United Hampshire US REIT (UHREIT) has released its first half results. The top draw is the REIT has maintained dividend in the 8% yield range.
Here's a summary of the results:
(i) Revenue down due to divestments
(ii) Distributable income increased by 4% to 2.09 US cents for the last 6 months
(iii) DPU Yield of 8-9% at current share price
Business segments of Grocery and Self Storage
On virture it is a REIT focusing on tenants providing basic essential services, its revenue does not fluctuate much. Occupancy rate has been strong staying at above 95%. The REIT leases have in built annual escalation which allows an increase of NPI per property.
Interest Expense
This is the main item which will determine the directions of its dividend. As of 1H2025, debt weighted interest rate is 5.13%, a decrease from 6 months ago. UHREIT debt profile is all pegged to USA SOFR and its swaps expire in end 2026, I expect 4 rate cuts from now to then, which will put interest at 3%. Hence, I expect interest expense to start lowering from 2026. This leads to.......
DPU Growth
With annual rental escalations and forecasted lower interest expenses from 2026, UHREIT DPU should grow from its current annualised 4.1 cents. This puts it at a high 8 to 9% dividend yielder. The recent acquistion of Dover Marketplace should result in a higher DPU as well.
At 47.5 US cents, this is a steal and a stock to include to boost your dividend returns. It is a definite buy and I have a target price of 70 US cents.
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