SPH REIT (SGX: SK6U) Maintains Healthy Balance Sheet With Slow Recovery

SPH REIT (SGX: SK6U) slashed third-quarter DPU to 0.5¢, taking its 9M FY2020 payout to 2.18¢. It is currently trading at 6% yield based on the last traded share price of $0.86.

Key Highlights:

  • Distribution per unit (DPU) and Dividend Yield (6%)

  • Price to book ratio (0.77)

  • Gearing (30%)

  • Interest coverage ratio (4.4x)

  • Portfolio occupancy rate (98.8%)

  • Growth catalyst

Background of SPH REIT

SPH REIT mainly invests in retail assets in the Asia-Pacific region. Currently, it has a portfolio of five assets in Singapore (Paragon, The Clementi Mall and The Rail Mall) and Australia (85% stake in Figtree Grove Shopping Centre and 50% stake in Westfield Marion Shopping Centre).

SPH REIT’s sponsor and also main shareholder is the Singapore based media giant, Singapore Press Holdings Limited (SGX: T39).

1. Distribution per unit and dividend yield

In its latest quarterly result, SPH REIT slashed its DPU to 0.5 cents as compared to 1.39 cents in Q3 last year. The weak performance was due to the Covid-19 pandemic, which affects the retail sales in the past three months. The REIT also extended rental waivers to its eligible tenants.

Historically, the REIT has been paying very consistent but stagnant DPU over the years. It is currently trading at about 6% yield, which is higher than its historical average of 5.5%.