lease expiry (WALE) stood at 7.9 years, up from 7.1 years from strong leasing momentum and tenant retention rate of 92%.
As at March 31, United Hampshire US REIT’s aggregate leverage stood at 42.2% with an interest coverage ratio of 2.6 times.
See also: Kimly reports higher FY2024 revenue but earnings down on higher depreciation and other costs
On the same day, the REIT announced that it has signed a leading national grocery chain as its new anchor tenant in Lynncroft.
“This will not only increase occupancy at the property to almost 100% but will also enhance the overall attractiveness and footfall at the property,” says Gerard Yuen, CEO of the manager.
“The demand for space in grocery-anchored strip centres remains robust with vacancy rates near all-time lows. There is also minimal new supply expected due to high construction costs. Our strong leasing momentum and contributions from asset enhancement initiatives and new developments such as the Academy Sports store will help offset some of the impact from higher interest rates,” he adds.
Units in United Hampshire US REIT closed flat at 42.5 US cents on May 9.
