On 11th February 2025, PARAGON REIT released its FY2024 financial results. PARAGON REIT has a portfolio of only four assets in Singapore and Australia. In Singapore, the assets are Paragon and The Clementi Mall. The Rail Mall was divested last year.
In Australia, PARAGON REIT owns a 50% freehold interest in Westfield Marion Shopping Centre, the largest regional shopping centre in Adelaide, South Australia. PARAGON REIT also owns an 85% interest in Figtree Grove Shopping Centre, a freehold sub regional shopping centre in Wollongong, New South Wales, Australia. On 22 November 2024, PARAGON REIT announced that it had entered into a put and call option deed to divest the property. The divestment was completed on 31 January 2025.
Recently, Paragon REIT has announced its plan to take the REIT private. I have made a video about privatization of REIT, and I hope that is helpful to you if you wish to understand privatization.
For now, let us ignore the privatization news and take a look below at PARAGON REIT FY2024 financial results to see how Paragon REIT had performed in FY2024.
PARAGON REIT FY2024 Financial Results
In FY24, Paragon REIT’s Gross Revenue and Net Property Income (NPI) grew 4.2% to S$300.9 million and 4.5% to S$224.7 million respectively.
A special distribution of 1.85 cents was announced. This brings the total Distribution Per Unit (DPU) to 6.50 cents which represent a 29.5% increase year-on-year.
| FY2024 (S$’000) |
FY2023 (S$’000) |
Change (%) | |
| Gross Revenue | 300,954 | 288,926 | 4.2 |
| Net Property Income | 224,722 | 215,069 | 4.5 |
| Distributable income to unitholders | 180,991 | 135,612 | 33.5 |
| Distribution to unitholders | 184,536 | 142,312 | 29.7 |
| Distribution Per Unit (“DPU”) (cents) (Include Special Distribution) | 6.50 | 5.02 | 29.5 |
| Exclude Special Distribution | 4.65 | 5.02 | (7.4) |
Debt
As of 31st December 2024, Paragon REIT’s gearing stood at 35.3%. Gearing, also known as leverage, is the ratio of a real estate investment trust (REIT)’s debt to its total property value. Fixed debt percentage was lower at 70% to mitigate against the impact of rising interest rates.
Debt maturity profile stood at a weighted average term to maturity of 1.8 years. Average cost of debt was 4.4% for the full year FY2024.
Occupancy
As of 31st December 2024, PARAGON REIT’s overall portfolio occupancy stood healthy at 97.5%. PARAGON REIT has divested The Rail Mall in 2H2024. The net proceeds from the divestment were used to reduce outstanding debt obligations, finance potential acquisitions and/or asset enhancement initiatives, and/or make distributions to unitholders.
The occupancy of PARAGON REIT’s Australia assets stood at 96.4%. On 22 November 2024, PARAGON REIT announced that it had entered into a put and call option deed to divest Figtree Grove which was completed on 31 January 2025.
PARAGON REIT Share Price and Current Dividend Yield
At this point of writing, Paragon REIT share price closed at S$0.99 on Friday, 14th February 2025. Based on the total dividend of 6.50 cents paid in FY2024, this represents a current dividend yield of 6.57%.
If we exclude the special dividend of 1.85 cents, the total dividend paid in FY2024 is 4.65 cents. Based on the total dividend of 4.65 cents, Paragon REIT’s current dividend yield would be 4.70%.
Summary of PARAGON REIT FY2024 Financial Results
Let us summarize the pros and cons based on PARAGON REIT 1H2024 Financial Results. The pros are:
- Paragon REIT’s Gross Revenue and Net Property Income (NPI) grew 4.2% to S$300.9 million and 4.5% to S$224.7 million respectively.
- A special distribution of 1.85 cents was announced.
- Gearing still healthy at 35.3%.
The cons are:
- Excluding the special dividend of 1.85 cents, the total dividend paid in FY2024 is 4.65 cents. The current dividend yield is low at 4.70%.
- After divestment of Figtree Grove, Paragon REIT would only be left with three properties.
As an existing investor of Paragon REIT, I am unhappy that there are only three properties in its portfolio. The returns in the form of Distribution Per Unit would be poor. Unless the manager acquires new assets to add to its portfolio, I would be happy to accept the privatization offer and take Paragon REIT private.