PARAGON Real estate investment trust (Reit) posted a 4.1 per cent fall in distribution per unit (DPU) to S$0.0232 for the first half of its 2024 financial year ended Jun 30, from S$0.0242 in the same period the year before.
The lower DPU represented an annualised yield of 5.43 per cent, based on the Reit’s closing price of S$0.855 as at Jun 28.
In a bourse filing on Monday (Aug 5), the manager said the fall in DPU was a result of management fees being paid fully in cash to reduce dilution of unitholders’ returns. On a like-for-like basis, the H1 DPU is higher year on year, and the latest distribution will be paid out on Sep 23.
Gross revenue inched up 3 per cent to S$147.4 million, from S$143.1 million over the same period in the previous year. Net property income was also up by 4.5 per cent to S$110.8 million in H1 FY2024, from S$106.1 million in H1 FY2023.
The income available for distribution had shrunk by 14.5 per cent to S$60.4 million, from S$70.6 million in the corresponding period last year.
The manager said it maintained 98 per cent occupancy across its portfolio as at end-June; occupancy in its Singapore assets hit 100 per cent, while that in its Australia assets stood at 97 per cent.
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Rental reversion rate improved to 19.1 per cent for H1 FY2024 from 6.9 per cent in the same period of the previous year. The Reit has a weighted average lease expiry of 4.9 years by net lettable area.
The Reit has three malls in its Singapore portfolio – Paragon, The Clementi Mall and The Rail Mall. In H1 FY2024, tenant sales in the Singapore portfolio dipped 2.3 per cent year on year.
In June, the manager announced the divestment of The Rail Mall for a cash consideration of S$78.5 million. The divestment is scheduled for completion in the second half of FY2024.
Tenant sales in its Australian assets remained stable, posting a 1.1 per cent increase year on year.
The manager added that “easing labour market conditions and waning tailwinds from the post-pandemic boom in retail spending are expected to contribute to a moderation in retail sales growth”.
However, it expects tenants’ leasing sentiments in FY2024 to be supported by the growth in international travel and the recovery of international visitor arrivals.
Units of Paragon Reit closed at S$0.855, down 1.7 per cent or S$0.015 on Monday, before the announcement.
