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Big Break thru for Equition
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PhillipTan
Supreme |
02-Sep-2021 14:05
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Eleven of Singapore' s smaller Reits enter FTSE EPRA Nareit Global Real Estate IndexEleven of Singapore' s smaller Reits have made it into the FTSE EPRA Nareit Global Real Estate Index series, according to the index series' quarterly review changes announced by FTSE Russell on Sept 1.The entries into the FTSE EPRA Nareit Global Developed Index include AIMS APAC Reit, ARA Logos Logistics Trust, Cromwell European Reit, ESR-Reit, Far East Hospitality Trust, Keppel Pacific Oak US Reit, Lendlease Global Commercial Reit, OUE Commercial Reit, Prime US Reit, SPH Reit and Starhill Global Reit. FTSE Russell noted that the increased number of additions this quarter was due to the updated thresholds for the Developed Asia series. In June, the investable market cap threshold was lowered to 0.1 per cent of the securities' respective regional index for additions to the Developed Asia series, compared to 0.3 per cent previously. For deletions from the index series, the threshold was lowered to 0.05 per cent from 0.15 per cent. The review may be subject to changes until the close of business on Sept 3, and all constituent changes will be applied after the close of business on Sept 17. The index series, which tracks the performance of listed real estate companies and Reits, is a global benchmark jointly developed by FTSE Russell with the EPRA (European Public Real Estate Association) and the Nareit (National Association of Real Estate Investment Trusts). Prior to the review, there were 17 Singapore Reits and property trusts in the FTSE EPRA Nareit Developed Index, according to the index' s factsheet as at July 30, 2021. |
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PhillipTan
Supreme |
28-Aug-2021 04:05
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CGS-CIMB sees several re-rating catalysts for SPH REIT, including its being beneficiary of economic reopeningCGS-CIMB Research analysts Eing Kar Mei and Lock Mun Yee have kept " add" on SPH REIT as they see several positive re-rating factors going on for the REIT.The REIT' s Paragon Shopping Centre is the largest listed mall along the Orchard shopping belt. The mall stands to be a beneficiary of the easing Covid-19 restrictions and the reopening of Singapore' s borders. Paragon is SPH REIT' s largest asset by value, representing 64% of the REIT' s portfolio in FY2020. Some 20-30% of the mall' s tenant sales before Covid-19 were generated from tourist spending, note the analysts. " We expect Paragon' s tenant sales to improve in tandem with the higher Covid-19 vaccination rate and easing restrictions," they write in an Aug 26 report. " Meanwhile, tenant sales of Clementi Mall, Westfield Marion and Figtree Grove have recovered near or to pre-Covid-19 levels. We expect these three malls to continue supporting SPH' s REIT income," they add. The asset enhancement initiatives (AEIs) planned for Westfield Marion and Figtree Grove in Australia, once completed, are expected to boost the assets' rental income in the medium term. SPH REIT' s potential inclusion into the FTSE EPRA Nareit Developed Asia Index in September is also expected to give the REIT' s share price a boost. SPH REIT also has a strong balance sheet to support inorganic growth. The REIT currently has one of the lowest gearings among the S-REITs at 30.4% as at 1HFY2021. " If the privatisation of SPH materialises, SPH REIT could tap on a larger acquisition pipeline of assets from Keppel Corp which now owns several retail assets in Singapore and overseas," write the analysts. " The REIT is also open to acquire alternative assets this increases its acquisition opportunities and strengthens its inorganic growth potential. We believe medical suites could be an option," they add. SPH REIT is currently trading at a distribution per unit (DPU) yield of 6%, below its five-year mean of 5.3%. Its peers' DPU yields have generally recovered to their respective five-year means, note Eing and Lock. On this, the analysts have lowered their DPU estimates for the FY2021-2023 by 0.6-2% to factor in the two weeks of mandated rental rebates and lower fees paid in units. They have, accordingly, lowered their target price on the REIT to $1.04 from $1.06 previously. Units in SPH REIT closed 1 cent higher or 1.12% up at 90 cents on Aug 27, with an FY2021 P/B of 1 times and dividend yield of 6.27%, according to CGS-CIMB' s estimates. |
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Lobster
Elite |
