Higher rental income helped SPH Reit maintain second-quarter distribution in the challenging retail landscape, its manager said yesterday.
The mall owner reported a distributable income of $36.4 million for the three months to Feb 29, a marginal 0.2 per cent increase over the $36.3 million in the same period last year.
This translates to a distribution per unit of 1.4 cents, unchanged from previously, to be paid out on May 13.
Gross revenue climbed 1.2 per cent to $53.1 million on the back of higher rental income from the two properties under management, Paragon and The Clementi Mall.
Property operating expenses were 2.3 per cent higher at $12.5 million due to an additional one-off provision for prior-year property tax, though cushioned by savings in utilities from lower tariff rates and more efficient consumption for new chillers, as well as lower marketing expenses.
AT A GLANCE
Gross revenue: $53.1 million (+1.2%)
Net property income: $40.6 million (+0.9%)
Distribution per unit: 1.4 cents (unchanged)
Net property income, as a result, inched up only 0.9 per cent to $40.6 million. Excluding the effect of the provision, net property income grew 3.2 per cent to $41.5 million.
Gross revenue for the half-year rose 2 per cent to $105.2 million, while net property income expanded 3.3 per cent to $80.7 million.
SPH Reit Management said both Paragon and The Clementi Mall "continued to demonstrate resilience and achieved positive rental reversion".
Paragon's occupancy was 99.9 per cent as at Feb 29. It achieved a moderate rental uplift of 4.3 per cent for new and renewed leases in the first half of the year in spite of the prevailing weak retail sentiment. The Clementi Mall remained fully leased, with a positive rental reversion of 3.1 per cent in the same period.
Ms Susan Leng, chief executive of SPH Reit Management, said: "SPH Reit has continued to deliver a steady performance amid modest economic outlook and challenging retail environment.
"We remain focused on opportunities to create value and strengthen long-term sustainability of the properties," she said.
"Barring any unforeseen circumstances, the two properties are expected to remain resilient, and turn in a steady performance."
The Air Handling Unit decanting project at Paragon, for instance, is progressing on schedule, while the planning for The Clementi Mall's reconfiguration project is under way, said Ms Leng.
SPH Reit closed unchanged at 97 cents yesterday. The results were announced after trading hours.