SPH REIT’s Latest Earnings: What Investors Should Know
- Original Post from The Motley Fool Sg

SPH REIT (SGX: SK6U) is a retail real estate investment trust (REIT) that has interests in Paragon and The Clementi Mall. The REIT’s sponsor is media giant, Singapore Press Holdings Limited (SGX: T39).
Yesterday, SPH REIT announced its financial results for the year ended 31 August 2017 (FY2017). The reporting period was from 1 September 2016 to 31 August 2017.
Here’s a quick rundown on the financial figures from the earnings release:
1. Gross revenue for FY2017 grew 1.5% year-on-year to S$212.8 million, due to higher rental income.
2. Net property income (NPI) increased 4.5% to S$168.1 million, largely on the back of better cost controls.
3. FY2017’s distribution per unit (DPU) came in at 5.53 cents, edging up from 5.50 cents seen a year back.
4. The net asset value (NAV) per unit was at S$0.95, as at 31 August 2017. This is a slight increase from FY2016’s figure of S$0.94.
Both Paragon and The Clementi Mall continued having 100% occupancy despite the muted retail environment. Rental reversion for the portfolio was at a commendable 1.2% for new and renewed leases in FY2017.
It was a mixed bag, however, if we home in on the individual properties in the portfolio.
Rental reversion at Paragon was down 0.8%. Its visitor traffic was maintained at 18.3 million while tenant sales grew by 2.1% to S$675 million. The occupancy cost was at 19.6%.
Over at The Clementi Mall, it had a positive rental reversion of 3.7%. Visitor traffic fell 0.3% to 29.9 million while tenant sales declined by 5.8% to S$225 million. The occupancy cost came in at 15.8%.
As at 31 August 2017, the trust had a gearing ratio of 25.4%, with an average cost of debt at 2.82%. 85.9% of the S$850m debt facility was on a fixed rate basis, helping to mitigate the risks from interest rate rises in the future. The weighted average term to maturity of the outstanding debt is at 2.1 years.
Looking ahead, Susan Leng, Chief Executive Officer of the REIT’s manager, said:
“[W]e will continue to invest in asset enhancement to remain relevant and improve shopper experience. During the year, Paragon commenced the second phase of its Air Handling Units decanting project involving the creation of additional lettable area at higher-yielding retail space. This project is expected to be completed by mid-2018.
Concurrently, other opportunities to create value have been identified and details of these projects in the pipeline would be released at the appropriate time.
Barring any unforeseen circumstances, SPH REIT’s two high quality and well-positioned retail properties in prime locations are expected to remain steady and resilient.”
The Seletar Mall, which opened in November 2014, could be a potential acquisition target for SPH REIT. Singapore Press Holdings has given the right of first refusal to the REIT to acquire the property, which has a high occupancy rate since starting business.
SPH REIT ended Monday at S$1.005. This gives a historical price-to-book ratio of 1.06 and a trailing yield of 5.5%.
$SPHREIT(SK6U.SI) $SPH(T39.SI)

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10 Quick Things That Investors Should Know About SPH REIT’s Latest Earnings Update
- Original Post from The Motley Fool Sg

