SPH plans to increase recurring income from property segments

Singapore

SINGAPORE Press Holdings (SPH) is looking to increase recurring income from its property segments, which include the retail and purpose-built student accommodation (PBSA) businesses.

This income will be complemented by growth in the aged care and digital media businesses, the group said in response to questions from shareholders ahead of its annual general meeting taking place on Friday.

SPH, which publishes The Business Times, said that despite disruption caused by the pandemic, net operating income for its PBSA segment increased 29 per cent year on year in FY2020.

Furthermore, 88 per cent of target revenue has been achieved for FY2021, as at Nov 20, 2020.

"Since diversifying into the defensive cash-yielding PBSA asset class, SPH is on track to become a sizeable PBSA owner-operator with 7,723 beds across 28 assets in the UK and Germany worth over S$1.4 billion.

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"SPH has scaled up with two distinct brands, Capitol Students and Student Castle, to capture both the domestic and international student demand," the group said.

It added that it is still considering listing its PBSA assets.

In response to questions from the Securities Investors Association (Singapore), SPH said the investment in PBSA has returned a cumulative operating profit of about S$20 million since December 2018.

Separately, the group has also made several divestments that amounted to a total gain of about S$293 million.

The largest gain of S$149.7 million came from its divestment of classifieds firm 701Search to Norwegian telco Telenor Group in FY2017.

Another S$70 million came from the divestments from the Treasury & Investment portfolio in FY2017.

That said, the group has progressively reduced the size of its treasury investments over the years and redeployed it into recurring income-generating assets with higher yields.

On its Woodleigh Residences project, SPH said about 60 per cent of total units have been sold as at Nov 20, at an average price of S$1,908 per square foot.

Business operations were stable for the Orange Valley aged care assets and the Japan assets are on master leases with credible operators who continue to pay rent in full and on time, it added.

SPH said it will continue to focus on digitalisation in its media business.

Its efforts have translated to a 52.5 per cent year-on-year growth in digital circulation, particularly boosted by higher sales from news of Covid-19 and the 2020 general election in Singapore.

The counter closed at S$1.23 on Thursday, up S$0.01 or 0.82 per cent.