05-Aug-2021 12:40
Yells: "Even Adam Khoo believes in the Black Market!" |
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Oh no, fr what I heard, the black market is targeting SPH REITS at below 0.80 and also valuing KEPPEL REITS lower....KC/SPH may be underestimating the sentiments on the ground by pegging the value of both reits at around 0.715 in the takeover offer. For me, it just KC tweaking the value to lessen the dilution of both set of shares. People are forgetting that shareholders are getting a host of assets in return, and the company did say, the takeover will be earnings accretive, dividends accretive and nav enhanced. Fortunately the window for the takeover is short (by end of the year). Closer to the EGM, we will expect all shares of the companies to strengthen. I agree that the merger of SPH REIT and KEPPEL REIT is expected to merge into a mega REITs, cutting down management and operating costs, and putting it in better position to negotiate for better deals, whether in terms of more acquisitions, or debt financing or attracting quality investors, etc.... it would be the impetus to bring the price to greater heights amidst active trading. Both REITS are slow movers in trading prior to this takeover news. Will add more if fall to this lower level vested in both. Pdyohwadfmb |
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Joelton
Supreme |
05-Aug-2021 09:32
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Is a merger between Keppel REIT and SPH REIT on the cards? DBS seems to think so
The acquisition of Singapore Press Holdings (SPH) by Keppel Corporation looks to be a &ldquo winning hand&rdquo according to the analysts, Ho Pei Hwa, Geraldine Wong, Rachel Tan and Derek Tan at DBS Group Research.
In an Aug 3 report, the analysts deem the deal to be a value-accretive one for SPH and &ldquo bolt-on acquisition&rdquo for Keppel.
&ldquo SPH seems to be a rare synergistic good fit to Keppel. Management emphasised that SPH&rsquo s quality portfolio is strongly aligned with Keppel&rsquo s. For instance, PBSA, senior living, stakes in SPH REIT, and its REIT manager strengthen Keppel&rsquo s focus areas in Urban Development, Connectivity, and Asset Management,&rdquo writes the team.
&ldquo The acquisition will also allow Keppel to consolidate its existing ownership of the M1 and Genting Lane data centre asset that are currently jointly owned with SPH,&rdquo it adds.
At the same time, the acquisition should be a comfortable one for Keppel, as &ldquo we do not see the group stretching its financials (gearing should be marginally higher than 0.85 times post the deal),&rdquo says the team.
In the meantime, &ldquo expected earnings per share (EPS) growth of 6% and an 18% boost to Keppel&rsquo s recurring income will be seen as a positive.&rdquo
In addition, Keppel should be able to get its investment back through further strategic actions through the monetisation of SPH&rsquo s non-media assets such as its purpose-built student accommodation (PBSA) and senior living portfolio.
Based on the team&rsquo s estimated revised net asset value (RNAV) of SPH at $2.40 per share, the analysts have estimated a 25 cent accretion to its RNAV for Keppel.
To this end, they have kept &ldquo buy&rdquo on the latter with a target price of $6.20.
The offer to SPH shareholders at $2.09 per share is also deemed attractive by the team.
&ldquo At 1.0 times price-to-net asset value (P/NAV) and [around] 13% below our RNAV of $2.39/share, we recommend that investors accept the offer.&rdquo
&ldquo With an estimated two-thirds of the offer price in the form of consideration units for SPH REIT and Keppel REIT, we do not see this as a total exit for investors,&rdquo they add.
The acquisition is seen as a win-win for investors who may be able to realise partial value in SPH and are still able to &ldquo ride the growth&rdquo of SPH REIT&rsquo s anchor asset, Paragon.
Through Keppel REIT, investors can ride the longer-term growth in terms of capital value in its prime assets in the Central Business District (CBD), note the analysts.
&ldquo With expected boost in liquidity for both S-REITs post transaction, we see compression in their headline yields of 5.0%&rdquo , they write.
Another merger coming up?
With the merger of the parent companies, the team at DBS believes that there may be a potential merger between Keppel REIT and SPH REIT.
To be sure, a merger between both REITs will &ldquo make sense on many fronts for investors&rdquo . When combined, both REITs will form the sixth largest Singapore REIT (S-REIT) at $6.9 billion in terms of market cap. The merger is also likely to drive liquidity into the stock.
