United Hampshire US REIT to divest two self-storage properties

U.S. one-dollar currency notes; taken September 2018.U.S. one-dollar currency notes; taken September 2018.

United Hampshire US REIT said Wednesday it has entered a deal to divest Elizabeth Self-Storage and Perth Amboy Self-Storage to unrelated third party Storage Post LLC for US$49.0 million. 

Elizabeth Self-Storage is a three-storey property and Perth Amboy Self-Storage is a four-storey self-storage property with an office and small retail area, with both properties located in New Jersey, in the U.S., the REIT said in a filing to SGX.

The consideration is 12.9 percent above the purchase price of US$43.4 million, the REIT said, adding it expected to recognise a divestment gain of around US$3.1 million.

The independent valuation of the properties, conducted by Cushman & Wakefield of New Jersey, was US$44.4 million at end-2021, the filing said.

“The divestment is in line with the manager’s pro-active portfolio management strategy to maximise the operational performance of assets and capitalise on opportunities to improve financial flexibility to pursue growth opportunities,” the REIT said.

United Hampshire US REIT said it would use the net proceeds to fund potential higher yielding acquisitions, finance capital expenditure repay existing debts and/or for other general corporate requirements. 

On a pro forma basis, the divestment would have reduced the distribution per unit (DPU) to 5.5 U.S. cents, from 6.1 U.S. cents before the divestment, assuming the sale had been completed on 1 January 2021, the REIT estimated.