Paragon dip hits SPH Reit income
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Lower revenue at Paragon mall hit net property income for SPH Reit Management for its second quarter to the end of February.
The return of S$42.2 million (US$32 million) dipped 1.1 per cent from the same period last year. This reflected a rental reversion of -7.1 per cent for new and renewed leases at Paragon in the first half, mainly because of negotiations during the retail sales downturn since 2014. The decline was more moderated in the second quarter, says SPH.
There were only three changes in tenancies at Clementi Mall, representing 1.4 per cent of the mall’s net lettable area.
However, tenant sales have grown in the malls in tandem with the recovery in retail sales since June. Both properties also continued their track record of full occupancy.
“In keeping with our philosophy of treating tenants as business partners, we work closely with them to ride through both cyclical and structural challenges in the retail environment,” says SPH Reit Management CEO Susan Leng.
Questions & Answers
Q.What caused the dip in SPH Reit Management's net property income for the second quarter?
What caused the dip in SPH Reit Management's net property income for the second quarter?
The decline in net property income was primarily due to lower revenue at Paragon mall. This reflected a rental reversion of -7.1 per cent for new and renewed leases there in the first half.
Q.How did SPH Reit's financial performance compare to the previous year for the same period?
How did SPH Reit's financial performance compare to the previous year for the same period?
Net property income for the second quarter, which was S$42.2 million (US$32 million), dipped by 1.1 per cent compared to the same period last year. This dip was more moderated in the second quarter.
Q.Has the downturn in retail sales impacted all of SPH Reit's properties equally?
Has the downturn in retail sales impacted all of SPH Reit's properties equally?
The article suggests the impact was mainly due to negotiations at Paragon mall during the retail sales downturn since 2014. Clementi Mall only saw three tenancy changes, affecting 1.4 per cent of its net lettable area.
Q.How are tenant sales performing across SPH Reit's malls currently?
How are tenant sales performing across SPH Reit's malls currently?
Tenant sales have shown growth in the malls, aligning with the recovery seen in overall retail sales since June. Both Paragon and Clementi Mall have also maintained full occupancy.
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