Higher rental income from shopping mall Paragon helped to lift SPH Reit's distribution for the third quarter.
The real estate investment trust (Reit), which also owns The Clementi Mall, reported a distributable income of $35 million for the three months to May 31, an increase of 1.1 per cent over the same period last year.
This translates to a distribution per unit of 1.36 cents, up 0.7 per cent, to be paid out on Aug 16, the manager said yesterday.
Gross revenue climbed 1.9 per cent to $52.2 million, on the back of higher rental income achieved from Paragon.
Property operating expenses were 2.5 per cent higher from the same period a year earlier, at $12.2 million, mainly due to higher property tax, maintenance and marketing expenses.
The increase was cushioned by savings in utilities from lower tariff rates and more efficient energy consumption.
Net property income, as a result, inched up 1.8 per cent to $40 million.
- AT A GLANCE
$52.2 million (+1.9%)
NET PROPERTY INCOME
$40 million (+1.8%)
DISTRIBUTION PER UNIT
1.36 cents (+0.7%)
SPH Reit noted that the retail scene remains challenging.
Last month, the Department of Statistics said that stripping out a surge in car purchases, retail sales dipped 3 per cent in April from the same month a year ago.
In fact, minus car sales, overall retail sales have dropped for three months in a row.
Tourism receipts have also fallen despite international visitor arrivals rising 14.1 per cent in the first four months of this year, compared with the same period in 2015.
Tourism receipts fell by 7.6 per cent to $21.8 billion last year and only modest growth in visitor numbers is expected for this year.
Nonetheless, the Reit manager said it has a portfolio of two "high- quality and well-positioned retail properties in prime locations".
"Paragon remained resilient and had turned in a steady performance through previous economic cycles. The Clementi Mall continued to attract steady footfall." Both properties continued to demonstrate resilience, with positive rental reversion and 100 per cent occupancy, the manager added.
Paragon achieved a moderate rental uplift of 4.9 per cent for new and renewed leases in the first nine months of the financial year.
The Clementi Mall recorded a positive rental reversion of 4.5 per cent in the same period.
SPH Reit units closed flat at 94 cents yesterday.