The Edge Singapore Thu, Jun 09, 2022
United Hampshire US REIT is acquiring a new asset for US$85.7 million, 0.3% off an independent valuation.
The asset, the Upland Square Shopping Centre, will help increase its pro forma distribution per unit by 2.13% from 6.23 US cents from 6.1 US cents, and to also grow its portfolio value by 6% to US$730.1 million.
“Given its larger distributable income base, Upland Square is set to substantially enhance UHREIT’s income visibility and resilience,” says Robert Schmitt, CEO of the REIT’s manager.
This acquisition is the second for UHREIT in Pennsylvania, further extending its footprint in the affluent Eastern seaboard. The REIT plans to pay for this acquisition using proceeds from a recent divestment, plus internal funds and a loan.
The freehold property has a net lettable area of approximately 400,674 sq ft, with a committed occupancy rate of 100% and a long forward committed WALE of 6.3 years.
The property has 35 tenants, including the anchor, Giant by Ahold Delhaize, a leading supermarket operator in the Mid-Atlantic region of the US.
The acquisition will lift the committed occupancy of UHREIT’s portfolio to 96.6%, its highest since its IPO in March 2020.
Post acquisition, UHREIT’s contribution from its top 10 tenants will reduce from the current 60.2% to 56.8%, providing increased tenant diversification and stabilising the portfolio’s income.
The enlarged portfolio will also benefit from lower lease expiries in 2023 and 2024, with less than 10% of leases due for renewal every year from 2023 to 2026.
There is minimal impact on portfolio WALE, which will decrease marginally from 7.8 years to 7.7 years.
UHREIT closed June 9 at 61 US cents, unchanged for the day, and down 9.7% year to date.