United Hampshire US REIT to acquire Pennsylvania shopping center

U.S. one-dollar currency notes; taken September 2018.U.S. one-dollar currency notes; taken September 2018. Credit: Shenton Wire

United Hampshire US REIT has proposed acquiring a grocery-anchored shopping center, Upland Square Shopping Centre, located in Montgomery, Pennsylvania, for around US$85.7 million, the REIT said in a filing to SGX Thursday.

“Upland Square is a strategic fit with our investment criteria being well-located in a vibrant sub-market with limited competition and high barriers to entry for new retail development. Additionally, the property benefits from a strong highway infrastructure that provides easy access to and from the growing surrounding residential communities,” Robert Schmitt, CEO of the REIT’s manager, said in the statement. The property is the REIT’s second in Pennsylvania.

Schmitt said the acquisition would provide a 2.13 percent DPU increase on a pro forma basis.

“Given its larger distributable income base, Upland Square is set to substantially enhance UHREIT’s income visibility and resilience,” he said, noting the 35 tenants include a major grocery anchor, off-price apparel retailers, a Petco, quick-service food outlets and fitness services.

The acquisition will boost the REIT’s committed occupancy to 96.6 percent, the highest since the REIT’s initial public offering, the filing said.

The net proceeds of around US$44 million from the recent proposed divestment of the Elizabeth Self-Storage and the Perth Amboy Self Storage will be used to partially fund the acquisition, the REIT said, adding the assumption of an existing property loan and internal resources would also be used.

The purchase price represents a slight discount to the independent  valuation of US$86 million, the filing said.