Executive Summary

United Hampshire US REIT (SGX: ODBU) is a small Singapore-listed REIT that has largely remained outside the spotlight since its difficult post-IPO period. Focused on grocery-anchored retail centres and self-storage facilities in the United States, it operates in property segments typically associated with necessity spending and defensive cash flows.

This article examines United Hampshire US REIT’s portfolio composition, land tenure structure, tenant mix, sponsor framework, and recent financial performance to assess how the trust has evolved since its early challenges. It explains why its income profile has stabilised, how falling interest costs have supported distributions, and which risks remain relevant. The analysis provides context for understanding where this REIT fits within the broader universe of income-oriented real estate vehicles.

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Background and Investment Focus

United Hampshire US REIT was listed on the Singapore Exchange on 12 March 2020, entering public markets at a particularly difficult moment as the global pandemic disrupted retail activity and investor sentiment. The REIT has since accumulated a track record of nearly six years as a publicly traded vehicle.

Its investment strategy is deliberately narrow. The trust focuses on acquiring stabilised, income-producing US properties anchored by grocery and necessity-based retail tenants, alongside a smaller allocation to modern, climate-controlled self-storage facilities. These assets are typically located in suburban communities and are designed to serve recurring, non-discretionary demand rather than discretionary consumption.

With a market capitalisation of slightly above US$300 million, United Hampshire US REIT remains small relative to most Singapore-listed REITs. Its limited scale and US exposure have contributed to muted investor attention, particularly given broader concerns surrounding US office REITs. However, its asset mix places it in a distinctly different risk category from those challenged segments.

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Portfolio Composition and Geographic Footprint

As of the latest reporting period, the REIT owns 22 properties across eight US states. The portfolio comprises 20 grocery-anchored or necessity-based retail centres and two modern self-storage facilities. In aggregate, these assets span approximately 3.6 million square feet of net lettable area and carry a portfolio valuation of around US$751 million.

Geographically, the assets are concentrated in densely populated suburban corridors along the US East Coast, including New Jersey, Pennsylvania, Florida, and North Carolina. These locations typically benefit from established residential catchments, constrained land supply, and resilient consumer spending patterns.

The portfolio intentionally avoids large discretionary malls or speculative development exposure. Instead, it targets retail formats and services that remain relevant across economic cycles, such as supermarkets, pharmacies, discount retailers, laundromats, and storage providers. This emphasis shapes the REIT’s income profile, aligning it more closely with essential services than with cyclical retail trends.

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Freehold Land Tenure as a Structural Advantage

One of the defining features of United Hampshire US REIT’s portfolio is land tenure. Approximately 97.9% of its assets sit on freehold land, providing perpetual ownership rather than time-limited leasehold interests.

For income-focused real estate, land tenure matters materially. Long tenant leases provide income visibility, but where underlying land leases shorten, asset values and refinancing flexibility can deteriorate. Extending land tenure, where possible, often involves significant capital outlays and can dilute returns.

The freehold structure mitigates these risks. It preserves terminal asset value, reduces reinvestment uncertainty, and allows greater strategic flexibility in refinancing, divestment, or redevelopment decisions. When combined with the portfolio’s weighted average lease expiry of approximately 7.5 years, freehold tenure enhances the durability of cash flows rather than merely their near-term visibility.

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Tenant Mix and Anchor Concentration

Tenant concentration represents a visible risk factor. The REIT’s top ten tenants contribute more than half of base rent, with grocery anchors forming a substantial share of income. Under normal circumstances, such reliance could heighten vulnerability to individual tenant failures.

In this case, the risk is partially mitigated by sector dynamics. Grocery-anchored retail space in the US has seen limited new supply over the past decade and remains in demand among both tenants and institutional investors. Leasing conditions in this segment have generally supported high occupancy and replacement demand.

In addition, the anchor tenants themselves operate in defensive categories. Grocery retailers and necessity-based operators are less exposed to e-commerce displacement than discretionary retailers, particularly for perishable goods. Many have also integrated online fulfilment into their physical store networks, reinforcing the relevance of physical locations.

