PARAGON REIT 2H2023 Financial Results

PARAGON REIT 2H2023 Financial Results

Paragon REIT

On 5th February 2024, PARAGON REIT released their 2H2023 financial results. Distribution Per Unit (DPU) in 2H2023 fell 1.9% to 2.60 cents. The 2H2023 distribution of 2.60 cents is expected be paid on 22nd March 2024.

With the announcement of the final Distribution Per Unit (DPU), PARAGON REIT’s full year Distribution Per Unit (DPU) for FY2023 is 5.02 cents. The manager of PARAGON REIT laments the dip in Distribution Per Unit (DPU) due to the impact by higher interest costs.

PARAGON REIT has a portfolio of five assets in Singapore and Australia. In Singapore, the properties are Paragon, The Clementi Mall and The Rail Mall.

In Australia, PARAGON REIT owns a 50% freehold interest in Westfield Marion Shopping
Centre and 85% interest in Figtree Grove Shopping Centre.

Let us take a look at its latest 2H2023 financial results below.

PARAGON REIT 2H2023 Financial Results

In 2H2023, PARAGON REIT’s Gross Revenue increased by 3.0% to S$145.8 million. Net Property Income (NPI) increased 3.3% to S$109 million.

Despite the increase, Distribution Per Unit (DPU) for 2H2023 fell 0.9% to 2.60 cents as compared to 2.65 cents in 2H2022. This is due to higher interest costs.

2H2023
(S$’000)
2H2022
(S$’000)
Change
Gross Revenue 145,842 141,553 3.0%
Net Property Income 109,012 105,543 3.3%
Amount Available for
Distribution
64,981 76,972 (15.6%)
Distributable Income
73,682 74,367 (0.9%)
Distribution Per Unit (“DPU”) (cents) 2.60 2.65 (1.9%)

PARAGON REIT Full Year FY2023 Financial Results

In FY2023, PARAGON REIT’s Gross Revenue and Net Property Income (NPI) increased 1.8% and 1.7% year-on-year to S$288.9 million and S$215.1 million respectively.

Despite the increase, amount available for distribution fell 14.7% on the back of higher interest costs.

For the similar reasons, Distribution Per Unit (DPU) in FY2023 decreased 9.1% to 5.02 cents.

FY2023
(S$’000)
FY2022
(S$’000)
Change
Gross Revenue 288,926 283,821 1.8%
Net Property Income 215,069 211,495 1.7%
Amount Available for Distribution 135,612 158,950 (14.7%)
Distributable Income
142,180 154,955 (8.2%)
Distribution Per Unit (“DPU”) (cents) 5.02 5.52 (9.1%)

PARAGON REIT 2H2023 Debt

PARAGON REIT 2H2023 Debt Maturity Profile

As of 31st December 2023, PARAGON REIT’s gearing stood at a low of 30%. 85% of PARAGON REIT’s debt are hedged at fixed interest rates and the average cost for FY2023 stood at 4.30%.

Debt maturity profile stood at a weighted average term to maturity of 2.1 years.

PARAGON REIT 2H2023 Occupancy

PARAGON REIT 2H2023 Occupancy

As of 31st December 2023, PARAGON REIT’s overall portfolio occupancy stood at 98.1%. Both its flagship malls PARAGON and The Clementi Mall achieved 100% occupancy.

PARAGON REIT achieved a positive rental reversion rate of 6.3% in FY2023, reflecting retailers’ positive leasing sentiments post pandemic to position for progressive growth in international demand.

PARAGON REIT 2H2023 Lease Expiries

The portfolio weighted average lease expiry stood at 5.1 years by net lettable area and 3.0 years by gross rental income, translating to a distributed lease expiry profile with low concentration risk.

PARAGON REIT’s Current Dividend Yield

PARAGON REIT Share Price 08-Feb-2024

Based on PARAGON REIT’s closing share price of S$0.86 and FY2023 full year distribution of 5.02 cents, this translate to a current dividend yield of 5.84%.

Summary of PARAGON REIT 2H2023 Financial Results

Let us summarize the pros and cons based on PARAGON REIT‘s 2H2023 or FY2023 Financial Results. The pros are:

  • In 2H2023, PARAGON REIT’s Gross Revenue increased by 3.0% to S$145.8 million. Net Property Income (NPI) increased 3.3% to S$109 million.
  • In FY2023, PARAGON REIT’s Gross Revenue and Net Property Income (NPI) increased 1.8% and 1.7% year-on-year to S$288.9 million and S$215.1 million respectively.
  • PARAGON REIT’s gearing stood at a low of 30%. The management is still being very conservative in terms of capital management.
  • PARAGON REIT’s overall portfolio occupancy stood at 98.1%.
  • PARAGON REIT achieved a positive rental reversion rate of 6.3% in FY2023.

The cons are:

  • On the back of higher interest costs, Distribution Per Unit (DPU) for 2H2023 fell 0.9% to 2.60 cents as compared to 2.65 cents in 2H2022.
  • Full year FY2023 Distribution Per Unit (DPU) in FY2023 decreased 9.1% to 5.02 cents.

Leave a ReplyCancel reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.