Paragon revenue dulls SPH REIT results

A decline in Paragon revenue caused a modest decline in the net property income (NPI) of SPH REIT in the November quarter.

But the result may have been worse had it not been for a higher contribution from The Clementi Mall and The Rail Mall, which mitigated the Paragon revenue drop.

SPH REIT Management has reported income of S$41.8 million, a decrease of S$400,000 – or 1 per cent – year on year.

The company said property-operating expenses increased as a result of higher marketing

expenses for the quarter, which also affected the NPI. The income available for distribution to unitholders of S$35.9 million was S$700,000 (1.9 per cent) lower compared to the same period a year earlier.

SPH REIT Management said its properties maintained high occupancy of 99.2 per cent and Paragon recorded positive rental reversion of 10.1 per cent for new and renewed leases for the quarter. That represented 8.4 per cent of Paragon’s net lettable area.

“We are pleased that SPH REIT continued to deliver steady distribution with overall positive rental reversion of 9.7 per cent for the quarter,” said Susan Leng, CEO of SPH REIT Management.

“In line with our strategy of acquiring yield-accretive retail properties that provide sustainable returns to unitholders, SPH REIT completed the acquisition of 85 per cent stake in

Figtree Grove Shopping Centre, with our joint venture partner, Moelis Australia holding the remaining stake. The property is an established sub-regional shopping centre in Wollongong, NSW, Australia and is a strategic fit with SPH REIT’s portfolio of quality assets. “This acquisition provides SPH REIT with the opportunity to further create value and continue to deliver long term returns for unitholders. The full contribution from Figtree Grove Shopping Centre is expected in the second half of the year,” she said.

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