Paragon Reit H1 2023 DPU falls 15.7% to S$0.0242

PARAGON Reit posted a 15.7 per cent decrease in distribution per unit (DPU) to S$0.0242 for the first half of its 2023 financial year ended Jun 30, from S$0.0287 in the same period last year. 

The DPU translates to a distribution yield of 5.1 per cent, based on the real estate investment trust’s (Reit) closing price of $0.96 as at June 30. The latest distribution will be paid out on Sep 22. 

In a bourse filing on Monday (Aug 7), the Reit’s manager said the fall in DPU was primarily due to higher finance costs amid the current high interest rate environment. The income available for distribution had shrunk by 13.8 per cent to S$70.6 million, from S$82 million in the corresponding period last year. Finance costs also hiked by S$14.7 million to S$25.5 million in H1 2023, from S$10.9 million in the year-ago period. 

Gross revenue inched up by 0.6 per cent to S$143.1 million, from S$142.3 million over the same period a year ago. Net property income was also up by a marginal 0.1 per cent to S$106.1 million, from S$106 million in the corresponding period last year.

For its Singapore properties – which includes Paragon, The Clementi Mall and The Rail Mall – tenant sales rose 3 per cent year on year, while footfall was up 24 per cent year on year. 

This came on the back of a tourism recovery, with the number of international visitors skyrocketing 320 per cent year on year to 6.3 million in H1 2023, said the manager. 

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Still, the manager noted that Singapore’s average monthly visitors of 1.1 million is around 71 per cent of 2019’s monthly average of 1.6 million – largely due to a slower rebound in Chinese tourists visiting the city-state. 

Likewise in Australia, tenant sales and footfall remained “resilient”, growing by 13 per cent and 5 per cent year on year, respectively, in the first half of 2023. 

The manager added that the Reit’s assets continue to “benefit from resilient retail spending”, with “near full occupancy” across its portfolio and a weighted average lease expiry of 5.3 years by net lettable area. 

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Units of the trust closed flat at S$0.95 on Monday, before the announcement.