SINGAPORE (Aug 8): The manager of BHG Retail REIT reported 2Q19 DPU of 0.98 cents, 27.4% lower compared to the 2Q18 DPU of 1.35 cents.

This was despite 2Q19 amount available for distribution being 2.9% higher at $5.3 million from a year ago.

BHG Retail Trust Management says the reduction in DPU was due to the increase of units entitled to distribution as a result of payment of management fees in units, in lieu of cash.

Gross revenue in 2Q19 rose 13.9% to $20.2 million mainly due to strong rental reversion, higher occupancy rates and enlarged portfolio resulted from newly acquired Hefei Changjiangxilu mall.

As at June 30, portfolio occupancy rate remained stable at 97.9%.

Property operating expenses rose 18.2% to $13.4 million. Consequently, net property income rose 11.8% to $13.4 million.

Together with the 1Q19 DPU of 1.1 cents, unitholders will be entitled to the 1H19 DPU of 2.083 cents, down 24% from the 1H18 DPU of 2.74 cents.

The DPU of 2.083 also translates into an annualised distribution yield of 6.0%.

Unitholders can expect to receive the 1H19 distribution on Sept 27.

BHG Retail Trust Management says China’s economy grew 6.3% year-on-year to RMB45.1 trillion ($8.9 trillion) in 1H19, in line with the government's annual target of 6.0% to 6.5%.

Disposable income and consumption expenditure per capita for urban residents increased 8.0% and 6.4%, respectively in 1H19. Retail sales rose 8.4% year-on-year to RMB19.5 trillion in 1H19.

In its outlook statement, the manager says although overall retail environment remains cautiously positive, BHG Retail REIT’s properties situated in densely populated residential communities are expected to remain resilient.

Units in BHG Retail REIT closed at 69 cents on Thursday before the results were announced.