United Hampshire US REIT’s DPU Rose to 2.16 US Cents: How Well Does Cash Cover It?

United Hampshire US REIT (SGX: ODBU) announced a distribution of 2.16 US cents per unit for the six months ended 30 June 2026, up from 2.09 US cents a year earlier. Its unaudited results, released on 13 August 2026, show stronger property income. They also give unitholders reason to look beyond the headline DPU increase. [S2, p. 3] [S2, p. 24] [S2, p. 28]

Property income helped lift the payout

Net property income rose 6.4% to US$25.48 million. The manager attributes the increase to new leases, contractual rent increases and contributions from Dover Marketplace and Wallingford Fair, acquired after the comparable half-year. Part of the growth therefore came from a larger portfolio. [S2, p. 3] [S2, p. 27]

Finance costs increased from US$8.60 million to US$9.19 million, mainly because of borrowing for Wallingford Fair. After the filing’s distribution adjustments, income available for distribution rose 5.8% to US$13.72 million. Of that, US$13.16 million was allocated to unitholders; the remaining US$0.56 million was set aside as a capital reserve. [S2, p. 4] [S2, p. 5] [S2, p. 27]

Profit attributable to unitholders rose much faster, from US$7.87 million to US$11.86 million. That profit figure includes fair-value movements and other items removed or adjusted in the distribution statement, so it is a poor measure of recurring payout growth on its own. [S2, p. 4] [S2, p. 5]

What changed within the distribution?

The 2.16-cent distribution comprises 1.16 US cents of tax-exempt income and 1.00 US cent of capital per unit. A year earlier, those components were 1.23 and 0.86 US cents. Total DPU rose by 0.07 cent, while the income component fell by 0.07 cent and the capital component rose by 0.14 cent. [S2, p. 28]

The capital classification describes the distribution’s treatment for Singapore income tax. It does not, by itself, establish that the REIT borrowed to fund that portion. Still, the mix is useful context when weighing the DPU increase against property income and cash generation. [S2, p. 28]

Cash after interest remained below the allocation

The cash-flow statement reports US$20.45 million generated from operations in the first half. Interest paid on borrowings and the lease liability appears separately under financing cash flows. Including those payments leaves US$12.13 million of operating cash after financing interest, below the US$13.16 million allocated for this period’s distribution. The same check gives US$11.71 million against a US$12.47 million allocation a year earlier. [S2, p. 5] [S2, p. 7]

This comparison is a coverage check, not a reconciliation to cash distributions paid in the half-year: those payments relate to earlier distribution periods. The REIT also paid US$8.57 million for investment-property capital expenditure, tenant improvements and leasing commissions. Such spending varies by period but remains a claim on cash. [S2, p. 7] [S2, p. 8]

The next test for unitholders

Loans and borrowings rose to US$327.17 million at 30 June 2026 from US$306.47 million at end-2025. Aggregate leverage was 40.4%, and interest coverage was 2.4 times. The US$41 million Upland Square mortgage matures in November 2026; the 13 August 2026 filing said the REIT had secured a US$50 million delayed-draw facility available to refinance it. The supplied filings do not establish whether refinancing was completed afterward. [S2, p. 17] [S2, p. 18]

The higher DPU has support from improved property income, but the larger capital component and the cash coverage gap temper the result. The next filing should show whether income from the enlarged portfolio lifts cash after interest enough to cover the distribution alongside property spending. [S2, p. 5] [S2, p. 7] [S2, p. 28]