While tenant concentration risk cannot be dismissed, it is moderated by the essential nature of the services provided and by tight supply conditions in comparable retail formats.

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Representative Assets and Operating Characteristics

Examining individual properties illustrates the REIT’s operating focus. Upland Square in Pennsylvania is a large open-air power centre serving a dense suburban catchment, with committed occupancy near full levels and anchor tenants drawn from essential and value-oriented retail segments. Hudson Valley Plaza in New York follows a similar format, anchored by national retailers and supported by long lease tenures.

The self-storage allocation, while smaller, adds diversification. Carteret Self-Storage in New Jersey is a modern, freehold facility professionally managed by a large third-party operator, offering climate-controlled units and security features typical of institutional-grade storage assets. Self-storage demand has historically shown resilience across economic cycles, complementing the retail portfolio.

These assets are not positioned for rapid growth or re-rating based on redevelopment potential. Their contribution lies in predictable occupancy, contractual rent escalations, and relevance to everyday consumer needs.

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Sponsor Framework and Alignment Considerations

United Hampshire US REIT is sponsored by UOB Global Capital and The Hampshire Companies. This pairing combines Singapore-based financial structuring and capital markets expertise with US-based operating experience in grocery-anchored retail and self-storage.

The Hampshire Companies brings decades of experience in the exact asset classes the REIT owns, supporting operational execution across multiple US jurisdictions. UOB Global Capital provides institutional oversight and familiarity with Singapore’s REIT investor base.

Sponsor alignment, however, differs from that of large Singapore REIT platforms. US tax considerations limit sponsor ownership above certain thresholds, constraining equity alignment relative to sponsors with large, recurring asset-recycling ecosystems. While operational capability and asset sourcing are strengths, the scale and form of future sponsor support remain more limited than for larger sponsor groups.

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Financial Performance and Balance Sheet Position

Recent results indicate a stabilisation in operating performance. Gross revenue rose modestly year-on-year, while net property income grew at a faster pace despite asset divestments. More notably, distributable income increased at a double-digit rate, supported by contractual rent escalations, improved leasing, and lower interest expenses.

Distributions per unit have recovered from post-IPO lows, with consecutive periods of year-on-year growth. This improvement has coincided with declining borrowing costs, as the REIT benefits from easing US interest rates. A portion of debt is exposed to floating-rate benchmarks, allowing further savings should rate cuts continue.

Capital management metrics remain within prudent ranges. Gearing stands just below 40%, interest coverage exceeds two times, and refinancing risk is limited by the absence of near-term debt maturities following recent refinancing activity. These factors collectively support income stability.

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Reassessing the Post-IPO Narrative

The REIT’s early trading history continues to influence perception. Following its March 2020 listing, units fell sharply amid pandemic-driven fears over US retail viability. That narrative has since been challenged by operating outcomes rather than commentary.

Occupancy has remained high, rental reversions positive, and tenant retention strong. Anchor tenants typically operate under long leases with built-in escalations, while portfolio pruning has kept leverage manageable. While the price chart still reflects early volatility, the underlying business profile has evolved into a more stable income platform.

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Key Risks and Ongoing Considerations

Several risks warrant ongoing attention. Currency exposure introduces variability for investors whose base currency differs from the US dollar. Tenant concentration remains a structural feature, requiring monitoring of anchor lease expiries and retailer strategies. Competitive dynamics in essential retail and evolving consumer behaviour also require active asset management.

These risks are characteristic of mature retail real estate rather than indicators of structural fragility. Their impact is more likely to affect growth rates than income sustainability.

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Conclusion

United Hampshire US REIT represents a focused exposure to essential US retail and self-storage assets, underpinned by freehold tenure, high occupancy, and stabilising financial metrics. Its small scale and early-stage challenges have limited visibility, but recent performance suggests a clearer and more consistent income profile.

Understanding the REIT requires separating its pandemic-era trading history from its current operating fundamentals. While not without risk, its portfolio characteristics and improving capital structure provide a framework for assessing its role among income-oriented real estate vehicles.

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