The uncertain economic climate is doing no favours for the retail industry, but SPH Reit Management said the properties in the trust's portfolio are well placed to weather the rough waters ahead.
Both Paragon and The Clementi Mall, the two properties in the SPH Reit stable, have shown resilience, with positive rental reversion and full occupancy, the manager said.
This boosted distribution per unit for the first quarter to 1.34 cents, up by 0.8 per cent from the same period a year ago. Net asset value per unit was 94 cents.
Income available for distribution to unit holders was $36.4 million for the three months to Nov 30, an increase of 3 per cent compared with the same period a year earlier.
Gross revenue grew by 0.9 per cent, to $52.6 million.
Proactive management of utility and other key service contracts helped net property income rise 3.3 per cent from a year earlier, to $41.4 million, SPH Reit Management said.
Paragon achieved a moderate rental uplift of 4.4 per cent for new and renewed leases in the first quarter, while The Clementi Mall recorded a positive rental reversion of 9.1 per cent, with renewal of 0.7 per cent of net lettable area.
The Clementi Mall's second renewal cycle this year is progressing well, the manager noted. With around 85 per cent of leases expiring this year, about 60 per cent by gross rental income has been renewed ahead of time.
"Despite headwinds in the retail environment, both properties are well positioned to deliver steady performance," SPH Reit Management added.
The manager noted that it remains focused on continually refreshing the properties' tenant mix and creating new retail offers.
Paragon, for example, recently welcomed the first Singapore outlet of popular Bangkok eatery Greyhound Cafe and a new Puma concept store.
SPH Reit Management chief executive Susan Leng said: "We are pleased that SPH Reit has kept its growth momentum with steady distribution, 100 per cent committed occupancy and positive rental reversion for both malls."
She noted that the retail environment will remain challenging this year amid modest economic growth and heightened uncertainty globally.
But she said: "Our assets are well located with clear market positioning to serve us well in embracing the challenges ahead."
SPH Reit units ended the day half a cent lower at 97 cents.
Since SPH Reit's listing, the manager has been receiving payment for services fully in the form of units. But in accordance with an amendment to the trust deed, and to minimise any long-term dilutive effect with payment fully in units, the manager said it intends to elect for partial payment in cash.
The proportion of cash will be determined before the start of each quarter without significantly affecting annual DPU, SPH Reit Management said.