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6 Quick Things Investors Should Learn About SPH REIT

Credit: SPH REIT Management Pte Ltd.

SPH REIT  (SGX: SK6U) reported its fiscal first-quarter earnings recently.

The report marked the start of the third fiscal year for the real estate investment trust since its listing. It may be helpful to take stock and see how far the REIT has come and where it may be headed next.

With these in mind, here’re six quick things to learn about SPH REIT:

  1. The REIT had its Initial Public Offering (IPO) on 24 July 2013. At the IPO, SPH REIT owned two retail malls, namely Paragon and Clementi Mall. Its main sponsor, manager, and major owner is the newspaper publisher and property developer Singapore Press Holdings Limited  (SGX: T39). SPH REIT still owns the same two properties and has not expanded its portfolio so far.
  2. The fair value of Paragon and the Clementi Mall was $2.6 billion as of 31 August 2015. This works out to a net asset value per unit of $0.95 as of 30 November 2015.
  3. SPH REIT reported a distribution per unit (DPU) of 5.43 cents for the financial year ended 31 August 2014 (FY2014). In the following fiscal year, its DPU increased a touch to 5.47 cents per unit. For the first quarter of FY2016, SPH REIT’s DPU was unchanged from the same quarter a year ago at 1.33 cents.
  4. As of 30 November 2015, SPH REIT had a debt profile that is summarized below:
    2016-01-18 SPH REIT Debt Table
  5. SPH REIT’s gearing ratio is fairly low at just 25.7% at the moment. This provides the REIT with the flexibility to take on more borrowings if it intends to expand its property portfolio. SPH REIT has the right of first refusal for Singapore Press Holdings’ The Seletar Mall which was opened on 28 November 2014. The mall has achieved a committed occupancy of 100% since December 2014.
  6. SPH REIT has $250m in debt due in FY2016. Currently, 84.7% of its debt are on fixed interest rates. This may help limit the impact of a hike in interest rates in the short term, if any.

If you’d like to learn more about SPH REIT, you can click here and here.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.