SPH REIT - CGS-CIMB Research 2022-10-10: Tenant Sales Normalizing

SPH REIT - Tenant Sales Normalizing

  • SPH REIT announced a change of financial year-end from 31 Aug to 31 Dec to align with its sponsor, Cuscaden Peak. FY22 will be a 16-month period from 1 Sep 21 to 31 Dec 22.
  • SPH REIT (SGX:SK6U)'s 12-month FY22 DPU of S$0.0553 (+2.2% y-o-y) was in line, forming 79% of our 16-month FY22F.
  • 12-month FY22 revenue grew 1.7% y-o-y on the back of lower rental reliefs given and step-up in rents while NPI margin grew 3.5% on lower property expenses. Portfolio occupancy fell 1.3ppts from 98.8% to 97.5% as occupancy gains in the Singapore portfolio were offset by occupancy loss in the Australian portfolio. SPH REIT’s balance sheet is robust with low cost of debt of 1.77%, gearing at 30%.
  • Tenant sales improved across all assets, increasing 25.6%, 8.8%, 4.8% and 1.8% y-o-y at Paragon, Clementi Mall, Westfield Marion and Figtree, respectively. Despite Sep 21-Aug 22 international visitor arrivals coming in 83% below pre-COVID levels, 12-month FY22 tenant sales at Paragon recovered to 89% of pre-COVID levels.
  • While portfolio reversions were negative at 2.8% for 12-month FY22 (2.6%/3.9% for its SG/Australia portfolio), this was an improvement compared to FY21 reversions of -8.4%. Going forward, we think the portfolio could start showing positive reversions.
  • Aug 22 valuation for SPH REIT's Singapore and Australia portfolio improved S$42.5m (1.3% y-o-y) and A$6.5m (0.8% y-o-y), driven by higher rental income while cap rates remain stable.
  • SPH REIT could potentially improve asset efficiency under the direction of its new property-led sponsor, Cuscaden Peak.
  • SPH REIT's Share Price is trading at an annualised 5.9% FY22F DPU yield, at +0.6 standard deviation of historical average. Stay HOLD on SPH REIT with higher S$0.96 DDM-based target price.

Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @ https://www.itradecimb.com.sg/.

LOCK Mun Yee CGS-CIMB Research | Natalie ONG CGS-CIMB Research | https://www.cgs-cimb.com 2022-10-10

Previous report by CGS-CIMB:
2022-07-07 SPH REIT - Awaiting More Catalysts.

Price targets by other brokers at SPH REIT Target Prices.
Listing of research reports at SPH REIT Analyst Reports.

Relevant links:
SPH REIT Share Price History,
SPH REIT Announcements,
SPH REIT Dividends & Corporate Actions,
SPH REIT News Articles

SGX Stock / REIT Search


Trust Bank God Of Fortune Referral Code PGKPSWAE Trust Bank Referral Code 🧧