United Hampshire US REIT's 2H FY24 Result Review

$UtdHampshReitUSD(ODBU.SI)$

Basic Profile & Key Statistics

Key Indicators

Performance Highlight

Gross revenue remained stable, but NPI declined slightly due to higher property expenses. Combined with rising finance costs, distributable income and DPU saw a YoY decline.

Divestment

On 14 August 2024, UHREIT divested Lowe’s and Sam’s Club within Hudson Valley Plaza at a premium above purchase price and book value. On 16 January 2025, UHREIT completed another divestment of Albany - Supermarket at valuation but above the purchase price.

Related Parties Shareholding

• REIT Sponsor's Shareholding: Less Favorable

• REIT Manager's Shareholding: Less Favorable

• Directors of REIT Manager's Shareholding: Favorable

Lease Profile

• Occupancy: Moderate

• Highest Annual Lease Expiry in 4 Years: Favorable

• WALE: Favorable

• Weighted Average Land Lease Expiry: Favorable

Debt Profile

• Adjusted Interest Coverage Ratio: Moderate

• Cost of Debt: Less Favorable

• Gearing Ratio: Moderate

• Fixed Rate Debt Proportion: Moderate

• Unsecured Debt Proportion: Less Favorable

• Highest Annual Debt Maturity in 4 Years: Less Favorable

• WADM: Moderate

Diversification Profile

• Top Geographical Weightage: Favorable

• Top Property Weightage: Moderate

• Top 5 Properties' Weightage: Favorable

• Top Tenant Weightage: Moderate

• Top 10 Tenants' Weightage: Less Favorable

Key Financial Metrics

• Property Yield: Favorable

• Operating Distributable Income over Manager's Fees: Favorable

• Operating Distributable Income on Capital: Favorable

• Operating Distributable Income Margin: Moderate

• Operating Distribution Proportion: Favorable

DPU Breakdown

• TTM Distribution Breakdown:93.5% from Operation6.5% being Retained

Trends (Up to 10 Years)

• Uptrend: Operating Distributable Income over Manager's Fees

• Slight Uptrend: Committed Occupancy, Top 5 Properties' Weightage

• Flat: NAV per Unit, Property Yield

• Slight Downtrend: DPU from Operations, Operating Distribution Proportion

• Downtrend: Adjusted Interest Coverage Ratio, Top 10 Tenants' Weightage, Operating Distributable Income on Capital, Operating Distributable Income Margin

Price Range & Relative Valuation Metrics

• Dividend Yield: Below -1SD for 1y, 3y & 5y

• P/NAV: Above +1SD for 1y; Average for 3y & 5y

Author's Opinion

Compared to the previous half-year, both gross revenue and NPI have declined due to the divestment of Lowe’s and Sam’s Club within Hudson Valley Plaza. However, income available for distribution has improved slightly due to lower finance expenses, straight-line rent adjustments, and lease commission amortization. Coupled with a slightly lower proportion of retention, DPU has improved slightly. On the debt front, around 17% of UHREIT’s debt matures in December 2025.

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*Disclaimer: The information presented on this blog is for educational and informational purposes only. The materials, including research and opinions, are based solely on my own findings and should not be considered as professional financial advice or a definitive statement of fact. I cannot guarantee the accuracy, completeness, or reliability of the information provided. I shall not be held liable for any errors, omissions, or losses that may occur as a result of using the information presented on this blog. It should be noted that the information presented on this blog does not constitute a buy, sell, or hold recommendation for any security. It is crucial to conduct your own thorough research and due diligence before making any investment decision.