BHG Retail Reit H1 DPU falls 12% on lower revenue, forex impact

BHG Retail Reit’s distribution per unit (DPU) fell by 12 per cent to S$0.0022 for its first half year ended June, from S$0.0025 the year before.

Gross revenue for the period was down 10 per cent to S$28.1 million, from S$31.3 million in the year ago period, according to the China-focused real estate investment trust’s unaudited financials released on Thursday (Aug 7).

BHG attributed this decline mainly to the weakening of the renminbi against the Singapore dollar, as well as lower occupancy rates and rental support provided to properties in the Chinese cities of Dalian and Xining.

Therefore, net property income for the first six months fell 16.1 per cent to S$15 million, from S$17.9 million the year before.

The amount to be distributed to unitholders for H1 was down 11.3 per cent to S$1.1 million, from S$1.3 million the year before.

The distribution will be paid out on Sep 26, after the books are closed on Aug 20.

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Approximately S$0.1 million of the income available for distribution for H1 will be retained for operating expenses and working-capital requirements of the Reit, the manager noted.

Chan Iz-Lynn, chief executive officer of the manager, said that the Reit’s proactive and disciplined approach to portfolio management has helped it maintain operational stability despite macroeconomic challenges.

As at end-June, the portfolio maintained an occupancy rate of 95.1 per cent, with a weighted average lease expiry of 2.7 years by gross rental income and 4.4 years by net lettable area.

Chan added that China’s post-pandemic recovery – supported by policy tailwinds and resilient domestic demand – offers strong long-term growth prospects.

“Our portfolio of strategically located community malls is well-positioned to benefit from this uptrend,” she explained, noting that the manager will continue to focus on curating relevant tenant mixes, enhancing the shopper experience, and exploring yield-accretive acquisitions to strengthen its appeal as a long-term income investment.

As at Jun 30, the Reit’s gearing ratio was 41.7 per cent, with total borrowings amounting to S$296.8 million. Around 80 per cent of the debt was denominated in Singapore dollars, with the remainder in renminbi.

Units of BHG Retail Reit closed Thursday at S$0.425, down 1.2 per cent or S$0.005, before the results were released.