Paragon parent SPH Reit says both its Singapore mall properties have continued their track record of full occupancy amid mounting competition.
Despite a muted retail environment, gross revenue for the quarter ended August 31 grew 1.3 per cent to S$52.9 million (US$38.9 million). The trust says this is because of higher rental income from Paragon and The Clementi Mall.
Net property income for the period was up 3.9 per cent year on year at $41.8 million, and ahead 4.5 per cent to $168.1 million for the 12 months. Gross revenue for the full year was up 1.5 per cent to $212.8 million.
Tenant sales at Paragon rose 2.1 per cent to $675 million, even as visitor traffic held steady at 18.3 million. The Clementi Mall had visitor traffic of 29.9 million, down 0.3 per cent, while tenant sales fell 5.8 per cent to $225 million.
SPH Reit CEO Susan Leng says that while the economic outlook has improved, the retail scene remains muted.
Some segments, such as luxury watches and jewellery, are beginning to show signs of recovery, while the property market is also picking up, she says.
Despite this, consumer sentiment has yet to pick up decisively even as structural changes like the rise of e-commerce have forced retailers to review their business models. “There are some positive indicators, but the recovery will take time to pan out.”
Leng says SPH will partner its tenants toward mutual success and in riding through both structural and cyclical retail trends.
Meanwhile, the trust will continue to invest in upgrading its malls. Paragon has started the second phase of its air-handling unit decanting project, which involves creating extra lettable area at higher-yielding retail space. This is expected to be completed by the middle of next year.