Last week, SPH REIT (SGX: SK6U) released its results for the third quarter of its fiscal year ending 31 August 2018 (FY2018). As a quick introduction, the REIT is an owner of three retail malls in Singapore, namely, Paragon, The Clementi Mall, and The Rail Mall. Newspaper publisher Singapore Press Holdings Limited (SGX: T39) is the sponsor, manager, and a large unitholder of SPH REIT.
Here are 10 things about SPH REIT’s results that investors may want to know about:
1.Gross revenue for the reporting quarter declined by 2.9% year-on-year to S$51.8 million, while net property income fell by 3.8% to S$40.6 million.
2. But, the distribution per unit (DPU) remained flat at 1.37 cents compared to a year ago.
3.Based on SPH REIT’s annualised DPU of 5.48 cents (from the year-to-date DPU of 4.11 cents) and its closing unit price of S$1.00 as of 13 July 2018, the REIT has an annualised distribution yield of 5.5%
4.As of 31 May 2018, SPH REIT’s gearing stood at 25.4%, which is low compared to the regulatory gearing ceiling of 45%.
5. The REIT has a 99.6% occupancy rate as of 31 May 2018.
6.The weighted average lease expiry by gross rental income stood at 1.9 years at the end of the reporting quarter. 23.4% of the REIT’s leases (again, by gross rental income) are expiring in FY2018 and FY2019, whilst 71.5% will expire in the following two years.
7.SPH REIT has the right of first refusal (ROFR) on one property, namely, Seletar Mall, which opened in November 2014.
Paragon recorded a rental reversion rate of -6.2% for new and renewed leases in the third quarter of FY2018. This represented 27.3% of Paragon’s net lettable area. On a slight positive note, The Clementi Mall renewed 3.2% of its leases at a positive rental reversion rate of 5.3%.
9. On 28 June, SPH REIT completed the acquisition of The Rail Mall for S$63.2 million. The mall has a remaining land lease of 28 years, and 50,000 square feet of net lettable area. SPH REIT thinks that it has the opportunity to strengthen The Rail Mall’s current food & beverage offerings and intensify community programs.
10. Here’s the outlook provided by the REIT in its earnings update:
“According to the Ministry of Trade and Industry (MTI), the Singapore economy grew by 4.4% on a year-on-year basis in the first quarter of 2018, higher than the 3.6% growth in the previous quarter. While the outlook for the global economy has remained on a steady expansionary path since the start of the year, uncertainties and downside risks have also increased. MTI expects the economic growth forecast in 2018 to come in at “2.5% to 3.5%”, barring the full materialisation of downside risks.
Based on figures released by the Singapore Department of Statistics (DOS), the retail sales index (excluding motor vehicles) grew by 1.2% y-o-y in the first quarter of 2018, continuing the growth momentum in the last three quarters of 2017.
Singapore Tourism Board (STB) reported a 7.1% y-o-y increase in international visitor arrivals in the first three months of 2018. Tourism receipts grew by 4.0% y-o-y to S$26.8 billion in 2017.”
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10 Quick Things That Investors Should Know About SPH REIT’s Latest Earnings Update
- Original Post from The Motley Fool Sg

Last week, SPH REIT (SGX: SK6U) released its results for the third quarter of its fiscal year ending 31 August 2018 (FY2018). As a quick introduction, the REIT is an owner of three retail malls in Singapore, namely, Paragon, The Clementi Mall, and The Rail Mall. Newspaper publisher Singapore Press Holdings Limited (SGX: T39) is the sponsor, manager, and a large unitholder of SPH REIT.
Here are 10 things about SPH REIT’s results that investors may want to know about:
1.Gross revenue for the reporting quarter declined by 2.9% year-on-year to S$51.8 million, while net property income fell by 3.8% to S$40.6 million.
2. But, the distribution per unit (DPU) remained flat at 1.37 cents compared to a year ago.
3.Based on SPH REIT’s annualised DPU of 5.48 cents (from the year-to-date DPU of 4.11 cents) and its closing unit price of S$1.00 as of 13 July 2018, the REIT has an annualised distribution yield of 5.5%
4.As of 31 May 2018, SPH REIT’s gearing stood at 25.4%, which is low compared to the regulatory gearing ceiling of 45%.
5. The REIT has a 99.6% occupancy rate as of 31 May 2018.
6.The weighted average lease expiry by gross rental income stood at 1.9 years at the end of the reporting quarter. 23.4% of the REIT’s leases (again, by gross rental income) are expiring in FY2018 and FY2019, whilst 71.5% will expire in the following two years.
7.SPH REIT has the right of first refusal (ROFR) on one property, namely, Seletar Mall, which opened in November 2014.
Paragon recorded a rental reversion rate of -6.2% for new and renewed leases in the third quarter of FY2018. This represented 27.3% of Paragon’s net lettable area. On a slight positive note, The Clementi Mall renewed 3.2% of its leases at a positive rental reversion rate of 5.3%.
9. On 28 June, SPH REIT completed the acquisition of The Rail Mall for S$63.2 million. The mall has a remaining land lease of 28 years, and 50,000 square feet of net lettable area. SPH REIT thinks that it has the opportunity to strengthen The Rail Mall’s current food & beverage offerings and intensify community programs.
10. Here’s the outlook provided by the REIT in its earnings update:
“According to the Ministry of Trade and Industry (MTI), the Singapore economy grew by 4.4% on a year-on-year basis in the first quarter of 2018, higher than the 3.6% growth in the previous quarter. While the outlook for the global economy has remained on a steady expansionary path since the start of the year, uncertainties and downside risks have also increased. MTI expects the economic growth forecast in 2018 to come in at “2.5% to 3.5%”, barring the full materialisation of downside risks.
Based on figures released by the Singapore Department of Statistics (DOS), the retail sales index (excluding motor vehicles) grew by 1.2% y-o-y in the first quarter of 2018, continuing the growth momentum in the last three quarters of 2017.
Singapore Tourism Board (STB) reported a 7.1% y-o-y increase in international visitor arrivals in the first three months of 2018. Tourism receipts grew by 4.0% y-o-y to S$26.8 billion in 2017.”
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3 Things To Like About Singapore Press Holdings Limited’s 2018 Third-Quarter Earnings
- Original Post from The Motley Fool Sg

