REIT-TIREMENT - REITs Investing & Personal Finance

REITs investment & personal finance


Wednesday, July 13, 2022

SPH REIT Review @ 13 July 2022

Basic Profile & Key Statistics

  • Main Sector(s): Retail & Healthcare
  • Country(s) with Assets: Singapore & Australia
  • No. of Properties (exclude development/associate/fund): 5

Performance Highlight

Gross revenue increased yoy slightly for all properties besides Figtree Grove. DPU on the other hand, rose 5.1% yoy, no detailed breakdown was provided though.

Tenant Sales



All tenant sales have improved yoy with Paragon has the most improvement of 45% yoy increase. Overall, the tenant sales have recovered to FY2019 average figures.

Related Parties Shareholding

  • REIT sponsor's shareholding: Below median for more than 10%
  • REIT manager's shareholding: Above median for more than 20%
  • Directors of REIT manager's shareholding: Below median for more than 20%

Lease Profile

  • Occupancy: ± 5% from median
  • WALE: Below median for more than 20%
  • Highest lease expiry within 5 years: Above median for more than 20%. Falls in FY27 and beyond, without breakdown
  • Weighted average land lease expiry: Above median for more than 20%

Debt Profile

  • Gearing ratio: Below median for more than 10%
  • Gearing ratio including perps:  ± 10% from median
  • Cost of debt: Below median for more than 20%
  • Fixed rate debt %: Below median for more than 10%
  • Unsecured debt %: 0%
  • WADM:  ± 10% from median
  • Highest debt maturity within 5 years: ± 10% from median; Falls in 2025
  • Interest coverage ratio: Above median for more than 20%

Diversification Profile

  • Top geographical contribution: Above median for more than 20%
  • Top property contribution: Above median for more than 20%
  • Top 5 properties contribution: Above median for more than 20%
  • Top tenant contribution: Below median for more than 20%
  • Top 10 tenants contribution: Below median for more than 20%

Key Financial Metrics

  • Property yield: ± 10% from median
  • Management fees over distribution: Below median for more than 20%; $7.75 distribution for every dollar paid
  • Distribution on capita: ± 10% from median
  • Distribution margin: Above median for more than 20%

Trends

  • Uptrend - Interest Coverage Ratio
  • Flat - NAV per Unit
  • Slight Downtrend - DPU, Property Yield
  • Downtrend - Distribution on Capital, Distribution Margin

Relative Valuation

  • P/NAV - Below average for 1y; Average 3y & 5y
  • Dividend Yield - Above +1SD for 1y, 3y & 5y

Author's Opinion

 Favorable Less Favorable
Diversified SectorLow REIT Sponsor's Shareholding
High REIT Manager's ShareholdingLow Directors of REIT Manager's Shareholding
High OccupancyShort WALE
Long Weighted Land Lease ExpiryLow Fixed Rate Debt %
Low Gearing Ratio0% Unsecured Debt
Low Cost of DebtHigh Perpetual Securities %
High Interest Coverage RatioHigh Top Geographical Contribution
Low Top Tenant & Top 10 Tenants ContributionsHigh Top Property & Top 5 Properties Contributions
Competitive Management FeesDistribution on Capital Downtrend
High Distribution MarginDistribution Margin Downtrend
Interest Coverage Ratio Uptrend
The performance has stabilized with a slight yoy improvement in gross revenue as well as improvement in tenant sales. Moving forward, with the relaxation of restrictions and border re-opening, SPH REIT performance is expected to be improved.

You could also refer below for more information:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and Detail of Singapore REIT

REIT Analysis - List of previous REIT analysis posts


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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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