Decision to acquire The Seletar Mall will depend on asset's sustainability, yield: SPH Reit manager

SINGAPORE - SPH Reit will independently assess The Seletar Mall's sustainability and contribution to yield before adding the mall to its portfolio, said Dr Leong Horn Kee, the chairman of the Reit manager.

He was responding to unitholders at the Reit's annual general meeting on Friday (Dec 2), who renewed calls for the Reit to acquire the suburban mall from sponsor Singapore Press Holdings (SPH).

SPH Reit has the option to acquire The Seletar Mall from SPH under a right of first refusal.

"The question is when SPH is prepared to sell (the asset) to us, and at what price," said Dr Leong.

"We will also need to do our own independent assessment of whether is it yield-accretive and worthwhile for us to acquire."

Ms Susan Leng, the chief executive of the Reit manager, told the 150 unitholders who attended the meeting that the Reit is constantly on the lookout for acquisitions but these cannot be made "at all costs" - they have to be sustainable and contribute to yield.

The Reit distributed 5.5 cents to unitholders in the 2016 financial year, up 0.5 per cent from the previous year. Net property income was $160.9 million, up 3.4 per cent from 2015.

This was a "steady" showing amid the slowing economy and tough retail climate, said Dr Leong.

Consumer sentiment is muted and retailers are also facing structural challenges such as labour constraints and competition from e-commerce, he added.