SPH Reit announces higher-than-forecast maiden distributable income

NEWLY-LISTED SPH Reit on Thursday said that distributable income exceeded forecasts due to lower-than-expected expenses from operating its properties.

Distributable income was $46.5 million for the period July 24 to Nov 30.

That was 1.9 per cent higher than the forecast of $45.7 million set out in the initial public offering (IPO) prospectus.

July 24 was the listing date of SPH Reit.

The maiden distribution for the shopping mall owner will be 1.86 cents per unit, 2.2 per cent higher than the 1.82 cents forecast for this period.

Based on the IPO price of 90 cents a unit, the annualised distribution yield works out to 5.8 per cent.

Gross revenue for the period was $70.4 million, about 0.7 per cent below forecast due to lower gross rentals from Paragon while gross revenue from The Clementi Mall was relatively flat.

But property operating expenses were 3.9 per cent lower than forecast at $19 million.

This was due to lower property taxes, marketing costs and utilities expenses, though higher maintenance costs partially mitigated this effect.

Thus, net property income was 0.5 per cent higher than forecast, at $51.4 million.

"We are pleased that SPH Reit's inaugural distribution has exceeded IPO forecast," said Ms Susan Leng, chief executive of SPH Reit Management, which manages the real estate investment trust.

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