SPH REIT - OCBC Investment 2016-10-07: 4QFY16 results within our expectations

SPH REIT - OCBC Investment 2016-10-07: 4QFY16 results within our expectations SPH REIT SK6U.SI

SPH REIT - 4QFY16 results within our expectations

  • SPH REIT reported its 4QFY16 results which met our expectations. 
  • Gross revenue rose 2.7% YoY to S$52.2m, while NPI grew at a faster pace of 5.3% to S$40.2m due to lower utility tariff rates and advertising and promotion and maintenance expenses. DPU was up 1.4% YoY to 1.41 S cents. 
  • For FY16, SPH REIT's gross revenue increased 2.2% to S$209.6m and this formed 99.1% of our full-year forecast, while DPU of 5.50 S cents represented growth of 0.5% and matched our projection. 
  • Operationally, Paragon and The Clementi Mall (TCM) registered positive rental reversions of 5.2% and 7.8%, respectively, for FY16, which culminated in an overall portfolio rental uplift of 5.4%. Both malls saw slightly lower visitor traffic in FY16 (Paragon -2.5% and TCM -2.4%). Paragon's tenants' sales inched up 0.3%, but TCM recorded slightly lower tenants' sales of 1.4%. 
  • Looking ahead, we forecast SPH REIT to deliver a steady DPU growth of 1.5% in FY17, given its resilient portfolio. 
  • Maintain BUY and S$1.05 fair value estimate on SPH REIT.




Wong Teck Ching Andy CFA OCBC Investment | http://www.ocbcresearch.com/ 2016-10-07
OCBC Investment SGX Stock Analyst Report BUY Maintain BUY 1.05 Same 1.050



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