Paragon REIT

SPH Reit 1HFY22 Financial Results

SPH Reit Paragon

On 1st April 2022, SPH Reit announced their 1HFY22 Financial Results. Currently, SPH Reit makes up 10.80% of my stock portfolio. There are a few popular shopping malls such as Paragon, Clementi Mall and The Rail Mall in SPH Reit’s portfolio. How has the Reit performed? Let us find out.

In 1HFY22, SPH Reit report its Gross Revenue and Net Property Income (“NPI”) grew by 1.2% y-o-y to S$141.6 million and 0.4% y-o-y to S$105.3 million respectively mainly due to gradual market recovery. However, the Net Property Income (“NPI”)  growth was partially dampened by the increase in electricity rates.

SPH Reit FY22 Financial Results

As you can see below, the results are decent with increase across all financial indicators. Even though Net Asset Value (“NAV”) has improved by 1.1%, this is still a far cry from its historical high NAV of S$0.95.

As a dividend investor, I am certainly pleased that DPU increased by 9.8% to 2.68 Singapore cents.

1HFY22
(S$’000)
1HFY21
(S$’000)
Change
Gross Revenue141,636139,9581.2%
Net Property Income105,273104,8540.4%
Net Asset Value0.920.911.1%
Income available for distribution82,61476,1818.4%
Distribution to Unitholders75,10567,76410.8%
Distribution Per Unit (“DPU”) (cents)2.682.449.8%

Occupancy

Overall portfolio occupancy remained healthy at 98.4%.

Weight Average Lease Expiry (“WALE”) stood at 5.5 years if measured by Net Lettable Area.

SPH REIT 1HFY22 Occupancy

Debt

SPH Reit has always been known for its low gearing ratio. Some investors praise the manager while other criticise the manager for not being aggressive enough in terms of acquisition.

Current gearing stood at 30.1% which provides debt headroom flexibility with access to additional liquidity from S$225 million of undrawn revolving credit facility lines.

SPH REIT 1HFY22 Debt Maturity

Current Dividend Yield

SPH REIT Share Price 31 Mar 22

Based on the current share price of S$0.97 and FY21 DPU payout of 5.4 cents, this translate to a current dividend yield of 5.57%.

I am predicting FY22 full year DPU to be higher than FY21 given that DPU is already higher based on the current 2 quarters.

SPH Reit 1HFY22 Financial Results

At the point of writing, the Malaysian borders are opened and COVID-19 restrictions have been eased greatly. This is greatly beneficial to Retail REITs such as SPH REIT.

I been to Paragon mall recently and I am surprised by the shopper traffic. I am expecting further more easing of restrictions in the upcoming months and with borders opening, tourism will soon return.

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