Paragon Reit, formerly SPH Reit, sees recovery in tenant sales to near pre-pandemic levels

SINGAPORE - With the easing of virus curbs, Paragon Reit saw a strong recovery in tenant sales to near pre-Covid-19 levels, its manager said in a business update on Monday.

Previously known as SPH Reit,

it declared a distribution per unit (DPU) of 1.72 cents for the four months ended Dec 31, 2022, unchanged from a year ago.

This represents an annualised yield of 5.7 per cent and puts the DPU for the 16 months ended Dec 31, 2022, at 7.24 cents. The distribution will be paid on March 28.

The real estate investment trust (Reit) announced in July 2022 a change to its financial year-end from Aug 31 to Dec 31, resulting in a 16-month financial year between September 2021 and December 2022. After this, its financial year will return to a 12-month period ending on Dec 31 each year.

Gross revenue for the 2022 16-month financial year was 1.8 per cent higher than the previous corresponding 16-month period at $376.4 million, while net property income rose 3.3 per cent to $279.9 million. The portfolio occupancy rate was 98.5 per cent, and tenant retention ratio was 80 per cent.

The Reit attributed its boost in performance to a return of travel and leisure demand as pandemic restrictions eased. This resulted in “increased visitation and spending”, with its Singapore mall portfolio – namely Paragon, Clementi Mall and Rail Mall – seeing a 24 per cent jump in tenant sales and footfall, said the Reit manager.

Sentiment was weaker in Australia, with footfall decreasing by 1 per cent due to pandemic restrictions in the country. Still, most of Australia’s social distancing requirements had eased in early 2022, resulting in a 7 per cent hike in tenant sales.

Paragon Reit also posted a better rental reversion rate to minus 4.1 per cent in the 16-month 2022 financial year, from minus 8.4 per cent in the corresponding previous period, mainly due to recovering retail sentiment. Weighted average lease expiry stood at 5.2 years by net lettable area and 2.8 years by gross rental income.

Paragon Reit chief executive Susan Leng said: “As we return to normalcy, our operating metrics in terms of tenant sales and footfall continue to improve. We will continue to proactively manage our assets and work closely with our stakeholders to ensure we remain at the forefront of evolving retail and consumer trends.”

Paragon Reit units closed unchanged at 97 cents on Tuesday.

THE BUSINESS TIMES