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SPH Reit's second quarter DPU up 0.7% to 1.41 cents

Gross revenue climbs 8.5%, thanks to contributions from new acquisitions

Singapore

SPH Reit's distribution per unit (DPU) for the second quarter ended Feb 28, 2019 edged up 0.7 per cent to 1.41 Singapore cents, from 1.4 cents a year ago.

Gross revenue increased 8.5 per cent year on year to S$58.12 million, thanks to contributions from The Rail Mall and Figtree Grove Shopping Centre which were acquired in June and December last year, respectively. Net property income (NPI) was also 8.5 per cent higher, at S$45.86 million, while income available for distribution clocked S$37.02 million, representing a 2.5 per cent gain from a year ago.

The Reit's properties maintained an occupancy of 99.2 per cent as at Q2, while the overall portfolio registered a positive rental reversion of 8.4 per cent for the first half financial year. Paragon recorded positive rental reversion of 8.6 per cent for new and renewed leases for H1, which represented 15.2 per cent of the mall's net lettable area. The Clementi Mall and The Rail Mall recorded positive rental reversion of 5 per cent and 6.2 per cent, respectively for H1.

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For the first half financial year, DPU totalled 2.75 cents, versus 2.74 cents previously. Gross revenue rose 4.5 per cent year on year to S$111.93 million, thanks to the two acquisitions last year, although the increase was partially offset by lower rental income from Paragon. NPI was 3.8 per cent higher at S$87.64 million and income available for distribution was up 0.3 per cent at S$72.87 million.

During the six month period, property operating expenses rose 7.4 per cent to S$24.29 million, in line with the acquisitions. Finance costs increased by 16.3 per cent to S$13.95 million due to additional interest expense from new loans to finance the acquisition of Figtree Grove Shopping Centre in Australia. The average cost of debt was 2.88 per cent per annum for H1, while total borrowings were S$1.1 billion, as at Feb 28. Gearing stood at 30.1 per cent and weighted average term to maturity was 2.1 years.

Susan Leng, chief executive officer of SPH REIT Management, said: "SPH REIT continues to maintain high occupancy and delivers stable distribution. The overall portfolio registered a positive rental reversion of 8.4 per cent for 1H 2019, supported by growth in overall tenant sales." She added: "We continue to seek opportunities to enhance our properties and create long-term sustainable value for our unitholders." The DPU will be paid to unitholders on May 17.

Units in the Reit closed at S$1.06 on Friday, unchanged. The results were announced after market close.