Basic Profile & Key Statistics
Performance Highlight
Related Parties Shareholding
- REIT sponsor's shareholding is high at 65.41%
- REIT manager's shareholding is high at 3.3%
- Directors of REIT manager's shareholding is low at 0.03%
Lease Profile
- Occupancy is high at 98.4%
- WALE is short at 3 years
- Highest lease expiry within 5 years is moderate at 25% which falls in FY23
- Weighted average land lease expiry is long at 90.95 years
Debt Profile
- Gearing ratio is low at 30.4%
- Cost of debt is low at 1.86%
- Fixed rate debt % is low at 58%
- All debts are secured debts
- WADM is moderate at 2.9 years
- Highest debt maturity within 5 years is moderate at 30.6% which falls in 2025
- Interest coverage ratio is high at 5.4 times
- Preferred/perpetual securities over debt is high at 18.6%
Diversification Profile
- Top geographical contribution is high at 73.6%
- Top property contribution is high at 56.8%
- Top 5 properties contribution is high at 100%
- Top tenant contribution is low at 3.2%
- Top 10 tenants contribution is low at 19.6%
Key Financial Metrics
- Property yield is low at 4.4%
- Management fees over distribution is high at 16.7% in which unitholders receive S$ 5.99 for every dollar paid
- Distribution on capital is low at 2.9%
- Distribution margin is moderate at 44.9%
- Including retention, management fees over distribution, distribution on capital and distribution margin would be 14.4% (moderate), 3.4% (moderate) and 52% (high) respectively.
Trends
- Flat - NAV per Unit
- Slight Downtrend - Property Yield
- Downtrend - DPU, Interest Coverage Ratio, Distribution on Capital, Distribution Margin
Relative Valuation
- P/NAV is higher than +2SD for 1y and average for 3y and 5y
- Dividend yield is higher than +1SD and average for 3y and 5y
Author's Opinion
| Favorable | Less Favorable |
|---|---|
| Diversified Sector | Low Directors of REIT Manager's Shareholding |
| High Sponsor's Shareholding | Short WALE |
| High Manager's Shareholding | Low Fixed Rate Debt |
| High Occupancy | 0% Unsecured Debt |
| Long Weighted Average Land Lease Expiry | High Perpetual Securities % |
| Low Gearing Ratio | High Top Geographical Contribution |
| Low Cost of Debt | High Top Property & Top 5 Properties Contributions |
| High Interest Coverage Ratio | Low Property Yield |
| Low Top Tenant & Top 10 Tenants Contributions | DPU Downtrend |
| High Distribution Margin (Include Retention) | Interest Coverage Ratio Downtrend |
| Distribution on Capital Downtrend | |
| Distribution Margin Downtrend |
SPH REIT distributes 1.38 cents DPU this quarter (including 0.13 cents from retention), similar to pre-COVID DPU. The performance and tenant sales have seen stabilized. Albeit the phase 2 heightened alert and phase 3 heightened alert (before dining is allowed) may slightly impact the next-quarter performance.
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*Disclaimer: Materials in this blog are based on my research and opinion which I don't guarantee accuracy, completeness, and reliability. It should not be taken as financial advice or a statement of fact. I shall not be held liable for errors, omissions and loss or damage as a result of the use of the material in this blog. Under no circumstances does the information presented on this blog represent a buy, sell, or hold recommendation on any security, please always do your own due diligence before any decision is made.
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