The move will overtake Frasers Logistics and Commercial Trust&rsquo s (FLCT) position that&rsquo s currently at sixth place among the S-REITs and will move the largest REIT under Keppel Corp closer to its peer, Mapletree Commercial Trust (MCT).
That said, it hopes that both entities are given room to &ldquo try and grow on their own&rdquo .
The team adds that &ldquo sometimes in the pursuit of scale, we neglect the uniqueness (in terms of exposure, growth, and cyclicality to the economic cycle) of both S-REITs if left on their own&rdquo .
It has maintained &ldquo buy&rdquo on both Keppel REIT and SPH REIT, with an unchanged target price of $1.40 for the former and a raised target price of 92 cents from 80 cents previously for the latter.
The team&rsquo s target prices for both REITs is pegged to Keppel Corp&rsquo s implied offer price for SPH.
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Checkerman
Master |
05-Aug-2021 08:56
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SPH ipo price is 90 CENT... 8 years on and still same better dump if cross $1 which is unlikely
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PhillipTan
Supreme |
04-Aug-2021 23:06
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Is a merger between Keppel REIT and SPH REIT on the cards? DBS seems to think soThe acquisition of Singapore Press Holdings (SPH) by Keppel Corporation looks to be a " winning hand" according to the analysts, Ho Pei Hwa, Geraldine Wong, Rachel Tan and Derek Tan at DBS Group Research.In an Aug 3 report, the analysts deem the deal to be a value-accretive one for SPH and " bolt-on acquisition" for Keppel. " SPH seems to be a rare synergistic good fit to Keppel. Management emphasised that SPH' s quality portfolio is strongly aligned with Keppel' s. For instance, PBSA, senior living, stakes in SPH REIT, and its REIT manager strengthen Keppel' s focus areas in Urban Development, Connectivity, and Asset Management," writes the team. " The acquisition will also allow Keppel to consolidate its existing ownership of the M1 and Genting Lane data centre asset that are currently jointly owned with SPH," it adds. At the same time, the acquisition should be a comfortable one for Keppel, as " we do not see the group stretching its financials (gearing should be marginally higher than 0.85 times post the deal)," says the team. In the meantime, " expected earnings per share (EPS) growth of 6% and an 18% boost to Keppel' s recurring income will be seen as a positive." In addition, Keppel should be able to get its investment back through further strategic actions through the monetisation of SPH' s non-media assets such as its purpose-built student accommodation (PBSA) and senior living portfolio. Based on the team' s estimated revised net asset value (RNAV) of SPH at $2.40 per share, the analysts have estimated a 25 cent accretion to its RNAV for Keppel. To this end, they have kept " buy" on the latter with a target price of $6.20. The offer to SPH shareholders at $2.09 per share is also deemed attractive by the team. " At 1.0 times price-to-net asset value (P/NAV) and [around] 13% below our RNAV of $2.39/share, we recommend that investors accept the offer." " With an estimated two-thirds of the offer price in the form of consideration units for SPH REIT and Keppel REIT, we do not see this as a total exit for investors," they add. The acquisition is seen as a win-win for investors who may be able to realise partial value in SPH and are still able to " ride the growth" of SPH REIT' s anchor asset, Paragon. Through Keppel REIT, investors can ride the longer-term growth in terms of capital value in its prime assets in the Central Business District (CBD), note the analysts. " With expected boost in liquidity for both S-REITs post transaction, we see compression in their headline yields of 5.0%" , they write. Another merger coming up? With the merger of the parent companies, the team at DBS believes that there may be a potential merger between Keppel REIT and SPH REIT. To be sure, a merger between both REITs will " make sense on many fronts for investors" . When combined, both REITs will form the sixth largest Singapore REIT (S-REIT) at $6.9 billion in terms of market cap. The merger is also likely to drive liquidity into the stock. The move will overtake Frasers Logistics and Commercial Trust' s (FLCT) position that' s currently at sixth place among the S-REITs and will move the largest REIT under Keppel Corp closer to its peer, Mapletree Commercial Trust (MCT). That said, it hopes that both entities are given room to " try and grow on their own" . The team adds that " sometimes in the pursuit of scale, we neglect the uniqueness (in terms of exposure, growth, and cyclicality to the economic cycle) of both S-REITs if left on their own" . It has maintained " buy" on both Keppel REIT and SPH REIT, with an unchanged target price of $1.40 for the former and a raised target price of 92 cents from 80 cents previously for the latter. The team' s target prices for both REITs is pegged to Keppel Corp' s implied offer price for SPH. As at 1.08pm, shares in SPH are trading flat at $1.92 while shares in Keppel Corp are trading 9 cents higher or 1.7% up at $5.54. Units in SPH REIT are trading 0.5 cent higher or 0.6% up at 89.5 cents while units in Keppel REIT are trading flat at $1.13. |
