SPH Reit 'responding to retail challenges'

SPH Reit's AGM yesterday drew about 300 unitholders. The Reit's portfolio was valued at $3.21 billion as at Aug 31 - 1.7 per cent higher than last year's valuation of $3.16 billion.
SPH Reit's AGM yesterday drew about 300 unitholders. The Reit's portfolio was valued at $3.21 billion as at Aug 31 - 1.7 per cent higher than last year's valuation of $3.16 billion.ST PHOTO: ONG WEE JIN

It is changing tenant mix at The Clementi Mall to strengthen its position, says CEO

SPH Reit will continue to be "mindful of competition" amid the challenging environment for the retail industry, said the chief executive of the Reit manager, Ms Susan Leng, yesterday.

Ms Leng said the Reit (real estate investment trust) is changing the tenancy mix at The Clementi Mall so that it will "be in a better position" for the longer term.

"Competition in the west has intensified over the last few years... but we've grown from strength to strength," she said, noting that the mall, which completed its first renewal cycle last year.

Ms Leng was responding to questions on The Clementi Mall's negative rental reversion of 5.6 per cent at the Reit's annual general meeting, which attracted more than 300 unitholders.

Across the portfolio, however, the Reit's overall rental reversions are up 8.6 per cent.

"It's the best time for us to put in the right mix," said Ms Leng, noting that the mall is due for a major rental renewal in 2017. The Reit, she added, is working to attract "good retailers" and strengthen its offerings.

At the meeting, unitholders also asked about the potential acquisition of The Seletar Mall, owned by the Reit's sponsor Singapore Press Holdings (SPH).

SPH had said last year that SPH Reit will have the "first right of refusal" on The Seletar Mall when it decides to sell the mall.

Chairman of the Reit manager Leong Horn Kee, said: "SPH is (working on) stabilising the property, bringing up the level in terms of the tenancy, in terms of the returns on the yield if possible.

"So it's up to them to work the property up to a higher level before deciding if they want to sell it... When the time comes, we as the board will separately and internally decide."

Dr Leong also noted that the Singapore economy is expected to grow modestly amid increasing uncertainties in the global environment, while lower tourist arrivals and manpower shortages have posed challenges to the local retail industry.

"We will remain focused on proactively managing the properties to deliver sustainable returns," he said. "We will also carry out continual asset enhancement to stay at the forefront of the retail arena."

Ms Leng said the Reit is expected to "stay resilient", given that its portfolio, which also includes Paragon, caters to a diverse range of tenants and shoppers. It is also looking at opportunities for growth both locally and overseas, she added.

SPH Reit delivered a distribution of 5.47 cents to unitholders for the full year ended Aug 31, which translates to a distribution yield of 5.7 per cent, based on the closing price of 96 cents as at Aug 31.

This was 0.7 per cent higher than last year's distribution.

Gross revenue was up 1.4 per cent at S$205.1 million, while net property income rose 3.3 per cent to S$155.6 million.

The Reit's portfolio was valued at $3.21 billion as at Aug 31 - 1.7 per cent higher than last year's valuation of $3.16 billion.

SPH Reit units closed one cent or 1.1 per cent higher at 93 cents yesterday.

SPH Reit delivered a distribution of 5.47 cents to unitholders for the full year ended Aug 31, which translates to a distribution yield of 5.7 per cent, based on the closing price of 96 cents as at Aug 31.

A version of this article appeared in the print edition of The Straits Times on November 28, 2015, with the headline 'SPH Reit 'responding to retail challenges''. Print Edition | Subscribe