Singapore Press Holdings Limited (SGX: T39), or SPH, is Asia’s leading media organisation with three business segments of Media, Property and Others.
On Wednesday (11 July), SPH announced its financial performance for the third quarter ended 31 May 2018. Here are three things to like about the latest results.
Higher operating profit and net profit
For the quarter, operating profit, which is recurring earnings from the three business segments, improved 29.6% year-on-year to S$44.4 million. The increase came about despite revenue falling 3.8% to S$250.1 million.
Revenue from the Media segment fell 8% to S$167.9 million on the back of lower advertisement and circulation revenue. However, SPH said that it is “seeing early signs of a slower decline” for its Media revenue.
Property revenue dropped 2.4% to S$60.1 million due to lower rental income from SPH’s retail assets. Revenue from the other businesses grew 38.5% to S$22.0 million because of “contributions from the aged care and education businesses”. In April 2017, SPH acquired Orange Valley, Singapore’s largest private nursing home operator.
Net profit attributable to shareholders surged 64.3% to S$47.4 million, largely due to higher net income from investments, and increase in the share of results of associates and joint ventures.
Improving digital business
Due to promotions during the third quarter, the media giant’s daily average digital circulation copies rose by 121,000 copies, or 43.5%, year-on-year.
The E-paper, a digital version of the print paper, is also showing healthy readership numbers. It has more than 37,000 unique readers for The Straits Times (ST), which is over 15% of ST’s total circulation.
Going forward, SPH will continue promoting “E-paper readership and add new exciting features, while improving its understanding of print readership with valuable data analytics”.
For the nine-month period, total digital ad revenue rose by 10% year-on-year.
Expansion of property and aged care portfolios
Property is the largest segment by profit for SPH, which accounted for around 60% of the 2018 third-quarter profit. This segment includes a 70% stake in SPH REIT (SGX: SK6U). SPH REIT is a retail real estate investment trust (REIT) that has interests in Paragon and The Clementi Mall. Last month, the REIT acquired The Rail Mall for S$63.2 million.
To grow the Property business further, a new asset management company called Straits Capitol was set up in Britain to look at a healthy pipeline of deals actively. The United Kingdom is an attractive market due to Brexit, which has created certain opportunities.
Ng Yat Chung, chief executive of SPH, said:
“… Our new strategy is to focus on the acquisition of cash-yielding real estate assets overseas. We are also preparing the Aged Care business for overseas expansion.”
The Foolish takeaway
Even though SPH’s core media business is facing digital disruption, it is heartening to see the company improving its digital capabilities to remain relevant in the market. It is also interesting to note that SPH is looking to expand its property and aged care businesses beyond Singapore.
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3 Things To Like About Singapore Press Holdings Limited’s 2018 Third-Quarter Earnings
- Original Post from The Motley Fool Sg

