United Hampshire US REIT reports FY2023 DPU of 4.79 US cents, 18.5% lower y-o-y

Felicia Tan
3-min read

2HFY2023 DPU fell by 27.9% y-o-y to 2.14 US cents.

United Hampshire US REIT has reported a distribution per unit (DPU) of 4.79 US cents (6.4 cents) for the FY2023 ended Dec 31, 2023, 18.5% lower y-o-y.

DPU for the 2HFY2023 fell by 27.9% y-o-y to 2.14 US cents as the REIT manager elected to receive 100% of its base fee in cash instead of units. The move was made to “preserve unitholder value and minimise unit base dilution” says the manager.

Including the retained distributable income of US$1.3 million as capital reserves, 2HFY2023 net income available for distribution fell by 18.2% y-o-y to US$13.8 million, bringing the full year’s distributable income to US$30.4 million, 8.2% lower y-o-y.

On a like-for-like basis, the adjusted DPU for the FY2023 would have been at 5.54 US cents, 5.8% lower y-o-y, due to higher interest expenses.

For the FY2023, gross revenue was up by 7.1% y-o-y to US$72.2 million mainly from contributions from new leases and rent escalation from the REIT’s existing leases in Upland Square which was acquired in July 2022 and the new Academy Sports store at St Lucie West which opened in November 2023.

Net property income (NPI) rose by 4.9% y-o-y to US$50.6 million as property expenses were higher y-o-y.

As at Dec 31, 2023, portfolio occupancy stood at 97.4% while weighted average lease expiry (WALE) stood at 7.1 years. Aggregate leverage stood at 41.7% with an interest coverage ratio of 2.9 times as at the end of the year.

As at Dec 31, 2023, the REIT’s portfolio valuation rose by 4.7% y-o-y on a like-for-like basis to US$763.4 million.

“We have delivered a commendable set of results in 2023, well supported by our high-quality portfolio. We are delighted that our new 63,000 sf store for Academy Sports at Port St Lucie was completed ahead of schedule and opened in November 2023. Our strong leasing momentum in FY2023 has continued into 1QFY2024 allowing us, over the past two months, to execute several significant new or renewal leases with major tenants including Price Chopper, Home Depot, Dick’s Sporting Goods and LA Fitness,” says Gerard Yuen, CEO of the manager.

“As part of our proactive portfolio and asset management strategy, we divested Big Pine Center at a 7.7% premium to its purchase price. This demonstrates the continued demand for strong performing grocery & necessity properties. We will selectively consider opportunistic divestment opportunities to reduce gearing or to re-deploy the capital into better yielding asset enhancement opportunities or acquisitions,” he adds.

Unitholders will receive their 2HFY2023 distributions on March 28.

Units in UHREIT closed 0.5 cents higher or 1.1% up at 46 US cents on Feb 21.

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