- Bad point for this deal- Leverage post acquisition crosses over the 40% mark.
Fast coming off the disposal of its locker storage facilities, United Hampshire US REIT ("UHREIT") wasted no time in its announcement on 9 June 2022 that it is acquiring Upland Square Shopping Center in Montgomery, Pennsylvania for US$85.7Mil. This DPU accretive deal will push up future annual distribution yield to 10.38% based on previous closing price of US$0.610 per unit.
1.Key benefits of this deal are as follow:
1.1 Additional diversification of tenants for UHREIT.
Post acquisition, UHREIT top 10 tenants concentration will drop from 60.2% to 56.8%. It thus reduces tenant concentration risk and enhances income resilience.
1.2 DPU Improvement
DPU is expected to improve by 2.13% post-acquisition. 6.23 cents will mean a distribution yield of 10.38% based on the previous closing price of US$0.64 per unit. The acquisition will be funded mainly with the sales proceeds from the locker storage facilities as well as the assumption of the existing mortgage.
