The manager of United Hampshire US REIT (UHREIT) has announced the completion of the divestment of the Albany-Supermarket in New York, US, according to a Jan 17 release.
The REIT, on Jan 16 (US time), entered a sale and purchase agreement with Agree Development LLC for the divestment of the Albany-Supermarket at a total sale price of US$23.8 million ($32.5 million).
The asset is a freehold grocery store located in Albany, New York, with a total net leasable area of 65,000 sq ft.
According to UHREIT, the proposed sale price is equivalent to the asset’s latest valuation and is around US$900,000 higher than the purchase price of US$22.9 million.
The manager of UHREIT notes that the divestment is in-line with the manager’s pro-active portfolio management strategy to maximise the operational performance of assets and capitalise on opportunities to improve financial flexibility. This will also enable the manager to pursue growth opportunities to enhance the resilience, diversification and value of UHREIT’s portfolio for unitholders.
Furthermore, the divestment provides UHREIT with the opportunity to strengthen its capital structure and enhance its financial flexibility. The proceeds will, amongst others, provide the manager with financial flexibility to pare down bank borrowings to improve UHREIT’s average leverage ratio.
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The divestment, together with the divestment of Freestanding Lowe’s and Freestanding Sam’s Club Property within Hudson Valley Plaza which was completed in August 2024, is expected to lower UHREIT’s aggregate leverage ratio from 41.7% as at Dec 31, 2023, to 37.2% on a pro-forma basis, and improve its adjusted interest coverage ratio from 2.9 times for the FY2023 ended Dec 31, 2023, to 3.5 times on a pro-forma basis.
It also aligns with the manager’s portfolio optimisation and capital recycling strategy. The lease with Price Chopper Operating at the Albany-Supermarket was recently extended by a further six years to Dec 31, 2038, and the divestment further demonstrates the manager’s ability to maximise and unlock capital value for unitholders at an optimal stage of the property’s life cycle.
With the divestment of the Albany-Supermarket, UHREIT’s net property income, income available to shareholders and number of units will be reduced to US$49.4 million, US$27.6 million and 581.7 million units respectively. On a pro-forma basis, distribution per unit (DPU) will drop marginally to 4.78 US cents from 4.79 US cents pre-divestment.
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Meanwhile, UHREIT’s net asset value (NAV) will decrease to US$430.8 million, resulting in an unchanged pro-forma NAV per unit of 74 US cents.
Units in United Hampshire US REIT closed 0.5 US cents lower or 1.04% down at 47.5 US cents on Jan 17.
