Review of High Distribution Yield of 8.2%- United Hampshire US REIT After Disappointing Results For FY2024.

Today, I decided to have a look back at United Hampshire US REIT ("UHREIT") which I last reviewed on February 11, 2025- it had been a horrendous bloodbath in terms of its market price over the past few years considering the fact that it debuted at an IPO offered price of US$0.80 per unit on SGX but is tragically now languishing at US$0.51 per unit as at Dec 5, 2025. UHREIT is the 2nd largest holdings in my overall consolidated portfolios. On a macro-economical level, conditions for REITs market have improved drastically relative to a year ago where the raging interest rate environment led to devastating impact on their financial performances. The time maybe ripe for further improvement in its DPU as well as also another 20%-30% capital appreciation. UHREIT has steadily climbed +7.3% in capital appreciation from US$0.475 to US$0.510 as at Dec 4,2025. Adding in dividends of US$0.0414 received in 2025, which is a +8.72% distribution yield on the market price of UHREIT at the beginning of the year. This translates to an impressive total return of +16% return for FY2025. Is things finally turning around for long suffering unit-holders of UHREIT? Let take a closer look below:

1.Revitalised DPU Finally For UHREIT.

For the longest time, we are finally starting to see the light at the end of the tunnel- DPU has been on a decreasing trend yearly since its IPO days in late 2020. The post COVID high interest rate era has taken a huge toll on the DPU of UHREIT. The good news here is that the distributions for the 2nd half of 2024, which is paid in March 2025 has improved. The 1st half FY2025 distributions has also continued drastically improved trend. I will expect further improvements in FY2026 as UHREIT begin to further recover. 

2. Financial Performance of UHREIT For 1st Half FY2025 Relative to !st Half FY2024

Well, this is a little complicated as there are disposal of investment property (Albany Supermarket) during the year hence revenue and net income comparative will not be on an apple to apple and definitely show a decline without further normalisation. Additionally, the fair value gain/loss (as depicted in items circled in blue above) will also skew the net income numbers as these are actually non-cash adjustments. Therefore, we will need to do some mental acrobatics here by using the Net Income Before Tax and Before Fair Value Changes to compute the "normalised" Earnings Per Unit ("EPU").

Normalised EPU Computation To Assess Performance

Interestingly, there is a deterioration in financial performance with EPU dropping by a slight 2.8%. Nevertheless, the Dover Marketplace acquisition in August 2025 is yield accretive and bought at 4.8% below independent valuation. So, 2nd half financial performance should catch up and the differences is not expected to be material. With interest rate coming down, UHREIT will most likely be producing better financial results for FY2026 and higher distributions.

3. Leverage Ratio Improvement-Below 40%

UHREIT has come a long way to bringing down its aggregate leverage ratio from over 42% to the current healthier 38.9% as at the latest 3Q 2025 operational updates. Let's keep our fingers crossed that management of UHREIT will continue to maintain this ratio. 

The good news here is the unlike our 3 US Commercial Office REITs on SGX which imploded shortly after COVID and are all struggling financially with dividends partial or full suspension, UHREIT seems to be the only US REIT that is still paying out most of its distribution and in a much better shape. 

Parting Thoughts

The poignant thing about UHREIT is that it is trading at a substantial 32% discount to its NAV of US$0.74 per unit and offering a high distribution yield of around 8.2%-8.3% based on US$0.51 closing price as at Dec 5, 2025. There is an analyst report by UOB Kay Hian on UHREIT with a price target of US$0.70 per unit which presents a super optimistic view of 37% capital appreciation. Since UHREIT has always been trading at a huge discount to NAV, I will be happy if it goes up by just 20% capital gain and provides a yearly recurring 7%-8% distribution yield to unit-holders.