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SPH Reit raises unit distribution for Q1

Singapore

SPH Reit, which has retail assets in Singapore and Australia under its belt, reported a 3 per cent improvement in distribution per unit (DPU) to 1.38 Singapore cents in the first quarter from 1.34 cents a year earlier, led by steady performance across its commercial properties.

The Singapore-based Reit's gross revenue for the three months to Nov 30 came in nearly 12 per cent higher at S$60 million versus S$54 million in the previous corresponding period, largely owing to better rental income from upscale mall Paragon in Singapore and Figtree Grove Shopping Centre - a sub-regional shopping centre in Wollongong, New South Wales that the Reit acquired in December 2018.

Net property income (NPI) improved 12.4 per cent to S$47 million from S$42 million previously.

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In a statement on Friday, manager SPH Reit Management said the Reit's Singapore assets posted positive rental reversions of 10.9 per cent. Apart from Paragon, its portfolio also comprises The Clementi Mall - a mid-market suburban mall - and The Rail Mall, a unique retail strip.

For the period under review, the NPIs for Paragon and The Clementi Mall rose by S$1.8 million and S$200,000 respectively, while that for The Rail Mall remained flat.

Figtree Grove contributed S$3.1 million to the NPI increase.

SPH Reit's income available for distribution slipped 0.2 per cent to S$35.8 million in the period under review from S$35.9 million, because of the issue of S$300 million in perpetual securities to finance a 50 per cent stake in Westfield Marion Shopping Centre.

The deal, involving South Australia's largest and only regional shopping centre and the second asset it has snapped up Down Under, is expected to be DPU accretive and will further enhance the Reit's portfolio of quality assets, said SPH Reit Management chief executive Susan Leng in the statement.

During the quarter, the Reit's portfolio maintained a high occupancy rate of 99.3 per cent. The Singapore assets registered a 99.4 per cent occupancy rate;The Clementi Mall enjoyed 100 per cent occupancy rate while it stood at 99.8 per cent and 89.5 per cent respectively, for Paragon and The Rail Mall. Figtree Grove's occupancy stayed strong at 99.2 per cent.

As at end-November 2019, SPH Reit's total borrowings stood at S$1.1 billion with a debt gearing ratio of 26.8 per cent. The average debt term to maturity was 2.2 years, with an annualised average cost of debt of 2.91 per cent a year.

The distribution will be paid to unitholders on Feb 14. SPH Reit's sponsor is Singapore Press Holdings (SPH), which also publishes The Business Times.

SPH Reit's units finished at S$1.08 on Friday, up one cent, or 0.9 per cent.