SPH REIT's NPI up 8.5% to $45.86m in Q2

The income boost came from Rail Mall and Figtree Grove Shopping Centre properties.

Singapore Press Holdings Real Estate Investment Trust (SPH REIT) saw its net property income (NPI) rose 8.5% YoY to $45.86m in Q2 2019 from $42.27m in 2018, an announcement revealed. Gross revenue also climbed 8.5% YoY to $58.12m.

In H1 2019, NPI grew 3.8% YoY to $87.64m from $84.46m, whilst revenue edged up 4.5% YoY from $107.07m in 2018 to $111.93m.

The income boost came amidst strong contributions from The Rail Mall and Figtree Grove Shopping Centre, which were acquired on 28 June and 21 December 2018, respectively.

According to the SPH REIT, its properties maintained high occupancy at 99.2% as at Q2 2019. “Paragon continue to record positive rental reversion of 8.6% for new and renewed leases for H1 2019,” the firm noted. “This represented 15.2% of Paragon’s net lettable area.”

Meanwhile, The Clementi Mall and The Rail Mall recorded positive rental reversion of 5.0% and 6.2%, respectively, for H1 2019. The overall portfolio registered a positive rental reversion of 8.4%.

Also read: SPH REIT's acquisition of Seletar Mall could boost firm's DPU by 5% per annum

New loans were established in December 2018 to finance the acquisition of Figtree Grove Shopping Centre, with total borrowings of $1.1b as at 28 February 2019. The annualised average cost of debt was 2.88% per annum for H1 2019.

“The overall portfolio registered a positive rental reversion of 8.4% for 1H 2019 supported by growth in overall tenant sales. On 21 December 2018, SPH REIT completed the acquisition of an 85% stake in Figtree Grove Shopping Centre, an established sub-regional shopping centre in Wollongong, New South Wales, Australia,” Susan Leng, CEO of SPH REIT Management, said in a statement.

Tenant sales at Figtree Grove Shopping Centre stood at 47.7% above benchmark for malls in the same category, as reported by the independent national valuer, m3 Property.

“The acquisition of this quality asset is in-line with our strategy to acquire yield-accretive retail properties. We continue to seek opportunities to enhance our properties and create long-term sustainable value for our unitholders,” Leng added.

Income available for distribution to unitholders of $37m for Q2 2019 rose 2.5% YoY or $900,000. Distribution per unit (DPU) for Q2 2019 was 1.41 cents, an increase of 0.7% against Q2 2018. The Q2 2019 distribution will be paid to unitholders on 17 May 2019.