Just as I had expected, UtdHamsphire REIT delivered a good 1H results.
Dividends declared was 2 US Cents.
Retail Business is Doing Well
Its stripe malls have continued to provide increasing rents. With the low supply of stripe malls in USA, Utd Hampshire REIT will continue to have a high occupancy rate. Self storage business has remained strong as well.
Yesterday, the REIT sold one of its property at 8% above valuation which indicates its real book value of its properties is indeed above the 72 US cents listed. Given how cash generative its assets are and that it is in an undersupplied USA property sector, it is likely the real NAV is US 75 cents
Interest Expense
Interest cost for the REIT is now at 4.93%. In my view, if interest costs starts to go down from now, UtdHampshire REIT will be reporting stronger results. There is no refinancing risk until 2026.
9.5% Dividend now, 11% Dividend Next Year
On the tail wind of falling interest rates and rising rental revenue, I expect Utdhampshire REIT to report a 5% increase in net profits this year. This means dividends will grow. All in all, this is a very good result. I will not be surprised if its share prices will move up 50-70% over the next few months on the basis of re-rating due to its sustainable business model and riding on the tailwind of falling interest rates in USA which makes its cost of debt much cheaper.
Leverage is expected to fall as well post sale of it's asset yesterday
At expected dividend of US 4 cents per year, this stock is at least worth US 72 cents
Overall, this REIT is a good buy for any investor.
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