SINGAPORE - Retail landlord SPH Reit declared distribution per unit of 1.37 cents for the third quarter ended May 31, unchanged from a year ago.
But net property income marked a 3.8 per cent decline from a year ago to $40.56 million, mainly due to lower revenue from Paragon. Gross revenue fell 2.9 per cent year on year to $51.77 million.
Paragon recorded a negative rental reversion of 6.2 per cent for new and renewed leases during the nine months of the fiscal year. The Reit manager explained that these leases were committed about a year ago, during the retail sales downturn. But the rental decline was more moderated in the third quarter compared to the first half of fiscal 2018.
"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.
The Clementi Mall recorded a positive rental reversion of 5.3 per cent during the first nine months of the fiscal year, upon renewal of 3.2 per cent of the mall's net lettable area. The overall portfolio registered a negative rental reversion of 6 per cent.
In line with the recovery in retail sales since June 2017, tenant sales in the malls have continued to register growth. The portfolio of two shopping malls was close to full occupancy at 99.6 per cent as at May 31.
Last month, SPH Reit completed the acquisition of The Rail Mall, a cluster of shop units along Upper Bukit Timah Road, for $63.24 million.
Meanwhile, it is introducing a new shopping concept on the third floor of Paragon in Orchard.
"This concept offers open store design for seamless interactions across brands, merchandise and shoppers, and also introduces carefully curated new-to-market concepts," said Ms Susan Leng, CEO of SPH Reit Management.
The first phase of this new concept was launched in June and when fully completed in December, will span across about 16,000 sq ft of more than 20 fashion, lifestyle and F&B tenants.
Paragon also welcomed MCM, its first flagship store in South-east Asia at Level One.
SPH Reit will be paying out the fiscal third quarter distribution to unit holders on Aug 17.