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10 Quick Things Investors Should Know About BHG Retail REIT’s Latest Earnings

BHG Retail REIT (SGX: BMGU) is a real estate investment trust that focuses on retail malls in China. It currently has a portfolio of five malls. Its sponsor is the China-listed Beijing Hualian Department Store Co. Ltd, which is part of the Beijing Hualian Group, one of China’s largest retail operators.

Two weeks ago, BHG Retail REIT announced its third quarter results for 2017. Let’s look at 10 important things from the earnings announcement that investors should know:

1. Quarterly gross revenue grew 6.6% year-on-year to RMB 80.66 million, while net property income (NPI) improved by 9.9% to RMB 51.62 million.

2. Distribution per unit (DPU) grew 9.3% to 1.41 Singapore cents as compared to the same period last year.

3. Gearing as of 30 September 2017 stood at 32.5%. REITs in Singapore have a regulatory gearing ceiling of 45%, so BHG Retail REIT has plenty of debt headroom given its low gearing.

4. The occupancy rate of BHG Retail REIT’s portfolio stood at 99.0% at the end of the reporting quarter, with four properties achieving 100% occupancy, and one property at 96.1%.

5. The weighted average lease expiry stood at a healthy 4.8 years by gross rental income.

6. Above 65% of the REIT’s gross rental income, and close to 80% of its net lettable area (NLA) come from tenants that are in the experiential segments.

7. BHG Retail REIT’s annualised distribution yield stood at 7.45% (based on a unit price of S$0.745 – the REIT’s current unit price is also S$0.745).

8. BHG Retail REIT has the right of first refusal on 15 properties at the moment. These properties come from both its sponsor, as well as its sponsor’s parent.

9. China’s economy grew by 6.8% year-on-year in the third quarter of 2017.

10. Disposable income and expenditure per capita for urban residents in China increased by 6.6% and 5.9%, respectively, for the first nine months of 2017.

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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.