Retail landlord SPH Reit has declared a distribution per unit (DPU) of 1.37 cents for the third quarter, unchanged from a year earlier.
But net property income slipped 3.8 per cent to $40.6 million, mainly due to lower rental income from Paragon.
Gross revenue fell 2.9 per cent year-on-year to $51.8 million for the three months to May 31.
Paragon recorded a negative rental reversion of 6.2 per cent for new and renewed leases during the nine months of the fiscal year - in other words, lower average rents of renewed and new lease terms compared with preceding lease terms.
The Reit manager said these leases were committed about a year ago during the retail sales downturn. But the rental decline was more moderate in the third quarter compared with the first half of the 2018 financial year.
"As part of our longstanding philosophy of partnering tenants for mutual sustainability, the rental negotiation with tenants took into consideration occupancy cost and we continue to work closely with them as they ride through cyclical and structural changes," SPH Reit Management said.
Net property income declined 1 per cent to $125 million in the first nine months of the year, amid a 0.7 per cent drop in gross revenue to $158.8 million.
AT A GLANCE
GROSS REVENUE: $51.8 million (-2.9%)
NET PROPERTY INCOME: $40.6 million (-3.8%)
DISTRIBUTION PER UNIT: 1.37 cents (unchanged)
A positive rental reversion of 5.3 per cent was achieved at The Clementi Mall during the first nine months. Leases for 3.2 per cent of the mall's net lettable area were renewed.
SPH Reit's overall portfolio registered a negative rental reversion of 6 per cent. But in line with the recovery in retail sales since June last year, tenant sales in the malls have continued to grow. Its portfolio of two malls was close to full occupancy at 99.6 per cent.
Last month, SPH Reit completed the acquisition of The Rail Mall, a cluster of shop units in Upper Bukit Timah Road, for $63.24 million.
A new loan of $45 million was established to partially finance the acquisition. Including the additional loan, the Reit's gearing remained low at about 26 per cent.
Meanwhile, the Reit manager is introducing a new shopping experience at level 3 of Paragon, offering open store design for interactions across brands, merchandise and shoppers, and carefully curated new-to-market concepts.
The first phase was launched last month and, when fully completed in December, will span about 16,000 sq ft of more than 20 fashion, lifestyle and food and beverage tenants.
SPH Reit will pay out the third-quarter distribution to unit holders on Aug 17.
Units of SPH Reit yesterday rose 0.5 cent to $1.