SPH Reit

SPH Reit: Against forecasts, 3QFY14 DPU exceeded by 3.1% at 1.35¢, while distributable income was higher at 3.6% at $34m. Gross revenue in line with forecast at $50.4m while net property income was higher by 2.7% at $37.7m due to proactive management of expenses. WALE stood at 2.3 years. Aggregate leverage came in at 26.9%, while the average cost of debt stood at 2.33% with no need for refinancing until 2016. Occupancy was full for both Paragon and Clementi Mall. SPH Reit saw positive rental reversions 8.4%. Management has identified 3 AEIs for Paragon and these are expected to increase the NLA by 10,000 sf, and improve operational efficiency, with the new spaces phasing in from FY2016. In its acquisition pipeline is The Seletar Mall, which is slated for completion in Dec’14. SPH Reit is trading at 1.14x P/B, and annualized 3QFY14 yield is 5.24%.