Singapore Press Holdings Limited (SGX: T39), or SPH, is Asia’s leading media organisation with three business segments of Media, Property and Others.
On Wednesday (11 July), SPH announced its financial performance for the third quarter ended 31 May 2018. Here are three things to like about the latest results.
Higher operating profit and net profit
For the quarter, operating profit, which is recurring earnings from the three business segments, improved 29.6% year-on-year to S$44.4 million. The increase came about despite revenue falling 3.8% to S$250.1 million.
Revenue from the Media segment fell 8% to S$167.9 million on the back of lower advertisement and circulation revenue. However, SPH said that it is “seeing early signs of a slower decline” for its Media revenue.
Property revenue dropped 2.4% to S$60.1 million due to lower rental income from SPH’s retail assets. Revenue from the other businesses grew 38.5% to S$22.0 million because of “contributions from the aged care and education businesses”. In April 2017, SPH acquired Orange Valley, Singapore’s largest private nursing home operator.
Net profit attributable to shareholders surged 64.3% to S$47.4 million, largely due to higher net income from investments, and increase in the share of results of associates and joint ventures.
Improving digital business
Due to promotions during the third quarter, the media giant’s daily average digital circulation copies rose by 121,000 copies, or 43.5%, year-on-year.
The E-paper, a digital version of the print paper, is also showing healthy readership numbers. It has more than 37,000 unique readers for The Straits Times (ST), which is over 15% of ST’s total circulation.
Going forward, SPH will continue promoting “E-paper readership and add new exciting features, while improving its understanding of print readership with valuable data analytics”.
For the nine-month period, total digital ad revenue rose by 10% year-on-year.
Expansion of property and aged care portfolios
Property is the largest segment by profit for SPH, which accounted for around 60% of the 2018 third-quarter profit. This segment includes a 70% stake in SPH REIT (SGX: SK6U). SPH REIT is a retail real estate investment trust (REIT) that has interests in Paragon and The Clementi Mall. Last month, the REIT acquired The Rail Mall for S$63.2 million.
To grow the Property business further, a new asset management company called Straits Capitol was set up in Britain to look at a healthy pipeline of deals actively. The United Kingdom is an attractive market due to Brexit, which has created certain opportunities.
Ng Yat Chung, chief executive of SPH, said:
“… Our new strategy is to focus on the acquisition of cash-yielding real estate assets overseas. We are also preparing the Aged Care business for overseas expansion.”
The Foolish takeaway
Even though SPH’s core media business is facing digital disruption, it is heartening to see the company improving its digital capabilities to remain relevant in the market. It is also interesting to note that SPH is looking to expand its property and aged care businesses beyond Singapore.
$SPHREIT(SK6U.SI) $SPH(T39.SI)

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8 Different Types of REITs and Stapled Trusts Listed in Singapore
- Original Post from The Motley Fool Sg

