United Hampshire US REIT: Stronger 1H26 on acquisitions and rental growth

Revenue growth supported by acquisitions and leasing momentum 

Source: United Hampshire US REIT 1H26 results presentation

United Hampshire US REIT (UHREIT) reported a stronger 1H26, with revenue rising 5.8% year-on-year to US$37.8 million across a broad base.  Net property income (NPI) increased 6.4% year-on-year to US$25.5 million. 

Management attributed the improvement to new leases, built-in rental escalations and contributions from Dover Marketplace and Wallingford Fair, acquired in August 2025 and January 2026 respectively. NPI margin improved to 67.4% in 1H26, from 67.0% in 1H25.

Finance expenses increased by 6.8% year-on-year to US$9.2 million, mainly due to additional borrowings undertaken to finance the acquisition of Wallingford Fair. This was partially offset by lower interest rates on floating-rate loans.

Distributable income grew 5.8% to US$13.7 million, while DPU increased 3.4% year-on-year to 2.16 US cents. The 1H26 distribution includes 1.00 US cent of capital distribution, accounting for about 46% of the total 2.16 US cents DPU. 

Source: United Hampshire US REIT 1H26 results presentation

Healthy balance sheet 

UHREIT’s aggregate leverage stood at 40.4% as at 30 June 2026, slightly higher than 38.6% as at 31 December 2025. 

Weighted average debt maturity was 2.9 years, with no refinancing requirements until February 2028. 

The weighted average interest rate declined for the fifth consecutive reporting period to 4.89%, while trailing twelve-month interest coverage remained at a healthy 2.4x.

The balance sheet provides some protection against near-term refinancing risk, although gearing is relatively close to the 45% threshold used in our Income Pot framework. 

Management also highlighted that 71.5% of borrowings were fixed-rate, while every 50 basis point movement in SOFR is estimated to affect annual DPU by 0.079 US cents, equivalent to 1.77% of trailing twelve-month DPU. 

Source: United Hampshire US REIT 1H26 results presentation

Source: United Hampshire US REIT 1H26 results presentation

DPU growth 3.4% year-on-year 

Distributable income grew 5.8% year-on-year in 1H26 to US$13.7 million. 

1H26 distribution per unit grew 3.4% year-on-year to 2.16 US cents, comprising 1.16 US cents of tax-exempt income and 1.00 US cent of capital distribution.

Based on the 3 September 2026 closing price of US$0.49, our estimates for FY26E DPU of 4.51 US cents implies a distribution yield of 9.2%.

The yield remains attractive relative to the 10-year U.S. Treasury yield of 4.8% on 2 Sep 2026, giving UHREIT a spread of 4.4 percentage points. 

Source: United Hampshire US REIT 1H26 results presentation

Resilient portfolio with limited near-term lease risk 

Source: United Hampshire US REIT 1H26 results presentation

UHREIT’s Grocery & Necessity portfolio continues to provide good income visibility. Committed occupancy stood at 97.6%, with a 7.9-year WALE (weighted average lease expiry).

Only 0.6% and 4.6% of leases expire in 2026 and 2027, respectively. The long lease expiry profile and 90% tenant retention rate reduce near-term leasing risk.

The portfolio also secured more than 260,000 sq ft of new and renewal leases in 1H26, including leases with Giant Supermarket, Stop & Shop Supermarket, Wendy’s and Bath & Body Works. 

Recent acquisitions are also contributing positively. Wallingford Fair was acquired for US$21.4 million in January 2026, 8.2% below valuation. While Dover Marketplace was acquired in August 2025 for US$16.4 million, 4.8% below valuation. The acquisitions have supported revenue and NPI growth, although the additional borrowings have also increased finance costs.

Source: United Hampshire US REIT 1H26 results presentation

Recent developments

Proposed divestment of BJ’s Quincy

On 18 Aug 2026, UHREIT announced the divestment of BJ’s Quincy for US$34.0 million to 200 Crown, LLC. The purchaser is an unrelated third party.  The sale price represents a premium of 4.9% above valuation. 

The estimated net proceeds are US$33.3 million.  The liquidity further improves UHREIT’s financial flexibility and strengthens its capital structure. If the proceeds are used for debt repayment, UHREIT’s pro forma aggregate leverage as at 31 Dec 2026 will improve to 35.9%, from 38.6%. 

BJ's Quincy is a single-storey free-standing building leased to BJ’s Wholesale Club.  The 84,360 sq ft property is freehold. 

The divestment is part of its broader portfolio optimisation and capital recycling strategy, with proceeds potentially redeployed into growth opportunities such as new acquisitions, asset enhancement initiatives and future development opportunities. The divestment is expected to complete on 15 Sep 2026. 

Dick’s Sporting Goods reported disappointing Q2 earnings and cut guidance

On 25 Aug 2026, Dick’s Sporting Goods reported  Q2 earnings that missed expectations.  It also lowered its overall sales outlook for the year by 1% to a range between US$21.9 billion and US$22.2 billion.

