UH REIT H1 profit up 20% as costs and property markdowns weigh
UH Real Estate Investment Trust grew first-half profit by nearly 20% on stronger rental and interest income, though surging management fees and a property devaluation dragged down net asset value.
UH Real Estate Investment Trust (UH REIT) reported net income of N518.50 million for the first half of 2026, an increase of 19.86% over the prior year. The Nigerian Exchange-listed fund grew total income by 36.19% to N747.23 million, pushing basic earnings per unit up to N2.76 from N2.30.
The revenue growth was broad-based across the fund's operations. Rental income, which remains the core business contributing 52.7% of total revenue, rose 5.23% to N393.52 million. Interest income grew 19.4% to N251.86 million, while sundry income provided an unexpected boost, surging to N101.85 million from just N1.72 million a year earlier.
However, the income gains were substantially eroded by a near-doubling of operating expenses, which shot up 97.05% to N228.73 million. The primary driver was a sharp escalation in management fees, which consumed N139.56 million compared to N53.83 million previously. This single line item represented 61% of total operating costs, a dynamic that will test investor tolerance given it significantly outpaced the 36% top-line growth.
Balance sheet contracts
The fund's balance sheet showed signs of stress, with total assets declining 1.69% to N28.66 billion since December 2025. Net assets attributable to unitholders fell 1.81% to N27.44 billion. This contraction was largely driven by a fair value markdown on the fund's Macdonald, Ikoyi property, which was written down to N2.70 billion from N3.15 billion.
UH REIT maintained adequate liquidity, holding N2.38 billion in cash and equivalents, predominantly in Treasury Bills, alongside a steady N490 million investment in FGN Sukuk. On the liability side, current liabilities edged up to N1.22 billion, driven by higher accruals, even as rent received in advance declined.
Despite the margin compression and net asset value decline, the trust returned capital to investors, paying out N1.04 billion in dividends during the period, a 9% increase year-on-year. The stock has reflected this mixed operational performance. After spiking to N94.85 in late January from a N51.85 opening price, shares have steadily declined but still hold a 35% year-to-date gain, ranking 64th on the NGX.
