SPH REIT’s revenue inched up 1.8% to $50.6m in 1Q15

Distribution per unit grew 2.3%.

SPH REIT reported a 1.8% year-on-year increase in gross revenue to $50.6m for the first quarter of FY15, on back of positive rental reversions and full occupancy for its malls.

This revenue translated to a distribution per unit of 1.33 cents, a 2.3% year-on-year increase. SPH REIT reported that both Paragon and The Clementi Mall are fully leased. Paragon reported a rental uplift of 12.5% for new or renewed leases in the quarter, while The Clementi Mall reported a rental reversion of 2.3%.

According to OCBC, asset enhancement initiatives at Paragon will create additional space and provide incremental rental income to SPH REIT upon completion.

“Looking ahead, headwinds facing the retail sector will continue to pose challenges to the operating landscape. Nevertheless, average prime retail rents in Orchard Road still managed to increase marginally by
1% on a YoY and QoQ basis to S$34.55 psf pm in 4QCY14, according to CBRE. This highlights the attractiveness and value of assets which are strategically located in good catchment areas. We believe its current valuations look fully priced,” stated OCBC.

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