The REIT’s distributable income for FY2024 came in 16.2% y-o-y lower at US$25.5 million, a decrease from the US$30.4 million in the same period a year ago.
Net property income for FY2024 decreased by 1.7% y-o-y to US$49.8 million.
Meanwhile, revenue increased marginally for FY2024 by 1.4% y-o-y to US$73.2 million.
The REIT says that net property income was lower mainly due to higher property expenses not recoverable from tenants due to temporary lower occupancy during tenant transitions, and an absence of contribution from the divested properties.
These divested properties are Big Pine Center, Lowe’s and the Sam’s Club properties within Hudson Valley Plaza.
The overall distributable income was lower mainly due to the factors listed above, and also higher finance cost due to higher interest rates, and entry into new interest rate swaps to replace maturing swaps at a less favourable rate. Also, the refinancing of Arundel Plaza Mortgage Loan at a higher interest rate.
In addition, the REIT’s manager base fee was paid and payable in cash with effect from 2H2023, but this was partially offset by partial loan repayment from divestments.
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Meanwhile, revenue grew marginally due to new leases and rental escalations from existing leases, and income from the new Academy Sports + Outdoors store at St. Lucie West.
As at Dec 31, 2024, the REIT’s portfolio occupancy stood at 97.5% for grocery & necessity, and 93.1% for self storage. Its weighted average lease expiry (WALE) stood at 8.1 years and aggregate leverage stood at 38.9% with a weighted average interest rate of 5.17%.
The REIT has no swaps maturing until Dec 2026, and no refinancing requirement until Nov 2026. Meanwhile, it has 26.4% of its portfolio or US$80 million of floating rate SOFR loans.
In its outlook, UHREIT says that there is a positive backdrop for businesses and investors in the US. However, there remains uncertainty surrounding the new Trump administration's policy direction and changes in policy which may have an impact on inflation, interest rates, and overall economic growth.
“Against this backdrop, the Manager aims to remain adaptable and proactive while continuing to strengthen UHREIT’s income streams and balance sheet through asset enhancement and development initiatives, accretive acquisitions and opportunistic divestments,” it ends.
Units in UHREIT closed flat at 48 US cents on Feb 19.
