SPH REIT DPU up 0.7% to 1.42 cents in Q4

This was driven by higher rental income from both Paragon and The Clementi Mall.

SPH REIT's Q4 distribution per unit (DPU) went up 0.7% YoY to 1.42 cents in Q4.

According to OCBC Investment Research, gross revenue grew 1.3% to $52.9m, whilst net property income rose 3.9% to $41.8m.

This was driven by higher rental income from its properties Paragon and The Clementi Mall (TCM).

This was also supported by higher NPI margins, which rose +2 ppt to 79%, due to proactive management of utility contracts, lower property tax and maintenance expenses.

Here's more from OCBC:

Both Paragon and TCM maintained their 100% committed occupancy, as at end-FY17. However, a downside surprise came from Paragon’s negative rental reversion figure of 0.8% for expiries in FY17. 

As rental reversions for the mall were positive in 9MFY17 at 3.6%, this implies a weak 4QFY17 showing. The softness came largely from the retail space, as reversions for the office/medical leases were flat. 

TCM fared better, with positive rental uplifts of 3.7% for the full-year, thus resulting in an overall portfolio rental reversion of 1.2% in FY17. Shopper traffic for both malls was stable. While Paragon achieved higher tenant sales of 2.1% in FY17, TCM saw a 5.8% decline.