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REITs investment & personal finance


Monday, March 01, 2021

United Hampshire US REIT Review @ 1 March 2021

Basic Profile & Key Statistics

United Hampshire US REIT (UHREIT) invests in Retail and Logistics (self-storage) properties which currently owns 22 properties in U.S.

Performance Review

For 2H 2020, Gross revenue and NPI are slightly lower than forecast but distributable income and DPU are higher than forecast.
Total US$ 3.27 million is recognized in 2020, the balance of US$ 3.25 million would be utilized in 2021 and 2022 as per IPO prospectus.

Lease Profile

  • Occupancy is moderate at 94.7%
  • WALE is long at 8.2 years
  • Highest lease expiry within 5 years is low at 10.6% which falls in 2024
  • Weighted average land lease expiry is low at 97.34 years


Debt Profile

  • Gearing ratio is moderate at 36.2%
  • Cost of debt is moderate at 2.8%
  • All debts are fixed rate debts
  • All debts are secured debts
  • WADE is long at 3.56 years 
  • Highest debt maturity within 5 years is high at 42.1% is which falls in 2023. 
  • Interest coverage ratio is high at 6.3 times


Diversification Profile

  • Top geographical contribution is low at 34.7%
  • Top property contribution is low at 13.5% 
  • Top tenant contribution is high at 13.5% 
  • Top 10 tenants contribution is high at 66.7% 

Key Financial Metrics

  • Property yield is high at 6.4%
  • Management fees over distribution is competitive at 10.2% in which unitholders receive US$ 9.80 for every dollar paid 
  • Distribution on capital is high at 5%
  • Distribution margin is moderate at 47.1% 
  • 13.7% of the past 3 quarters distribution is from income support

Trends

  • Uptrend - Property Yield, Distribution on Capital
  • Slight Uptrend - DPU, Interest Coverage Ratio 
  • Flat - NAV per Unit, Distribution Margin

2Q 2020 DPU is annualized to 3 months for better comparison.


Relative Valuation

  • Dividend Yield - Annualized past 4 quarters DPU @ 5.987 cents / average yield @ 10.31% = US$ 0.58
  • Price/NAV - NAV @ US$ 0.757 x average P/NAV @ 0.75 = US$ 0.57


Author's Opinion

 Favorable Less Favorable
Long WALE0% Unsecured Debt
Well Spread Lease ExpiryConcentrated Debt Maturity
Long Weighted Average Land Lease ExpiryHigh Top Tenant & Top 10 Tenants Contributions
Long WADEHigh Income Support
High Interest Coverage Ratio 
Low Top Geographical Contribution 
Low Top Property Contribution 
High Property Yield 
Competitive Management Fees 
High Distribution on Capital 
Property Yield Uptrend 
Distribution on Capital Uptrend

UHREIT focuses on Grocery & Necessity retail properties which are less vulnerable to the cyclical shift in the economy. Although UHREIT is just listed less than a year, its fundamentals and performance are strong and unaffected by COVID-19 situation.


For more information, you could refer to:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview of Singapore REIT

REIT Analysis - List of previous REIT analysis posts

REIT-TIREMENT Patreon - Support this blog as a Patron and get SREITs Dashboard PDF

REIT Investing Community - Facebook Group where members share and discuss REIT topic


*Disclaimer: Materials in this blog are based on my research and opinion which I don't guarantee accuracy, completeness, and reliability. It should not be taken as financial advice or a statement of fact. I shall not be held liable for errors, omissions as well as loss or damage as a result of the use of the material in this blog. Under no circumstances does the information presented on this blog represent a buy, sell, or hold recommendation on any security, please always do your own due diligence before any decision is made.

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