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haroujf
Senior |
02-Aug-2021 11:59
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How does this affects sph reits holder? | ||
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PhillipTan
Supreme |
02-Aug-2021 09:35
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Keppel Corp makes S$3.4 billion offer for SPH' s non-media businessKeppel Corporation on Monday made a privatisation offer for Singapore Press Holdings' (SPH) non-media business through a scheme of arrangement. The deal values SPH at S$3.4 billion with Keppel' s share of the deal totalling S$2.2 billion.Under the scheme, shareholders will receive a total consideration of S$2.099 per share. This will comprise cash of $0.668 per share, 0.596 Keppel Reit unit valued at S$0.715 per unit, and 0.782 SPH Reit units valued at S$0.716 per unit from a distribution in-specie by SPH. The scheme is subject to approval by SPH and Keppel shareholders, as well as other conditions and regulatory approvals. If the deal is approved, SPH, which publishes The Business Times, will be delisted and will become a wholly owned subsidiary of Keppel. Keppel will hold stakes of about 20 per cent in both SPH Reit and Keppel Reit. The offer price represents a 39.9 per cent premium to the last traded price of S$1.50 per share before a strategic review of SPH' s businesses was announced on March 30. It is also an 11.6 per cent premium to the last traded price of S$1.88 per share on July 30, and a 21.4 per cent premium ot the three-month volume weighted average price of S$1.729 per share. The offer price is also equivalent to SPH' s adjusted net asset value per share excluding the media business. Shareholders will also receive any final dividend that may be declared by the board for FY2021. SPH said in a press statement that it had reviewed various strategic options, including maintaining the status quo, monetisation of certain assets, a partial sale, or privatisation of SPH post-media restructuring. To maximise value and minimise disruption for shareholders, the board had concluded that privatisation of the entire company would be the preferred solution. " It derives a better valuation outcome for all shareholders where a control premium is paid for the entire company," the company said. It will also avoid a situation in which prime SPH assets are cherry-picked, leaving SPH with its existing debt and the risk of being unable to monetise its remaining assets. Receiving SPH Reit units and Keppel Reit units would allow shareholders to participate in the recovery upside of the retail and commercial property sectors at attractive dividend yields, SPH added. The scheme will only take effect upon a successful completion of the proposed media restructuring. SPH had in May announced a plan to transfer its media business to a company limited by guarantee (CLG), amid the ongoing challenge of falling advertising revenue. The transfer of the media assets to the CLG is subject to SPH shareholders' approval at an extraordinary general meeting (EGM) expected to be convened in August or September this year. Should it be approved at the EGM, the competion of the restructuring is expected to occur by December. SPH will appoint an independent financial adviser for the independent directors, who will make their final recommendation to shareholders on the Keppel scheme. SPH also intends to seek consent from noteholders through a consent solicitation process in relation to certain terms and conditions of the notes and the trust deed constituting the notes. It will run a formal consent solicitation exercise and details will be provided in due course. This consent of noteholders is, however, not a condition for the scheme. Credit Suisse is the financial advisor while Allen and Gledhill is the legal advisor to SPH for the strategic review and the proposed transaction. Said SPH' s chief executive officer Ng Yat Chung: " The outcome is the result of a strategic review process that has taken place over many months. We took the first step with the media restructuring to ensure a sustainable future for the media business, while removing the losses from SPH. The next step was a thorough process to unlock and maximise value for all shareholders for the remaining company. With the privatisation offer from Keppel, shareholders now have an opportunity to realise the value of their SPH shares at a premium." |
