SPH Reit's distributable income rises 3.8%

SPH Reit, which manages the Paragon (pictured), saw its gross revenue grow 2.9 per cent in the first quarter.
SPH Reit, which manages the Paragon (pictured), saw its gross revenue grow 2.9 per cent in the first quarter.ST PHOTO: SEAH KWANG PENG

SINGAPORE - Higher rental income and management of expenses helped SPH Reit grow its first quarter distribution, said its manager on Tuesday (Jan 5).

Income available for distribution to unitholders was S$35.3 million for the three months ended Nov 30 last year, up 3.8 per cent from the same period a year before.

Distribution per unit (DPU) was maintained at 1.33 cents for the quarter, unchanged from a year earlier. It will be paid to unitholders on Feb 15.

Gross revenue grew 2.9 per cent to S$52.1 million while net property income climbed 5.9 per cent to S$40.1 million in the first quarter.

According to the Reit manager, the two properties under management - Paragon and the Clementi Mall - continued to demonstrate resilience and achieved positive rental reversion.

Paragon's occupancy was 99.8 per cent as at Nov 30 last year. The marginal dip from full occupancy was due to timing of amalgamation of space to create a contiguous unit.

"The relatively moderate rental uplift at Paragon of 3.2% for new or renewed leases in the quarter, was mainly due to the prevailing weak retail sentiment," said the Reit manager.

The Clementi Mall remained fully leased, with positive rental reversion of 5.4 per cent for renewal during the quarter.

Paragon continued to see healthy leasing demand and welcomed several international retailers such as Loewe, Ralph Lauren Children, Lalique, and APM Monaco to the mall, said the Reit manager.

It will continue to focus efforts to revitalise the tenant mix, strengthen various clusters and enhance the premier positioning of Paragon.

"We are pleased that SPH Reit has continued to deliver steady financial and operating performance," said said Ms Susan Leng, chief executive of SPH Reit Management.

"To sustain returns to unitholders, we will continue to build firm partnership with tenants and pursue opportunities to reinforce the positioning of our properties."

SPH Reit has a gearing ratio of 25.7 per cent, and a weighted average debt maturity term of 2.7 years as at the end of Nov 30 last year.

To mitigate exposure to interest rate risk, 84.7 per cent of the total borrowing was on fixed rate basis, said the Reit manager.

"The air handling unit decanting project at Paragon is progressing on schedule. We have identified an asset enhancement initiative for The Clementi Mall, which will create a more efficient layout and increase the range and depth of merchandise to drive higher sales," said Ms Leng.

"Both projects will create value and strengthen the long-term sustainability of the properties. We are confident that our philosophy of continual asset enhancement will sustain future performance."

SPH Reit units yesterday closed 0.5 cents higher at 95.5 Singapore cents.