SPH REIT fiscal 1Q net property income slips on lower revenue from Paragon

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SPH REIT reported on Friday net property income for its fiscal first quarter slipped 1.0 percent on-year to S$41.8 million, mainly on lower revenue from the Paragon mall, partly offset by higher contributions from the Clementi Mall and the Rail Mall.

Gross revenue for the three months ended 30 November rose 0.6 percent on-year to S$53.81 million, SPH REIT’s manager, SPH REIT Management, said in a filing to SGX after the market close on Friday.

The revenue increase was offset by higher property operating expenses, which rose 6.5 percent on-year to S$12.02 million, due to higher marketing expenses, it said.

The Paragon mall’s gross revenue slipped to S$42.2 million in the fiscal first quarter from S$43.1 million in the year-ago period, the filing said.

The distribution per unit (DPU) for the quarter, which will be paid on 15 February, was steady at 1.34 Singapore cents on-year, but down from 1.43 Singapore cents in the fiscal fourth quarter, it said.

Within the portfolio, the properties occupancy rate remained high at 99.2 percent as of the end of the quarter, the REIT manager said.

The Paragon mall saw positive rental reversion of 10.1 percent for new and renewed leases in the quarter, which represented 8.4 percent of the mall’s net lettable area, it said. The overall portfolio saw positive rental reversions of 9.7 percent, the filing said.

As part of the REIT’s outlook, Susan Leng, CEO of the REIT manager, pointed to the REIT’s recent acquisition of 85 percent of Figtree Grove Shopping Centre, with joint venture partner, Moelis Australia, located in Wollongong, New South Wales, Australia.

“This acquisition provides SPH REIT with the opportunity to further create value and continue to deliver long term returns for unitholders. The full contribution from Figtree Grove Shopping Centre is expected in the second half of the year,” she said in the statement.

SPH REIT’s portfolio comprises the Paragon mall, the Rail Mall, the Clementi Mall and the stake in Figtree Grove Shopping Centre, it said. The REIT’s sponsor, Singapore Press Holdings, owns 70 percent of SPH REIT, it said.

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