SPH REIT: fiscal 4Q net property income falls slightly on lower revenue from Paragon

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SPH REIT said its net property income for the fiscal fourth quarter fell 1.9 percent on-year to S$40.98 million, as lower revenue from the Paragon mall was partially offset by a higher contribution from The Clementi Mall and two months of contributions from The Rail Mall.

Gross revenue for the quarter ended 31 August was up 0.2 percent on-year at S$52.96 million, SPH REIT’s manager, SPH REIT Management, said in a filing to SGX after the market close on Thursday.

The distribution per unit (DPU) for the fiscal fourth quarter was 1.43 Singapore cents, up slightly from 1.42 Singapore cents in the year-earlier period, it said. The fourth quarter DPU will be paid to unitholders on 21 November, it said.

Income available for distribution in the fiscal fourth quarter rose 8.6 percent on-year to S$34.58 million, while the distribution to unitholders for the quarter rose 1.3 percent on-year to S$36.78 million, it said.

For the full fiscal year, net property income was down 1.2 percent at S$166.0 million, while gross revenue was down 0.4 percent on-year at S$212.76 million, it said. The DPU for the full fiscal year was 5.54 Singapore cents, up slightly from 5.53 Singapore cents a year earlier, the filing said.

The overall portfolio saw a rental reversion of negative 3.5 percent for new and renewed leases for the full fiscal year, with the leases committed largely a year ago, during a period of retail sales downturn, the REIT’s manager said, adding that represented 30.7 percent of the total portfolio net lettable area. Occupancy remained high at 99.4 percent, the REIT manager said.

For the Paragon mall, rental reversions were negative 3.7 percent for new and renewed leases for the full fiscal year, SPH REIT’s manager said.

“With the recovery in retail sales in the second half of 2017, the cumulative decline was moderated during the financial year,” it said, adding that the mall saw a 2.7 percent increase in visitor traffic to 18.8 million amid an increase in international visitor arrivals and improved consumer sentiment.

At the Clementi Mall, rental reversions were up 3.0 percent in the fiscal year, with the renewal of 5.9 percent of the mall’s net lettable area, amid high visitor traffic of 29.9 million, it said.

The acquisition of The Rail Mall along Upper Bukit Timah Road for a consideration of S$63.24 million was completed in late June, it noted.

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