SINGAPORE (Apr 1): SPH REIT has reported distribution per unit (DPU) of 0.3 cent for 2QFY2020 ended February, some 78.7% lower than DPU of 1.41 cents for the corresponding quarter last year.
This brings SPH REIT’s half-year DPU to 1.68 cents, some 39% lower than 1HFY2019 DPU of 2.75 cents.
Distribution to unitholders tumbled to $8.3 million in 2QFY2020, from $36.4 million a year ago.
The steep cut in distribution comes as the REIT braces itself for challenging circumstances arising from the Covid-19 situation.
Gross revenue for the quarter came in at $73.3 million, 26.1% higher than a year ago. The increase was attributable primarily to the increase in rental income contributions from Paragon, as well as from its Australian properties – Figtree Grove Shopping Centre and Westfield Shopping Centre – which were acquired by the group on Dec 21, 2018 and Dec 6, 2019 respectively.
Property operating expenses increased 36.4% to $16.7 million. The group says the increase was mainly due to the acquisitions of both the Figtree Grove and Westfield Marion shopping centres.
Consequently, net property income for the quarter increased 23.3% to $56.5 million compared to $48.6 million a year ago.
Income available for distribution for the quarter increased 12.2% to $41.5 million.
As at end-Dec, SPH REIT’s cash and cash equivalents stood at $67.7 million.
Earnings per unit came in at 1.36 cents, a lift from 1.27 cents last year.
As at end-Feb, the REIT’s portfolio has an occupancy rate of 98.9%, with Singapore assets registering an occupancy rate of 99.5%.
In its outlook statement, the REIT notes that the Covid-19 outbreak has brought about additional uncertainties in its operating environment, and has negatively impacted the retail sector in Singapore and Australia.
In a bid to assist its tenants, SPH REIT will be passing on the property tax rebates from the Inland Revenue Authority of Singapore (IRAS) in full to tenants in a targeted manner.
In addition to the government rebates, the REIT has granted some $4.6 million in tenant rebates to these affected tenants as part of its Tenants’ Assistance Scheme. The REIT is also extending the scheme for the months of April and May, during which the rebates doled out according to the needs of the tenants.
The REIT is also evaluating the need for a support package to help its tenants in its two Australian assets as the situation is evolving. The REIT adds that the Australian government has yet to announce full details of its assistance for retail businesses and landlords.
“Given the continued challenges our tenants are facing with the tightened social distancing measures and enforced closures, SPH REIT will monitor the effects of Covid-19 closely and work with the tenants to overcome this difficult period,” says SPH REIT chairman Leong Horn Kee.
Units in SPH REIT closed two cents lower, or down 2.6%, at 75 cents on Wednesday prior to the results announcement.