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PhillipTan
Supreme |
02-Aug-2021 09:28
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Trading halts called for Keppel Corp, Keppel Reit, SPH and SPH ReitFour counters - including Keppel Corporation and Singapore Press Holdings - called for trading halts on Monday morning pending announcements.Keppel Corp, Keppel Reit, SPH and SPH Reit had called the trading halts within minutes of each other before the market opened on Monday. All four counters closed higher on Friday. Keppel was up 1.9 per cent or S$0.10 to S$5.49, while Keppel Reit was up 0.8 per cent or S$0.01 to S$1.20. SPH gained 1.1 per cent or S$0.02 to end the week at S$1.88 and SPH Reit rose 0.6 per cent or 0.5 Singapore cents to 91.5 cents. In May, SPH, which publishes The Business Times, proposed a restructuring intended to preserve and grow its media business while allowing shareholders of the company to see better values for their shares over time. The proposed deal involves a transfer of the media business to a company limited by guarantee (CLG). This structure will allow any future profits from the media business to be reinvested into the media operations rather than distributed to shareholders. Former Cabinet minister Khaw Boon Wan has agreed to be the chairman of the CLG. SPH and Keppel have several ties. The two companies previously shared a common chairman: Lee Boon Yang. Mr Lee stepped down as chairman of the conglomerate in April this year, after close to 12 years helming its board. Both companies also own stakes in Singapore telco M1, following a buyout in 2019. In 2020, SPH and Keppel set up a joint venture (JV) to develop and operate data centre facilities at SPH' s Genting Lane property. SPH announced at the time that it will hold 40 per cent of the JV company, named Memphis 1, while units of Keppel will hold the remaining 60 per cent. |
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coco66
Member |
21-Jul-2021 11:29
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Seems like investors are smarter now / less shaken by phase 2 news they know if drop now it' s an opportunity to earn money |
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PhillipTan
Supreme |
16-Jul-2021 10:39
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CGS-CIMB sees ' brighter prospects' for SPH REIT, while Maybank Kim Eng sees the REIT&rsquo s recovery as ' slow'Analysts from CGS-CIMB Research and Maybank Kim Eng are mixed on SPH REIT upon the release of its results for the 3QFY2021 ended June.On July 12, the REIT reported distribution per unit (DPU) of 1.38 cents for the quarter, 11.3% higher q-o-q, due to retained income from the 1HFY2021. On this, CGS-CIMB analysts Eing Kar Mei and Lock Mun Yee have maintained " add" on the REIT with an unchanged target price of $1.06 as they see " brighter prospects" ahead. SPH REIT' s 9MFY2021 revenue, which rose by 22.2% y-o-y to $209.6 million, stood at 74% of the analysts' full-year forecast. The REIT' s 9MFY2021 DPU of 3.82 cents came in at 67% of the analysts' full-year forecast. During its business update, the REIT reported stabilised footfall and tenant sales across its malls, while occupancy remained high at 98.4%. To Eing and Lock, the REIT' s occupancy for Paragon is " likely to stay high" due to its strategic location in Orchard Road despite exiting retailers. " Overall, management sounded more optimistic during the briefing compared to last quarter," note the analysts. The REIT' s manager also expects the relaxed measures, which now allows five people per group to dine-in from July 12, and the potential increase in limit to eight people per group, to help improve footfall in Singapore. " While Paragon' s tenant sales would remain affected by border closure, it has a unique positioning for luxury brands. Metro, a key tenant at Paragon has renewed its lease. Asset enhance initiatives (AEIs) for its Australian assets are on the cards," note Eing and Lock. " On acquisition, the REITs would also consider other asset classes other than retail assets," they add. The analysts say they see rental pressure easing due to the " relatively stable" tenant sales and positive vaccine development. To them, the counter is currently trading at an attractive 6% yield. Maybank Kim Eng analyst Chua Su Tye, on the other hand, is reiterating his " hold" call with the same target price of 80 cents on the REIT, as he sees its recovery as " slow" . " Paragon, at 56% of revenue and 64% of [the REIT' s] assets under management (AUM), remains weak, with negative rental reversions to persist, given slow tenant sales and absent tourism spend," says Chua. That said, SPH REIT' s numbers for the 3QFY2021 and 9MFY2021 stood in line with his expectations. To this end, Chua has also kept his earnings forecasts. However, he indicates that Frasers Centrepoint Trust (FCT) is his preferred pick for its " concentrated suburban mall portfolio" . SPH REIT' s balance sheet remains conservative with low gearing at 30.4%. As the REIT' s manager is not in a hurry to make any acquisitions overseas and that the sponsor' s Seletar Mall is likely to be prioritised, Chua sees that a fully-debt funded deal for the $480 million asset could add 8% to his FY2022 estimates. To Chua, an earlier-than-expected pick-up in leasing demand for retail and office space driving improvement in occupancy, higher-than-expected rental reversions and accretive acquisitions could prove to be re-rating catalysts for the counter. That said, a prolonged slowdown in economic activity, termination of long-term leases and sharper-than-expected rise in interest rates are downsides for the REIT. As at 10.09am, units in SPH REIT are trading 0.5 cent higher or 0.5% up at 95 cents. |
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Lobster
Elite |
15-Jul-2021 11:50
Yells: "Even Adam Khoo believes in the Black Market!" |
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From CIMBMB... Their view , just sharing
SPH REIT :Seeing brighter prospect |
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paul1688
Veteran |
14-Jul-2021 13:18
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From Maybank KE. Their view just sharing. SPH REIT (SPHREIT SP) Slow Recovery 3Q21 DPU in line, maintain HOLD SPHREIT&rsquo s 3Q21 DPU rose 11.3% QoQ on the back of recovering fundamentals, underpinned by its suburban Singapore assets and resilient Australian malls. Paragon, at c.56% of revenue and 64% of its AUM, remains weak, with negative rental reversions to persist, given slow tenant sales and absent tourism spend. The numbers were in line and we maintain our forecasts and DDM-based SGD0.80 TP (COE: 7.8%, LTG: 1.5%). Stay at HOLD. We prefer FCT (FCT SP, BUY, TP SGD2.90) for its concentrated suburban mall portfolio. |
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PhillipTan
Supreme |
12-Jul-2021 22:14
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SPH Reit' s distribution per unit up 11.3 per cent in Q3 as revenue recoversSPH Real Estate Investment Trust' s (Reit) revenue and distribution rose in the third quarter ended May 31, with distribution per unit (DPU) for the quarter reaching pre-Covid levels.Gross revenue for the nine months ended May 31 was up 22.2 per cent year on year at S$209.6 million, according to a business update by the Reit after market close on Monday. This was led by improving performance across all assets and supported by an additional quarter of financial contribution from Australian mall Westfield Marion, relative to the year-ago period, as well as a decrease in rental relief for eligible tenants in Singapore and Australia, said SPH Reit. DPU for the third quarter is 1.38 Singapore cents per unit, to be paid on Aug 25. This is up 11.3 per cent from the previous quarter, and the highest since the Covid-19 pandemic hit, equal to the DPU for Q1 FY2020. The Reit has a portfolio occupancy rate of 98.4 per cent, which it said was " driven by the resilience of the suburban malls" , with full occupancy at The Clementi Mall and The Rail Mall. Its weighted average lease expiry is 5.4 years by net lettable area and three years by gross rental income. In Singapore, year-to-date gross revenue was up 16.3 per cent from the year-ago period at S$156.5 million. " Footfall and tenant sales across the malls stabilised and were improving steadily," said SPH Reit. In Australia, year-to-date gross revenue rose 43.9 per cent to S$53.1 million. " Tenant sales for both assets have recovered steadily to near pre-Covid-19 levels as they are not materially impacted by tourism," said SPH Reit. Units in the Reit closed unchanged at 92.5 Singapore cents on Monday. |
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chengwh1
Elite |
03-Apr-2021 23:25
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There is one more risk,.... https://www.dbs.com.sg/treasures/aics/templatedata/article/generic/data/en/GR/032021/210329_insights_sg_retail.xml?cid=sg:en:cbg:tre:email:own:eng:edm:na:na:na:cio-nai |
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Goldfinger
Supreme |
02-Apr-2021 18:05
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Yes - I was there today - throngs of people and crowds at Rail Mall eateries after people either start or complete their rail corridor walk. Bonanza.
