UnitedHampshire Retail REIT Year End: 8+% Dividend with Potential Capital Gains. A Top Pick

 Unitedhampshier ("UHREIT") has announced its year end results. In summary:

• Leverage is down to 38.9%
• Annual Dividend is 4.06 US Cents
• Rental Escalation
• Interest Coverage Ratio of 2.5 times

Outlook

Impressive results throughout with revenue growing due to rental escalation. Its cost of interest seems to have peaked with interest now falling for 4Q.

Overall, I expect UHREIT to increase dividend due to higher rentals + possibility of the REIT manager electing to be paid in Units should share price hit 60 US cents.

Capital Gain

Often people says investing in REIT is for the dividends and not capital gains, however UHREIT may buck the trend- it offers both. With greater appreciation by investors of the resilience of its sub sector (groceries), investors will  be aware of the resilience in its dividends and find the REIT a steal at 48 US Cents (8.4% yield). I do think a re-rating will occur where it becomes a 7% yielder. 

In addition, I forsee with interest rate falling and revenue growing, the DPU of UHREIT will be 4.1 US cents for 2025 despite the divestment of 1 property. At forward 7% yield, I am guiding for UHREIT to be 64 US cents in 2025. 

UHREIT is exceptional and will best any Singapore property. It is going be a dividend yielder + capital gain giant for 2025. It should be worth its NAV of 75 US cents because of the annual profits it is clocking. With the fall in interest rates, its dividend will start to rise from its annual 4.06 US cents dividend.