UNITED Hampshire US real estate investment trust’s (United Hampshire US Reit) distributable income fell 19 per cent year on year to US$6.4 million, due to higher interest expenses and the refinancing of a maturing loan.
On Friday (May 10), its manager said the distributable income decline was also partly due to less-favourable new interest-rate hedges which replaced maturing hedges.
Gross revenue for the quarter grew 2.3 per cent to US$18.5 million, while net property income was down 1.3 per cent to US$12.7 million.
United Hampshire US Reit’s manager noted a “resilient” operational performance for the quarter, mainly due to new leases and rental escalations from existing leases.
This was in addition to rental revenue contributions from a new academy sports-branded store at its St Lucie West asset, offset in part by the absence of rental revenue from Big Pine Center which the Reit divested in August 2023.
As at end-March 2024, the Reit’s grocery and necessity portfolio of properties had a committed occupancy rate of 95.7 per cent.
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The average occupancy at the self-storage portfolio was 94.2 per cent.
Its overall portfolio weighted average lease expiry stood at 7.9 years, up from 7.1 years in Q4 2023.
The manager said most of the leases were “substantially triple-net”, with built-in rental escalations over the lease terms, which had helped to offset inflationary pressures and increased costs.
It also noted that the Reit achieved eight lease renewals spanning over 318,000 square feet in Q1.
For the quarter ended March 2024, the Reit’s weighted average interest rate was 4.66 per cent, while its gearing stood at 42.2 per cent, with an interest coverage ratio of 2.6 times.
Citing ongoing geopolitical tensions and persistent inflation, the Reit manager said a higher-for-longer interest rate environment “remains a possibility”.
“The manager will be nimble, proactive and focused on strengthening United Hampshire US Reit’s income streams and balance sheet by evaluating asset enhancement and development initiatives, as well as selective divestment and capital recycling and optimisation opportunities,” it added.
Units of United Hampshire US Reit : ODBU 0% ended flat at US$0.425 on Thursday.
