United Hampshire US REIT ("UHREIT") has been one of my lacklustre US REIT investment holdings inside my portfolios despite no apparent bad news like those facing US Manulife REIT. While most REITs such as Keppel DC REIT, DigiCore REIT and Mapletree Industrial Trust sprang back to life and shot up vivaciously over the past few days, UHREIT just went up a tiny bit and laggard far behind. It has tumbled 28% from US$0.625 per unit as at 31 August 2022 to US$0.45 per unit at one point in time during early January 2023. I was beginning to get worried that there maybe some extreme bad news like fraud that has not been officially released.
1.What happened to UHREIT?
I thought that there maybe certain news that I have missed out on UHREIT. So I reached out to a fellow investment blogger, Happy REIT Investor, whom I recalled is similarly vested in UHREIT. For those interested, please refer to the comments section for the insights shared by Happy REIT Investor in his recent portfolio posting. You can see our discussion there on UHREIT.
(Fyi: Happy REIT Investor is one of the few bloggers who has already attained the sacred financial independence with a sizeable investment portfolio built up through his astute investment skills).
2.UHREIT Distribution Yield
The current distribution yield of UHREIT is 11.75% based on its unit price of US$0.495 per unit and annualised 5.82 cents of payout. Its upcoming year end results will be released on 22 February 2023.
For those like me who pursues an income investing strategy, the ups and downs in terms of the pricing of a stock does not really matter if one adopts a long term view. As long as there are no frauds or major bankruptcy of the major tenants, I think that one can always wait it out while collecting the dividend payout.
Parting thoughts
I am actually thinking of whether to add on to UHREIT. However, it is currently already taking up 10% of my overall equity portfolios and thus will increase my concentration risk. For 2023, I intend to diversify and build up more investment holdings in non-REITs sector assets.
For those vested in UHREIT, will you still be holding on to it despite the lackluster price performance since IPO? What are your thoughts?
Hi Blade Knight, for my personally, I will continue to remain vested in United Hampshire REIT, and may even continue to add more to it even though my portfolio is small and hence UHReit is already a decent weightage. In my opinion, one of the points of dividend investing is that you do not need to liquidate shares to obtain cash. Hence, as long as fundamentals do not deteriorate, UHReit is a good buy still in my opinion. Assuming share price does not change, you are actually more or less beating/meeting the performance of the S&P500 assuming you reinvest dividends. If you look at all the big REITs now, you will be hard pressed to find any yielding above 5.0%. I think the high yield spread between UHReit and the others very well compensates for the additional Forex Risk and other uncertainties.
ReplyDeleteThanks King for sharing your thoughts on UHREIT-good point on the forex risk.
DeleteI see that you have also taken an interest into Fu Yu Corp. :)
Yes, thanks to you for helping me discover that gem, big fan of your blog! Seems like we spoke too soon, and UHReit is having some decent action today... Also... wanted to buy some Fu Yu shares today but my cash locked in "processing" mode for tiger vault... hais
DeleteThanks King for taking the time to read my posts. Wishing you all the very best in your investing journey and do continue to keep writing on your blog too to share. :)
DeleteI do hope that UHREIT continue to recover in its market price to at least 60 cents. Hopefully, Fu Yu will have some good news too in terms of its business development with the completion of its upgraded manufacturing facility in Singapore.
Oh no accidentally deleted Sam' s comment-sorry:
ReplyDeleteSam commented on "United Hampshire US REIT Finally Having Some Signs of Life?"
18 hours ago
hi, read your blog occasionally. i hold uhreit units but it forms a very small part of my portfolio at above 1%. must caveat that i am a noobie investor. one thing i noticed in recent times is that the market doesn't know how to value US based reits. next, there is a lot more volatility due to interest rate hikes. another observation is that the gearing for uhreit is above 40% and that it is a relatively small market cap stock, and it being in the US, despite being "defensive" to some extent in relation to supermarkets. investors get scared. it has 96% committed occupancy and has 80% of its debt at fixed rates. and based on my limited understanding, i think it is flying under the radar for most investors.
Thanks Sam for sharing. Yup, sometimes I wonder whether investors are viewing UHREIT in the right light.
Deletehi blade, thanks for your reply. hopefully there will be more clarity when uhreit release their earnings.
Deletewant to commend you for your efforts in this blog. i wanted to start my own ramblings but can't find the time and energy to do so, and appreciate what you've done. your views sometimes either echo or provide a different perspective - both ways, all appreciated!
i just saw your SGX CDP portfolio and hope you will find success! just want to share i've 17 counters, and hold 8 similar counters as yours (and also have the counters you hold in your margin account). must say your projected yield of 7.6% is ambitious, while my project yield is 5.8%-6% against the principle invested. my strategy is more oriented towards higher market cap reits at good price/NAV value and healthy gearing.
cheers!
Hi Sam, all the best to you too!
DeleteYup, my projected yield is higher as I took on higher risk in particularly with the US REITs- not exactly pretty given that Manulife US REIT is close to crisis mode and other US office REITs are being hit badly due to low physical occupancy rate.
I may have to adopt a more conservative approach going forward similar to yours in terms of quality of the REITs.
Have a great week ahead! :)