United Hampshire US REIT lowers consideration for divestment of 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 agreed to lower the consideration for the divestment of two self-storage properties to US$45.5 million from US$49 million, the REIT said in a filing to SGX Tuesday. 

The revised pricing took into account the independent valuation by Cushman & Wakefield of US$44.4 million, the REIT said. 

The revised consideration is 2.5 percent above the valuation, and 4.9 percent above the REIT’s purchase price of US$43.4 million, including an escrowed top-up amount of US$4.7 million, the REIT said.

The due diligence period, which had been extended four times, has now expired and the buyer hasn’t exercised its right to terminate the deal, the REIT said, adding the divestment’s completion is expected in the second quarter of this year.

Even with the reduced consideration, “the manager believes that the divestment, in overall, provides the opportunity to unlock the capital value and recycle into higher yielding grocery and necessity properties so as to produce better distributable income to the unitholders,” the REIT said.