BHG Retail Reit’s distribution per unit (DPU) fell by 28.6 per cent to S$0.25 for its first half year ended June, from S$0.35 the year before.
The drop comes despite a sustained net property income during the period, as the China-focused real estate investment trust recorded lower income from early lease termination amid a weakening renminbi.
Revenue for the period grew 0.9 per cent to S$31.3 million from S$31.1 million in the corresponding period in the year before, based on its financials released on Thursday (Aug 8).
Its net property income for the period rose mutedly to S$17.9 million.
Gross revenue and net property income would have been 4.2 per cent and 3.5 per cent higher, respectively, in yuan terms on the year, the manager said.
It added that the increase in the net property income was due mainly to the portfolio occupancy rate being higher than in the preceding financial period.
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The amount to be distributed to unitholders for H1 was down 27.8 per cent to S$1.3 million, from S$1.8 million the year before.
This was mainly due to the weakening of the renminbi against the Singapore dollar, and lower other income from early lease termination, the manager said.
The distributions will be paid to unitholders on Sep 27, after the books are closed on Aug 19.
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Approximately S$0.1 million of the income available for distribution for H1 will be retained for operating expenses and the working-capital requirements of the Reit, the manager noted.
Chan Iz-Lynn, chief executive officer of the manager, highlighted the resilience of the Reit’s portfolio in a challenging environment, given the growth of revenue and net property income in yuan terms.
As at end-June, the Reit’s portfolio occupancy rate stood at 96.8 per cent, with a weighted average lease expiry of 3.2 years by gross rental income.
Chan said: “Our quality portfolio of retail malls in high-population-density neighbourhoods is well positioned to capitalise on China’s economic recovery.
“The manager will remain focused on executing its strategy of refreshing and optimising its malls’ tenant mix, remaining prudent in its capital management, and pursuing yield-accretive acquisition opportunities.”
The Reit’s gearing ratio stood at 39.8 per cent as at Jun 30. About half its offshore debt has been hedged via interest rate swap instruments, to mitigate the effects of volatility in the interest rates, the manager said.
Units of BHG Retail Reit closed Thursday unchanged at S$0.50, before the results.
