Perennial reports 1Q19 net loss on higher finance costs and startup costs

Perennial Real Estate Building in Singapore’s Chinatown area; taken September 2018.Perennial Real Estate Building in Singapore’s Chinatown area; taken September 2018.

Perennial Real Estate Holdings reported Tuesday a first-quarter net loss of S$26.9 million, swinging from a year-ago profit of S$5.1 million due to higher finance costs and expensing of initial startup and operating costs for Perennial International Health and Medical Hub.

Finance costs in the quarter rose 76.8 percent on-year to S$30.86 million on a higher interest rate and increased borrowing, the filing said. PIHMH in Chengdu and The Capitol Kempinski Hotel Singapore both began operations in early 2019, Perennial said in a filing to SGX after the market close.

PIHMH’s committed occupancy rose to 92.8 percent by end-March, with anchor tenant Gleneagles Chengdu Hospital beginning fitting out works and planning to start operations in the second half of the year, Perennial said.

Finance costs in the quarter rose 76.8 percent on-year to S$30.86 million on a higher interest rate and increased borrowing, the filing said.

“The group consolidated Capitol Singapore’s debt and took on additional loans to fund investments. In addition, finance costs previously capitalised for the construction of PIHMH were expensed off following the completion of the project,” Perennial said.

In its outlook, Perennial said the 111 Somerset property’s strata-sale of office units was gaining traction, with more than 10 sold at the recent launch, amid improved office-market sentiment.

Capitol Singapore had total committed occupancy of 84 percent as of end-March, with over 90 percent expected by the third quarter, Perennial said.

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