Dick’s Sporting Goods is UHREIT’s fifth-largest tenant and accounts for 3.8% of gross rental income of Grocery & Necessity. We do not expect a significant impact on UHREIT given the relatively modest downward revision and the REIT’s well-diversified tenant base. UHREIT has a well-diversified tenant base with top 10 tenants accounting for 52% of gross rental income. 

That said, we will monitor the situation closely. 

Source: United Hampshire US REIT 1H26 results presentation

Maintain BUY and target price of US$0.62 

We maintain BUY on United Hampshire US REIT with a target price of US$0.62, based on the Dividend Discount Model (DDM) with a cost of equity of 10% and a terminal growth rate of 2.0%.

Our COE of 10% reflects the REIT’s U.S. dollar-denominated income base, the relatively small market capitalisation and associated liquidity premium, and the current S-REIT sector discount environment.  

Currently, it is trading at US$0.49, implying FY26E distribution yield of 9.2%.  This is attractive relative to the peer average FY26E distribution yield of 8.3%.

Source: FactSet, Beansprout research, prices as of 2 September 2026

United Hampshire US REIT on Beansprout’s REIT Income Pot framework

We apply Beansprout’s REIT screening framework: DPU growth, gearing, and yield versus risk-free alternatives - to assess whether United Hampshire US REIT (“UHREIT”) is suitable for an income-focused portfolio.

Check #1: DPU grew steadily

1H26 DPU of 2.16 cents was 3.4% higher year-on-year, with gross revenue up 5.8% and NPI +6.4% year-on-year.    

Check #2: Gearing ratio at an acceptable level

Aggregate leverage stood at 40.4% as at 30 June 2026, remaining below Beansprout’s preferred 45% threshold. 

Interest coverage ratio of 2.4x and a well-balanced debt profile further support balance sheet resilience.  It has no refinancing requirements until February 2028. UHREIT has S$120.5 million of undrawn facilities.

Check #3: Distribution yield remains attractive

We estimate FY26E DPU at 4.51 cents (1H FY26 2.16 cents). The closing price of US$0.49 on 3 Sep 2026 implies a distribution yield of 9.2%. 

Currently, the Singapore Savings Bond is offering about 2.1%, while the 6-month T-bill is offering around 1.6%.

UHREIT is trading at a spread of 7.1 to 7.6 percentage points over risk-free rates.  This is above Beansprout’s preferred minimum spread of about 3 percentage points, compensating investors for its US dollar exposure in assets and income.    

UHREIT passes the checks for the Income Pot framework.

Investors should monitor asset acquisitions, the aggregate leverage ratio and revenue growth trends. While the REIT’s distributable income increased 5.8%, investors should distinguish between recurring income and capital distributions when assessing the quality of the headline yield.

Key risks 

Key risks include concentrated exposure to anchor tenants, low trading liquidity and economic cyclicality.

Concentrated exposure to anchor tenants

As at 31 March 2026, the top 10 tenants accounted for 52% of gross rental income. The largest single tenant, BJ’s Wholesale Club Holdings, represents approximately 10.1% of portfolio gross rental income. Any material deterioration in BJ’s financial health, closure of stores, or failure to renew leases could have an adverse impact on United Hampshire US REIT’s income. However, BJ’s Wholesale Club is an established, publicly listed company (NASDAQ: BJ) with a market capitalisation of US$11.3 billion. We think this mitigates near-term risk to portfolio income. 

Currency risk  

United Hampshire US REIT’s income and NAV are denominated in US dollar. Singapore-based investors are therefore exposed to SGD/USD fluctuations, which could affect the SGD value of distributions. Management partially mitigates this by offering distributions payable in USD, SGD (at the prevailing exchange rate), or via the Distribution Reinvestment Plan. The DRP take-up rate has historically ranged from 6% to 32%, with an average of approximately 20%.

Interest rate risk

While the current environment is characterised by declining interest rates, an unexpected reversal — driven by persistent inflation or exogenous shocks — could compress UHREIT’s distributable income. With 21.5% of borrowings on floating-rate SOFR, each 100 basis point increase in rates reduces annual distributable income by approximately US$0.7–0.8 million, equivalent to roughly 0.1–0.13 US cents per unit on current unit count.

Macro-driven consumer spending softness

Grocery-anchored strip centres are not entirely immune to macroeconomic deterioration. A sustained consumer spending downturn — whether driven by tariff-related price increases, employment deterioration, or global financial shocks — could affect tenant sales and, ultimately, the ability of inline tenants to absorb built-in rent escalations upon renewal. UHREIT’s exposure to this risk is partially mitigated by the essential, non-discretionary nature of its anchor tenants, but the tail risk exists.

Trading liquidity

UHREIT’s market capitalisation of approximately US$300 million (S$381 million) and three-month average daily turnover of approximately US$0.20 million place it at the smaller end of the SGX REIT universe. This may limit institutional ownership and result in a structural liquidity discount relative to larger-capitalisation peers. Investors should factor liquidity considerations into position sizing.

Related links:

• United Hampshire US REIT share price and share price target
• United Hampshire US REIT dividend history and forecast

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