United Hampshire US Reit H1 DPU rises 4% to US$0.0209 on higher occupancy levels

[SINGAPORE] United Hampshire US Real Estate Investment Trust (Reit) on Wednesday (Aug 13) posted a 4 per cent increase in its distribution per unit (DPU) for the first half-year ended June to US$0.0209, from US$0.0201 in the year-ago period.

The distribution will be paid out on Sep 26, with its books closure date on Aug 22.

The rise in DPU came on the back of higher occupancy levels, an improved tenant mix and lower financing costs.

The Reit’s committed occupancy levels for its grocery and necessity portfolio increased to 97.2 per cent, from 96.3 per cent on Jun 30, 2024. As for the self-storage segment, its occupancy level was up on average at 95.3 per cent, from 94.35 per cent.

For H1 FY2025, United Hampshire US Reit secured five new leases and 10 lease renewals, totalling 82,395 square feet (sq ft).

The manager noted that key leasing activities include the development of a new 5,000 sq ft store on existing excess land in St Lucie West, which has been pre-leased to health insurance company Florida Blue for a 10-year period.

The new store is adjacent to another recent development project, the Academy Sports + Outdoors store, which opened in November 2023. The completion and opening of the new Florida Blue store is expected to take place in 2026.

Revenue for the period, however, declined 3 per cent to US$35.7 million from US$36.9 million in the corresponding period a year before. Net property income fell 5.6 per cent to US$24 million for H1 FY2025 from US$25.4 million in the same period a year prior.

This was mainly due to the absence of contributions from three divested properties – the Freestanding Lowe’s and Sam’s Club properties within Hudson Valley Plaza and the Albany Supermarket, which were divested in August 2024 and January 2025, respectively, said the manager of the Reit.

Distributable income increased by 2.4 per cent to US$13 million from US$12.7 million previously, largely on the back of reduced finance costs from lower interest rates and borrowings. This followed partial loan repayments made using proceeds from the aforementioned divestments.

Aggregate leverage stood at 38.9 per cent, with an interest coverage ratio of 2.59 times as at Jun 30, 2025. Its weighted average lease expiry was at 7.6 years, with a tenant retention rate of 90 per cent.

Moderate outlook amid tariff, labour market uncertainty

The manager of the Reit noted that its retail sales for the period reached US$4.2 trillion, marking a 3.6 per cent year-on-year increase. This reflected continued consumer resilience amid US gross domestic product growing at a better-than-expected annualised rate of 3 per cent for the three months ended Jun 30. Additionally, inflation was relatively stable at 2.7 per cent in June. 

However, economic uncertainties remain over the potential impact of the latest tariff policies, while the US unemployment rate in July is low at 4.2 per cent – though a softening in the labour market could be on the horizon.

The manager aims to remain “nimble and proactive” while continuing to strengthen United Hampshire US Reit’s income streams and balance sheet through asset enhancement and development initiatives, accretive acquisitions, and divestments. This comes as foot traffic for the strip centre sector has stayed resilient in the year to date, supported by strong demand for top-tier spaces.

On Aug 1, the Reit completed the acquisition of a grocery-anchored freehold property, Dover Marketplace, for US$16.4 million. The price represented a discount of about 4.8 per cent to the independent valuation of US$17.2 million as at Jun 30. The retail neighbourhood shopping centre is anchored by supermarket operator Giant, with other notable tenants including M&T Bank and sandwich fast-food chain Subway.

It marks the Reit’s third acquisition in Pennsylvania, and extends its footprint in the affluent and densely populated US North-east markets.

The manager noted, however, that supply growth is expected to remain muted over the next five years, amid an evolving macroeconomic backdrop.

Units of the Reit closed up 2.1 per cent or US$0.01 at US$0.48 on Tuesday.