Singapore-listed REIT beats IPO forecast

Singapore-listed REIT BHG Retail’s first-year results beat their IPO forecasts.

BHG Retail Trust Management, the manager of BHG Retail REIT says that for the fourth quarter ended December 31, net property income in RMB was 6.3 per cent higher compared to prediction.  

BHG Retail REIT is the first pure-play China Retail REIT sponsored by a leading China integrated retail group. The REIT was listed on Singapore’s main board on December 11, 2015.

Its portfolio comprises five retail properties, Beijing Wanliu (60 per cent), Hefei Mengchenglu, Chengdu Konggang, Dalian Jinsanjiao and Xining Huayuan located in tier 1, tier 2 and other cities of significant economic potential in China. As at the end of 2016, the portfolio had a gross floor area of about 264,000 sqm and a “committed occupancy” of 97.6 per cent, with a total appraised value of approximately S$810.7 million.

The trust says leasing activities during the year “reflected resilient demand from existing and new tenants amidst macro-headwinds”.

Trust management CEO Chan Iz-Lynn said that for the financial period from November 18, 2015 December 31, 2016, the portfolio’s net property income in Renminbi exceeded forecast by 4.2 per cent and distribution per unit was 2.4 per cent above forecast, despite the implementation of a change in Beijing’s property tax to one based on revenue, with effect from July 1, 2016.

“This heartening performance from the malls reflects the resilience of our experiential-focused community portfolio and the expertise of the property management team behind these community malls.

“Going forward, we will continue to strengthen our malls’ identity as the mall of choice, pursue opportunities that are DPU-yield accretive, and deliver sustainable returns to our unitholders,” she said.

Meanwhile, Chengdu Konggang Mall has embarked on an asset enhancement initiative to elevate the mall’s active lifestyle offering, in light of rising demand for sports apparels at the mall. The project aims to introduce a new active lifestyle themed concept and to revitalise its basement one offer. New and existing tenants to open there include Nike, Adidas, Jordan, and Li Ning.

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