Hit by a surge in interest costs, Paragon REIT's distribution per unit for 1HFY2023 ended June was down 15.7% y-o-y to 2.42 cents.
Gross revenue, in the same period, held steady at $143.1 million, up 0.6% y-o-y, while net property income was $106.1 million, up 0.1%.
According to Paragon REIT, which was formerly known as SPH REIT, interest cost for the period was up by $14.7 million to $25.5 million.
The REIT says its fixed debt percentage remained at 85%, with an average cost of debt of 4.05% for 1HFY2023.
"With the refinancing of approximately S$95 million of debt completed in July 2023, there is no further refinancing required in FY2023," says the REIT's manager, adding that total borrowings remained at S$1.3 billion with a gearing of 29.8%.
Thanks to the reopening of borders, Paragon REIT, whose key asset is the Paragon mall along Orchard Road, has maintained a near full occupancy across its portfolio of 97.8% as at June 30.
See also: Kimly reports higher FY2024 revenue but earnings down on higher depreciation and other costs
In 1HFY2023, it managed to achieve rental reversion of 6.9%, versus a contraction of 4.1% in FY2022.
Tenant sales have surpassed pre-pandemic levels.
The REIT's portfolio weighted average lease expiry stood at 5.3 years by net lettable area and 3 years by gross rental income.
See also: LHN reports higher FY2024 earnings on fair value gains and better operations (update)
The REIT warns that while it remains a beneficiary of resilient domestic demand and the resumption of international travel, the retail recovery may be uneven given the uncertain macroeconomic outlook.
Paragon REIT closed Aug 7 at 95 cents, unchanged for the day and up 4.4% year to date.
