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Friday, November 26, 2021

United Hampshire US REIT Review @ 26 November 2021

Basic Profile & Key Statistics

United Hampshire US REIT (UHREIT) invests in Retail and Logistics (self-storage) properties which currently owns 24 properties in U.S.

Performance Highlight

Performance has improved YoY as compared to 3Q 2020.

The anchor tenant's sales performance is a mixed one as compared to the past year. 

For self-storage properties, Carteret and Millburn continue to maintain a high level of occupancy while occupancy of Elizabeth and Perth Amboy is increasing quarter by quarter.

Acquisition for both Penrose Plaza and Colonial Square have completed in November. This acquisition is expected to be slight DPU accretive. 

Related Parties Shareholding

  • REIT sponsor's shareholding is low at 0.07%
  • REIT manager's shareholding is low at 0.003%
  • Directors of REIT manager's shareholding is low at 0.073%

Lease Profile

  • Occupancy is slightly high at 95.5%
  • WALE is long at 8.1 years
  • Highest lease expiry within 5 years is low at 9.6% which falls in 2024
  • Weighted average land lease expiry is long at 97.31years

Debt Profile

  • Gearing ratio is moderate at 37.6%
  • Cost of debt is high at 2.77%
  • Fixed rate debt % is high at 96.7%
  • All debts are secured debts
  • WADM is slightly low at 2.7 years
  • Highest debt maturity within 5 years is high at 43.7%, which falls in 2023
  • Interest coverage ratio is high at 6.5 times

Diversification Profile

  • Top geographical contribution is low at 33.2% 
  • Top property contribution is low at 14.3% 
  • Top 5 properties contribution is low at 43.5% 
  • Top tenant contribution is high at 13.4% 
  • Top 10 tenants contribution is high at 66.4%

Key Financial Metrics

  • Property yield is high at 6.7% 
  • Management fees over distribution is low at 10.2% in which unitholders receive US$ 9.80 for every dollar paid 
  • Distribution on capital is high at 5.1%
  • Distribution margin is slightly low at 46.5%
  • 12.8% of the TTM DPU is from income support

Trends

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

Relative Valuation

  • P/NAV - Average for 1y, Above average for 3y
  • Dividend Yield - Average for 1y, below Average for 3y

Author's Opinion

Favorable Less Favorable
Long WALELow REIT Sponsor's Shareholding
No Major Lease Expiry within 5 YearsLow REIT Manager's Shareholding
Long Weighted Average Land Lease ExpiryLow Directors of REIT Manager's Shareholding
High Fixed Rate Debt %High Cost of Debt
High Interest Coverage Ratio0% Unsecured Debt
Low Top Geographical ContributionConcentrated Debt Maturity
Low Top Property & Top 5 Properties ContributionsHigh Top Tenant & Top 10 Tenants Contributions
High Property YieldHigh Income Support %
Competitive Management Fees
High Distribution on Capital
Interest Coverage Ratio Uptrend
Property Yield Uptrend

UHREIT performance remains resilient and not affected by COVID-19. It has completed its maiden acquisition of 2 properties in November which would improve its performance moving forward.


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*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.

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