United Hampshire US REIT reports 7.6% increase in 1QFY2023 distributable income to US$8.8 mil

Bryan Wu
3-min read

Gross revenue an NPI for the period rose 11.8% and 13.5% y-o-y, to US$18.1 million and US$12.9 million respectively.

United Hampshire US REIT (UHREIT) ODBU has reported distributable income of US$8.8 million for 1QFY2023 ended March 31, up 7.6% over the corresponding period last year.

Gross revenue and net property income (NPI) for the period rose 11.8% and 13.5% y-o-y, to US$18.1 million and US$12.9 million respectively.

The REIT, which owns a portfolio of malls and self-storage spaces in the US, says the resilient performance of UHREIT’s existing properties, coupled with the income from its third and largest acquisition, Upland Square Shopping Center in July 2022, contributed positively to 1QFY2023 distributable income.

UHREIT’s leasing momentum remained healthy in 1QFY2023, with the execution of seven new and renewal leases totalling 217,089 sq ft.

The committed occupancy of its grocery and necessity properties inched ahead to 97.0% from its already high base of 96.9% as at Dec 31, 2022, backed by a “diversified, cycle-agnostic tenant base” that provides day-to-day necessity goods and services.

The grocery and necessity portfolio enjoys a long weighted average lease expiry (WALE) of 7.4 years with minimal leasing risk as only 2.1% of the leases are expiring in 2023. On top of this, the majority of the leases for this segment of its portfolio are triple net with built-in rental escalations over the lease terms.

Says Gerard Yuen, CEO of UHREIT Management: ““In particular, we are pleased to note that Walmart has exercised its 5-year renewal option at Hudson Valley Plaza. Walmart, one of the largest and most well-known retailers in the U.S., is our sixth largest tenant by Gross Rental Income.

“This latest lease extension is a strong testament to the attractiveness of UHREIT’s properties and the close relationship that we have built with our tenants, enabling them to maximise their omni-channel distribution capabilities at our open-air shopping centres,” he adds.

According to UHREIT, a recent survey by the Food Industry Association on US grocery shopper trends revealed that fewer grocery shoppers are cutting back on items purchased despite higher prices. To combat inflation, grocery shoppers are visiting more stores and seeking deals to stretch their dollars, but are less likely to cut back on the number of items purchased compared to 6 months or a year ago.

As for UHREIT’s self-storage portfolio, performance has also remained resilient with occupancies continuing to hold steady. As of March 31, the occupancy rate for its Carteret and Millburn properties stood at 91.7% and 92.6% respectively.

Following a very strong performance in 2022, recent analyst reports suggest that storage demand drivers have normalised with a return to seasonality and lower overall mobility throughout the US. However, UHREIT’s self-storage occupancy rates remain high, owing to the undersupply of self-storage facilities in the New York Metro Area.

With the concerns over the slowing US economy and high interest rates, UHREIT says it will continue to focus its efforts on optimising the portfolio and strengthening its income streams through asset enhancement initiatives to deliver long-term value to its unitholders.

Units in UHREIT closed 0.5 US cents or 1.16% down at 42.5 US cents.

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