STRONGER sentiment in the retail sector lifted the distribution per unit (DPU) of SPH Reit : SK6U 0% to 5.52 Singapore cents for the 12 months ended Aug 31 (12M FY2022), up 2.2 per cent from the previous year.

As previously announced, the real estate investment trust (Reit) is changing its financial year end from Aug 31 to Dec 31, resulting in a 16-month FY2022. Distributions for the four months ending December will be declared in February 2023.

Gross revenue for 12M FY2022 came in 1.7 per cent higher at S$281.9 million, while net property income (NPI) grew 3.5 per cent to S$209.7 million. The portfolio occupancy rate stood at 97.5 per cent.

SPH Reit also posted an improvement in rental reversions, with a -2.8 per cent portfolio rental reversion rate in 12M FY2022, compared to -8.4 per cent the previous year. Weighted average lease expiry stood at 5.3 years by net lettable area and three years by gross rental income.

The Reit’s performance was boosted by an 8.8 per cent increase in footfall at its Singapore assets – with Paragon recording a 16.4 per cent increase in footfall to 13.3 million, and The Clementi Mall’s footfall rising 15.9 per cent to 17.7 million. As a result, tenant sales for Paragon and The Clementi Mall improved by 25.6 per cent and 8.8 per cent respectively.

Sentiment was however weaker in Australia, where footfall dropped 3.6 per cent. In particular, the Figtree Grove Shopping Centre in New South Wales was affected by a lockdown from June to October 2021, leading to a 9 per cent drop in footfall.

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Nevertheless, SPH Reit’s other Australian asset, Westfield Marion in Adelaide, was spared from lockdowns and saw a smaller 1.7 per cent fall in footfall.

For the six-month period ending August, SPH Reit posted a 4.1 per cent fall in DPU to 2.84 Singapore cents. This was even as gross revenue for the period rose 2.2 per cent to S$140.2 million, while NPI was up 6.8 per cent to S$104.4 million.

“The return to normalcy is evident in Singapore and Australia, resulting in better performance in footfall as well as tenant sales, particularly at our Singapore assets,” said Susan Leng, CEO of SPH Reit.

Looking ahead, SPH Reit said that it would maintain a disciplined approach to capital management. As at end-August, the proportion of fixed debt is 71 per cent, with an average cost of debt of 1.77 per cent. The Reit has S$1.3 billion in borrowings at a gearing ratio of 30 per cent and a weighted average term to maturity of 2.5 years.

SPH Reit ended last Friday (Oct 7) at S$0.89, up 1.1 per cent or S$0.01.