Following the release of SPH REIT’s 1HFY2021 ended February results, analysts from Maybank Kim Eng and OCBC Investment Research have maintained their ‘hold’ ratings on SPH with unchanged target prices of 80 cents and 88 cents respectively.

The REIT reported a distribution per unit (DPU) of 1.24 cents for the 2QFY2021, bringing the REIT’s 1HFY2021 DPU to 2.44 cents, in line with both brokerages’ expectations.

Maybank Kim Eng analyst Chua Su Tye says that the REIT’s Australian properties boosted its performance, with 1HFY2021 revenue from its Australian portfolio up 68.2% y-o-y driven largely by Westfield Marion in Adelaide, which it acquired in December 2019.

“Figtree Grove’s suburban residential catchment supports its fundamentals while Westfield Marion is a strong destination asset, with visibility from favourable lease structures,” he says.


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OCBC analyst Chu Peng made the same observation. “SPH REIT’s Australia portfolio remained more resilient than that of Singapore as the location of the two assets in Australia are less reliant on tourist spending,” she says.

For SPH REIT’s Singapore portfolio, despite occupancies holding up at 98%, both analysts pointed out that Paragon saw a slow pick-up in tenant sales as tourism spend remains depressed by tight border controls, though this was slightly offset by better performance for Clementi Mall, given its suburban location.

The REIT’s Singapore assets saw 0.4% of rental reversions, helped by the Rail Mall (+5.4%) and Paragon (+0.3%), which Chua says indicates that the retail sector recovery is underway.

Nonetheless, both analysts view that Paragon will remain under pressure for the near term while awaiting for borders to reopen. Chu notes that management expects rental reliefs to continue this year, especially to the tenants at Paragon.


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Both analysts reiterated their respective ‘hold’ calls for SPH REIT, with Chua citing Frasers Centrepoint Trust as his preferred pick for its more resilient suburban mall portfolio.

As at 4.21pm, shares in SPH REIT are trading flat at 87.5 cents.