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SPH REIT – 3 Things That Investors Should Know From Its Latest Results

Credit: SPH REIT Management Pte Ltd.

SPH REIT (SGX: SK6U) is an owner of two retail malls in Singapore, namely Paragon and Clementi Mall. Singapore Press Holdings Limited (SGX: T39) is both the sponsor and main unitholder of SPH REIT.

SPH REIT had recently announced its Q3 FY16/17 result. Here, we will look at three aspects from its presentation.

Overall result

Source: SPH REIT Q3 FY17 Presentation

Above is a quick summary of the latest quarterly result.

Here, we see that all metrics performed favourably on a year-on-year basis.  Net property income is up by 5.4% due to higher rental income and lower operating expense.

Occupancy rate

Occupancy rate is one of the key indicators of the attractiveness of a REIT’s underlying portfolio.

What’s interesting to note here is that both Paragon and The Clementi Mall achieved 100% occupancy for the period.

What’s more, both properties saw a positive 3.6-3.7% upward rental reversion for new leases.

  Financial position

Source: SPH REIT Q3 FY17 Presentation

Lastly, the above is a quick overview of SPH REIT latest financial position.

What’s useful to note here is that the gearing ratio is relatively low at 25.6%. Given that the REIT has a maximum gearing limit of 45%, this means that SPH REIT has ample of room to raise debt if necessary to expand its property portfolio.

Conclusion

In summary, a solid quarter for the REIT with strong performance across all metrics.

What’s more, given its strong balance sheet, the REIT is in a good position, if necessary, to raise debt to acquire new properties.

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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 Lawrence Nga doesn’t own shares in any companies mentioned.