There are around 40 real estate investment trusts (REITs) and stapled trusts in Singapore currently. As highlighted here, the REITs and six stapled trusts had an average distribution yield of 6.7%, as of 6 July 2018. The figure is an average, so some REITs will have an above-average yield while others will be below-average. A REIT’s distribution yield can be affected by a number of factors; one such factor is the sub-segment in which the REIT operates in.
With that in mind, let’s look at the various sub-segments a REIT or stapled trust operate in, as categorised by the Global Industry Classification Standard (GICS).
Retail
This sub-segment holds real estate used for retail activities such as shopping centres, something that most investors would be familiar with. To know if a certain shopping mall is doing well, investors can simply walk into the mall and observe the shopper traffic, the type of tenants, and whether the mall is fully occupied with tenants. The popularity of retail REITs could be why it tends to provide lower distribution yields as compared to other REIT sub-segments.
Retail REITs with assets solely in Singapore include CapitaLand Mall Trust (SGX: C38U), Frasers Centrepoint Trust (SGX: J69U) and SPH REIT (SGX: SK6U).
Retails REITs such as CapitaLand Retail China Trust (SGX: AU8U), Lippo Malls Indonesia Retail Trust (SGX: D5IU) and BHG Retail REIT (SGX: BMGU) hold overseas retail properties.
Starhill Global Real Estate Investment Trust (SGX: P40U) owns a mix of both local and overseas properties.
Mapletree Commercial Trust (SGX: N2IU), which owns both retail and office properties, is classified as a retail REIT under the GICS. The trust owns five properties, including VivoCity,Singapore’s largest retail mall, and Mapletree Business City.
Industrial
The industrial sub-segment covers properties such as factories, warehouses and business parks. Singapore’s largest REIT in terms of market capitalisation comes from this sub-sector, and that is Ascendas Real Estate Investment Trust (SGX: A17U). Industrial REITs usually have high distribution yields due to the short 30-year leases that most Singapore industrial properties have as compared to retail or office real estate.
Others industrial REITs include AIMS AMP Capital Industrial REIT (SGX: O5RU), Cache Logistics Trust (SGX: K2LU), Mapletree Industrial Trust (SGX: ME8U) and Mapletree Logistics Trust (SGX: M44U).
Office
This sub-segment owns properties that are used for office or commercial purposes. The largest office REIT listed here is CapitaLand Commercial Trust (SGX: C61U). In recent times, the distribution yields for some office REITs have been fallingdue to higher REIT unit prices resulting from a pickup in the commercial sector.
Other listed commercial REITs include Frasers Commercial Trust (SGX: ND8U), Keppel REIT (SGX: K71U) and Manulife US Real Estate Investment Trust (SGX: BTOU).
Hotel & Resort
This sub-segment hosts hospitality-related properties such as hotels and serviced residences. The entities in this sub-segment are often structured as a stapled trust. Stapled trusts in the hotel and resort sub-sector include CDL Hospitality Trusts (SGX: J85), Frasers Hospitality Trust (SGX: ACV) and OUE Hospitality Trust (SGX: SK7).
Healthcare
REITs in this sub-segment hold healthcare-related assets such as hospitals and nursing homes. Due to their resilient and stable nature, healthcare REITs are popular among investors. Therefore, such REITs usually offer lower distribution yields and trade at a premium to their book values as compared to other REITs.
REITs in the healthcare sub-segment are First Real Estate Investment Trust (SGX: AW9U) and Parkway Life REIT (SGX: C2PU).
Others: Specialized, Diversified and Residential
There are other REITs and stapled trusts that do not fall into the sub-segments discussed above. Keppel DC REIT (SGX: AJBU), which owns data centres, falls under the specialized sub-sector.
Mapletree North Asia Commercial Trust (SGX: RW0U), formerly known asMapletree Greater China Commercial Trust, is a diversified REIT. REITs such as Viva Industrial Trust (SGX: T8B) and Suntec Real Estate Investment Trust (SGX: T82U) are also classified asdiversified REITs.Meanwhile, Ascott Residence Trust (SGX: A68U) is a residential REIT.
$Ascendas Reit(A17U.SI) $Ascott Reit(A68U.SI) $Frasers HTrust(ACV.SI) $Keppel DC Reit(AJBU.SI) $CapitaR China Tr(AU8U.SI) $First Reit(AW9U.SI) $ParkwayLife Reit(C2PU.SI) $CapitaMall Trust(C38U.SI) $CapitaCom Trust(C61U.SI) $Frasers Cpt Tr(J69U.SI) $CDL HTrust(J85.SI) $Keppel Reit(K71U.SI) $Mapletree Log Tr(M44U.SI) $Mapletree Ind Tr(ME8U.SI) $Mapletree Com Tr(N2IU.SI) $Frasers Com Tr(ND8U.SI) $SPHREIT(SK6U.SI) $Suntec Reit(T82U.SI)

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