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These 2 REITs Recently Reported Growth In Their Latest Earnings

We’ve come to the tail end of the earnings season.

As is common with every earnings season, there will be some real estate investment trusts (REITs) posting growth, some REITs posting mixed numbers, and some REITs experiencing declines. So, which are the REITs that have recently reported growth? Let’s look at two of them:

1. In the middle of July, SPH REIT (SGX: SK6U) released its third quarter results for its financial year ended 31 August 2017 (FY 2017).

As a quick introduction, SPH REIT is an owner of two retail malls in Singapore, namely Paragon and Clementi Mall. Newspaper publisher and property developer, Singapore Press Holdings Limited (SGX: T39), is the manager, sponsor, and main unitholder of SPH REIT.

During the reporting quarter (the three months ended 31 May 2017), the REIT’s quarterly gross revenue increased by 2.1% year-on-year to S$53.3 million while net property income climbed 5.4% to S$42.2 million. With that, SPH REIT’s distribution per unit (DPU) came in 0.7% higher at 1.37 cents compared to 1.36 cents in the same period last year.

SPH REIT’s positive performance is driven mainly by higher rental income and lower operating expenses. It’s also worth noting that both Paragon and The Clementi Mall were fully occupied as of 31 May 2017.

In its earnings release, SPH REIT also shared some data about its market environment. The REIT said that the retail environment remains muted. In the third quarter of 2016, fourth quarter of 2016, and first quarter of 2017, the retail sales index (excluding motor vehicles) declined by 4.4%, 1.6%, and 0.4%, respectively.

2. CapitaLand Mall Trust (SGX: C38U) released its 2017 second quarter earnings in late July.

It is Singapore’s oldest REIT, and focuses on investing in retail properties here. Its current portfolio consists of 16 properties, including Tampines Mall, Junction 8, and Plaza Singapura.

During the reporting quarter, CapitaLand Mall Trust’s net property income inched up by 1.2% to S$117.6 million compared to a year ago despite its gross revenue sliding by 1.3% to S$168.6 million. The REIT’s distribution per unit also improved by 0.4% to 2.75 cents. CapitaLand Mall Trust also managed to end the second quarter of 2017 with a high occupancy rate of 98.6%.

Here is what Tony Tan, the chief executive of CapitaLand Mall Trust’s manager, said about the REIT’s future in the earnings release:

“In end April, Funan blazed a new trail with the launch of its one-of-a-kind experiential showsuite, which is the first retail showsuite in Singapore to be opened to the public. Two months later and with more than two years to go before its target opening in 4Q 2019, Funan’s retail component is already 30% committed as at end June.

Looking ahead, we will continue to focus on active asset management, proactive capital management and operational excellence to sustain our performance through the different economic cycles.”

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended shares of CapitaLand Mall Trust. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned