SPHREIT Financial Results Ending 28 Feb 2017

“SPH REIT has continued to deliver resilient financial and operating performance despite the prevailing economic headwinds and weak consumer sentiment. Working in close partnership with our tenants, both malls maintained its track record of 100% committed occupancy. We continue to curate a tenancy mix that will strengthen the positioning of each mall. Our tenants are the cornerstone of our business. Besides introducing new tenants to the malls, we proactively engage our tenants to rejuvenate their concepts and ambience of their stores. We strive to deliver stable and sustainable returns for Unitholders.”

Ms Susan Leng, CEO of SPH REIT Management Pte. Ltd.

  • 1.40 cents (2Q FY17, 1 Dec 2016 – 28 Feb 2017)
  • 17 Apr 2017 (Ex-date). 19 Apr 2017 (Record date). 22 May 2017 (Payment date)

SPH REIT delivered steady performance

  • 2Q 2017 DPU was 1.40 cents
  • Maintained 100% committed occupancy

SPH REIT Management Pte. Ltd. (“SPH RM” or the “Manager”), the Manager of SPH REIT, reported that gross revenue for the second quarter ended 28 February 2017 (“2Q 2017”) grew S$0.9 million (1.7%) to S$54.0 million, on the back of higher rental income. Net property income (“NPI”) of S$42.7 million was S$2.1 million (5.2%) higher in 2Q 2017 compared to the same quarter last year (“2Q 2016”), mainly due to proactive management of utility contract and lower property tax as last year’s result included one-off provision for prior years’ property tax. Excluding the effect of the property tax provision, NPI increase was S$1.2 million (2.9%) compared to 2Q 2016.

Income available for distribution to unitholders increased by S$0.9 million (2.4%) to S$37.3 million for 2Q 2017. Distribution per unit (“DPU”) for 2Q 2017 was maintained at 1.40 cents, same as 2Q 2016. The aggregate DPU was 2.74 cents for the half year ended 28 February 2017 (“1H 2017”). The 2Q 2017 distribution will be paid to unitholders on 22 May 2017.

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Resilient operational performance

Both properties continued to demonstrate resilience, with positive rental reversion and full occupancy. Paragon achieved a moderate rental uplift of 4.3% for new and renewed leases in 1H 2017. The Clementi Mall’s second renewal cycle in 2017 is progressing well. With about 85% of leases expiring in 2017, about 74% by gross rental income have been renewed ahead of time.

The Clementi Mall recorded a positive rental reversion of 8.3% for the leases 2 expiring in 1H 2017 representing 30% of the second renewal cycle. The Clementi Mall received strong endorsement by tenants with an estimated retention rate of 90% by NLA and management also took the opportunity to curate fresh F&B concepts to continually excite the shoppers.

 

Capital Management

SPH REIT has a well-staggered debt maturity profile, with weighted average term to maturity of 2.6 years and gearing level of 25.7% as at 28 February 2017. It registered an average cost of debt of 2.79% p.a. for 1H 2017. To mitigate exposure to interest rate risk, 85.9% of the total borrowing was on fixed rate basis.

 

Attachments

 

Important Notice

This release may contain forward-looking statements that involve risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, competition from similar developments, shifts in expected levels of property rental income, changes in operating expenses, including employee wages, benefits and training, property expenses and governmental and public policy changes and the continued availability of financing in the amounts and the terms necessary to support future business. Investors are cautioned not to place undue reliance on these forward-looking statements, which are based on current view of SPH REIT Management Pte. Ltd. (as the manager of SPH REIT) on future events.

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