United Hampshire US REIT Review @ 16 May 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 Highlight

Gross revenue and NPI are lower than forecast for 1.9% and 1.8% respectively but distributable income is 1.3% higher than forecast.

ST. Lucie West development has completed ahead of schedule and the new Publix store is open on 15th Apr 2021. 

Related Parties Shareholding

• REIT sponsor's shareholding is low at 8.93%
• REIT manager's shareholding is low at 0.06%
• Directors of REIT manager's shareholding is moderate at 0.13%

Lease Profile

• Occupancy is moderate at 93.9%
• WALE is long at 8.1 years
• Highest lease expiry within 5 years is low at 10.3% which falls in 2023
• Weighted average land lease expiry is long at 97.34 years 

Debt Profile

• Gearing ratio is moderate at 37.5%
• Cost of debt is high at 2.79%
• Fixed rate debt % is high at 70.6%
• All debts are secured debts
• WADM is slightly long at 3.2 years
• Highest debt maturity within 5 years is high at 45.6% which falls in 2023
• Interest coverage ratio is high at 6.6 times

Diversification Profile

• Top geographical contribution is low at 34.8%
• Top property contribution is low at 13.7%
• Top 5 properties contribution is low at 43%
• 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 6.5% 
• Management fees over distribution is competitive at 10.2% in which unitholders receive S$ 9.80 for every dollar paid 
• Distribution on capital is high at 5%
• Distribution margin is moderate at 47%
• 13.6% of the past 3 quarters distribution is from income support (assume same amount for 1Q 2021)

Trends

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

Relative Valuation

• Dividend Yield - Latest 4 quarters DPU @ 6.018 cents / average yield @ 10.07% = US$ 0.60 
• Price/NAV - NAV @ US$ 0.75 x average P/NAV @ 0.78  = US$ 0.585

Author's Opinion

Favorable	Less Favorable
Long WALE	Low REIT Sponsor's Shareholding
Well Spread Lease Expiry	Low REIT Manager's Shareholding
Long Weighted Average Land Lease Expiry	High Cost of Debt
High Fixed Rate Debt	0% Unsecured Debt
High Interest Coverage Ratio	Concentrated Debt Maturity
Low Top Geographical Contribution	High Top Tenant & Top 10 Tenants Contributions
Low Top Property & Top 5 Properties Contributions	High Income Support %
High Property Yield
Competitive Management Fees
High Distribution on Capital
Interest Coverage Ratio Uptrend
Property Yield Uptrend

UHREIT performance remains resilient as it focuses on Grocery & Necessity retail properties. And it would benefit from the opening of ST. Lucie West and the retail sales recovery in U.S.

For more information, you could refer to:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and Detail of Singapore REIT

REIT Analysis - List of previous REIT analysis posts

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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 and 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.