From his perspective, this will drive higher occupancy and sales figures on a per sq ft basis as the retail malls have evolved into lifestyle hubs for Gen Z to hang out together.
“Retailers also embrace bold visual designs and “instagrammable” spaces that support content creation and self-expression,” Koh adds.
Meanwhile, Koh believes that US retail properties are currently in recovery mode given the low after a decade of minimal construction. “Net absorption is expected to stabilise in 2026 driven by expansion from grocery, food & beverage and service-oriented retailers while national retail vacancy rate has fallen to near historical low at 5.6%,” Koh predicts.
At the same time, CBRE expects rent growth to remain above trend at 3.1% per year over the next five years and grocery-anchored open-air strip centres are expected to outperform in occupancy and rent growth due to limited new supply and tight occupancy.
See also: Lai of DBS reiterates NTT DC REIT as top data centre REIT pick following lease renewal
For UHREIT, Koh says that the new 53,000 sq ft Dick’s Sporting Goods store at Hudson Valley Plaza in Ulster County, New York helps to strengthen Hudson Valley Plaza’s tenant mix, occupancy and income stability.
Koh believes that Hudson Valley Plaza, which is the largest asset within UHREIT’s portfolio, benefits from increased foot traffic and vibrancy generated by the new anchor tenant, which support sales performance of surrounding retailers, such as Walmart, PetSmart and Ashley Furniture.
“Dick’s has gained market share and clocked same-store sales growth of 4.5% in 2025. It benefitted from the acquisition of Foot Locker last September. The new store will start contributing in March,” Koh adds.
See also: HSBC upgrades Singapore equities outlook to overweight
With continued demand for physical storefronts, Koh sees UHREIT being well-positioned to capitalise on growth opportunities to expand its income base.
“UHREIT will benefit from full-year contributions from the acquisitions of Dover Marketplace and Wallingford Fair in FY2026. It could consider recycling assets by divesting self-storage properties (yield: 5%) and reinvesting in strip centres (yields between 6%-7%),” Koh explains.
On the value creation front, UHREIT is developing a new 5,000sf store on excess land next to the existing Academy Sports store, which opened back in November 2023. The new store was pre-leased to Florida Blue, a health insurance company, under a 10-year lease agreement.
“The new store is expected to generate rental income upon its completion in 4QFY2026. Management estimates capex at US$2 million and ROI at 10%,” Koh adds.
Overall, Koh sees UHREIT trading at an attractive yield spread despite its resilient business model. “UHREIT trades at FY2026 distribution yield of 9.8%, which represents an attractive yield spread of 5.5% above the 10-year US government bond yield of 4.3% and trades at P/NAV of 0.68 times,” Koh says.
Hence, Koh is maintaining a “buy” call on UHREIT with a target price of 72 US cents. The target price is based on the dividend discount model with cost of equity at 8.5% and terminal growth of 1.5%.
As at 9.41am, units in UHREIT are trading flat at 51 US cents.