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antifragile
Senior |
02-Apr-2021 16:59
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With the opening of Green corridor, increased footfall expected at Railway Mall...! | ||
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Joelton
Supreme |
30-Mar-2021 09:36
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Australian mall recovery bolsters SPH Reit' s H1
QUICKER recovery in its Australian malls has helped to boost SPH Reit' s first-half performance, as the trust reported a distribution per unit (DPU) of 1.24 cents for its second quarter, culminating in a DPU of 2.44 cents for the first-half period.
This is an improvement from the 1.68 cents paid out a year ago.
For the six months ended Feb 28, 2021, SPH Reit' s gross revenue increased 4.9 per cent on the year to S$140 million, bolstered by Westfield Marion Shopping Centre' s first full half-year contribution, versus just three months of contribution a year ago.
However, gross revenue for the Singapore assets declined 6.7 per cent due to Covid-19 rental relief granted to eligible tenants.
The manager noted signs of recovery in tenant sales at its Singapore assets, namely Paragon, The Clementi Mall and The Rail Mall, following the phased lifting of safe-distancing measures, and driven by growing shoppers' confidence in making physical visits to the malls.
While the Singapore portfolio saw 0.4 per cent rent reversion in its first half, rent reversions at The Clementi mall was -7.8 per cent, which Susan Leng, chief executive of the manager, attributed to negative sentiment as tenants renewed their leases amid the Covid-19 outbreak.
" Obviously, the renewal rates will not be at the current market rate. It' s just not sustainable. So when we do our renewals, we also take into consideration how these tenants have been trading, and also the rent relief that we have been providing them in order to keep the business at least sustainable and viable for this period."
The manger declined to disclose the total amount of rental relief it has given to tenants, but said that the level of assistance to tenants this year has declined with the gradual recovery.
However, tenants at Paragon - especially those in fashion still suffering from a lack of tourists due to border closures - may still require rental relief this year, she said.
Local consumption has not been able to bridge the gap, she added, and the manager has also been constrained in doing more to attract more shoppers, as atrium events are still not allowed and there are density measures in place to guard against overcrowding in malls.
" We try to work with tenants to do more in-store promotions, so it' s more targeted and you also control the footfall in terms of density," she said.
Meanwhile, Covid-19 incidents are low in South Australia and Wollongong (in New South Wales), where SPH Reit assets are located. Such incidents were also well managed, which boosted shoppers confidence. Tenant sales at both assets have been resilient and have been tracking the performances of prior years.
However, the leases for a quarter of its Australian assets by gross rental income will expire this fiscal year. Ms Leng said this is due to the leasing code there, which does not motivate tenants to renew their leases earlier there is no penalty of rents doubling if they hold over their tenancy.
The manager is thus monitoring occupancy cost ratios and payment patterns of tenants at its Australian assets to assess the risk of the tenants not renewing.
Overall, the Reit' s portfolio occupancy was still resilient at 98 per cent as at the end of February 2021.
The Reit manager retained distribution of 0.52 cent per unit last year, which it has been gradually paying out. Some 0.13 cent was included in the second-quarter DPU, and a remaining 0.26 cent will have to be paid out this fiscal year, as the Reit seeks to keep its distribution stable from quarter to quarter.
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Checkerman
Master |
30-Mar-2021 09:36
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Worst REIT counter in SGX
Current Price is lower than the IPO price of 90 cents after more than 8-9 years |
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PhillipTan
Supreme |
30-Mar-2021 09:26
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DBS issues a HOLD call on SPH REIT SPH REIT: HOLD Last Traded Price: S$0.86 Price Target (12-mth): S$0.80 (Upside -7.0%) 2QFY21 Results - SPH REIT reported 2QFY21 DPU of 1.24 Scts, up 3.3% q-o-q - 1HFY21 gross revenue increased 4.9% y-o-y to S$140m supported by contributions from Westfield Marion, which was acquired last year - 1HFY21 portfolio occupancy remained resilient at 98% with a WALE by GRI of 3 years - Suburban malls within the portfolio are recovering, with Australian malls performing better than the malls in Singapore |
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