United Hampshire US REIT

[VincentWong]

Despite the Interest rate remains higher for longer, UH REIT is one of the very few, if not the only REIT got higher property value, and this is due to trends like:

• Historically low new retail development
  
• New store openings outpacing store closings
  
• Post Pandemic Lifestyle: Shift toward first ring suburbs in US
  

• The physical store is now a last-mile logistics hub for e-commerce, fulfillment & distribution
  
• Trends that shift from shopping mall to Open-Air Grocery Anchored Centers
  
• Higher trip frequency driven by necessities
  

learn more about the data at the WSJ news: Strip Malls Are the New King of Retail Real Estate

UH REIT has a portfolio of 20 grocery & necessity properties and a pair of self-storage facilities along the U.S. east coast. These grocery & necessity properties are what market insiders commonly refer to as "Big-box" - they're single-story, open-air, and boast ample parking space. it has a client list for these Big-box properties includes retail giants like Walmart and Target.

It is traded at a office-like distribution yield of 11%. which I think is very undervalued. high occupancy rate at 97.2%, properly hedge interest rate. I'm can't see why it will appreciate further. 

btw, you can meet its investor relation and its CEO in person at the REIT Symposium on 11 May. he is attending the event according to https://reitsymposium.com/speakers/.

they normally host half of S-REIT there annually. probably can ask him some questions there.

[CY09]

An interesting retail play REIT I have come across in USA. Unitedhampshire operates mainly stripe mall REITs whose tenants profile are similar to what you find at HDB heartland malls or similar to that of LINK REITs' HK profile. Basically tenants which provide grocery essentials or discount store.

In terms of property tenancy profile, the REIT has 95% freehold and 5% leasehold which expires in 15 years times. and tenancy period is 8 years which suggests tenants are in for the long run. The REIT has a high portfolio occupancy rate of 96%

Currently the REIT is a 9% dividend yielder with approx US 2 cents per bi-annual basis (at current price of 44 US cents). Leverage ratio is relatively low at 38.9%.

It seems to be an underappreciated REIT with lower gearing than many and a high dividend yield of 9%. I wonder what is the risk involved such that Mr Market is pricing it at such low levels. Given that it is in an essential business with tenancy stretching for 6 years and more out, I dont see much downside risk. Would be a good investment for dividend investors

https://links.sgx.com/FileOpen/Investor%...eID=839460

[weijian]

Is this familiarity bias a permanent headwind for enthusiasm towards UHREIT? If it is, then I reckon some arbitrary opportunity is available for anyone who thinks there is some value to be unlocked, isn't it? Saizen REIT comes to mind. UHREIT currently has a market cap of ~260mil and that is a good size for someone to come in and execute the arbitrage. Therefore, you don't really need to be included in "major equity indices".

Minutes of the Annual General Meeting of the Unitholders of United Hampshire US Real Estate Investment Trust

The sixth unitholder, Mr. Yeo, congratulated the Board and Management on UHREIT's good performance. His question concerned the undervaluation of UHREIT, noting that its NAV is $0.75, yet its unit price is only $0.44. He compared this with the performance of a U.S. listed property company, Simon Property Group, which has seen its unit price trend upwards over the past five years, while UHREIT’s unit price has trended down. He inquired if there was anything UHREIT could do to close this gap. While he acknowledged that the comparison may not be entirely appropriate, he noted that both REITs appeared to be quite similar.

The CEO responded that while there are U.S.-based REITs that are similar to UHREIT, there are also key differences between them. REITs with Singapore based properties have an advantage because investors are more familiar with the properties, and they typically do not expect a premium when investing in these REITs. Singaporean investors may accept lower dividend yields because they feel a stronger connection to the properties as they can see and experience them in person. They may also be more familiar with the sponsors of these REITs. As a result, it is not surprising if REITs with overseas assets trade at a discount.

One of the challenges UHREIT faces is its comparatively small market capitalisation. While the REIT is performing well operationally, it is not large enough to be included in major equity indices, which are widely followed by large institutional fund managers. Being excluded from these indices limits UHREIT’s ability to attract substantial investments from these large fund managers. As the Chairman has mentioned, it is crucial for UHREIT to grow in order to be able to attract these larger institutional investors and thereafter the gap between the valuation and unit price may narrow.