operations reVieW

SPH REIT’s portfolio grew in valuation to S$3.598 billion on the back of steady growth in the Singapore assets comprising Paragon, The clementi mall and The Rail mall as well as the injection of figtree grove Shopping centre in fy2019 in tandem with SPH REIT’s diversification into australia. as at 31 august 2019, gross revenue increased by 7.9% from the previous year to S$228.6 million. net Property Income (“nPI”) improved by 8.3% year-on-year with new acquisitions, efficient mall management and positive rental reversion of 9.4% for new and renewed leases across all properties in Singapore.

Riding on steady tourist arrivals and loyal shoppers, Paragon’s shopper traffic rose to 19.0 million in fy2019. Paragon medical continued to attract strong clientele by offering comprehensive specialist medical services. The clementi mall remains as a destination for surrounding catchment and maintained its steady footfall at 31.6 million.

The properties maintained its high occupancy at 99.1% as at 31 august 2019 with a total lettable area1 of 1.2 million sq ft.

1 lettable area refers to nla in Singapore and gla in australia.

SPH REITAnnuAl REPoRT 2019 26

paraGon

Paragon has achieved a high occupancy of 99.8% with a positive rental reversion of 9.7% and tenant retention of 68.2% by nla. amongst the other new stores in Paragon are adidas originals, bose, boSS, mouawad, Porcelain origins and Thann. To enhance our shoppers’ gastronomic experience, 11 new f&b outlets including colonial club Signatures, grill by 1855 The bottle Shop, Ha-oh Hototogisu Ramen, le Shrimp Ramen, Privé and Toss & Turn have been added to the selection of f&b outlets in Paragon.

The new level 3 offers a seamless and integrated retail concept with a unique blend of tenancy mix ranging from designer labels, accessories stores, beauty salons, to stylish cafes.

Tenants’ sales achieved in fy2019 was S$708 million with an occupancy cost of 22.7%, an improvement for the year compared to S$693 million in fy2018 with an occupancy cost of 18.3%.

a new digital pillar near the main atrium was unveiled to showcase thematic seasonal videos and curated branding content by luxury, sports, lifestyle and f&b tenants. Similarly, a digital wall was installed on level 3 to enhance branding and publicity for tenants.

The footfall remained steady with a marginal increase to 19.0 million visitors in fy2019.

tHe CleMenti Mall

The clementi mall has maintained its strong occupancy at 100% with a positive rental reversion of 5.0%. with a steady footfall of 31.6 million per annum, total tenants’ sales of S$237 million was achieved in fy2019 with an occupancy cost of 15.8%.

Shoppers and residents, as well as students from surrounding schools continue to patronise the mall regularly. community activities such as the good old days campaign brought back nostalgic memories for the residents and shoppers.

27growing grEATEr VALUE

operations reVieW

tHe rail Mall

The Rail mall is home to a curation of destination f&b, ranging from authentic Italian cuisine, aqua E farina to chill-out bar and grill, blooie’s Roadhouse. at a total nla of 49,767 sq ft, the occupancy was 84.3% in fy2019. The first community event “movie under the Stars” kicked off in december 2018. “ah boys to men 4”, the movie that was screened, was selected in consultation with residents from the fuyong and

Hillview estates within the mall’s immediate catchment, and drew enthusiastic participation from visitors and residents.

fiGtree GroVe sHoppinG Centre

The acquisition of figtree grove was completed on 21 december 2018. as at 31 august 2019, the committed occupancy was 99.2%. out of the occupied gla, anchor tenants account for 59% and specialties account for 31% of the centre’s gla. Total tenants’ sales of a$187 million was achieved in fy2019 with an occupancy cost of 7.3%. Since the acquisition, the focus has been on active renewal of tenancies as well as the engagement of the local community through marketing activities.

SPH REITAnnuAl REPoRT 2019 28

sUMMarY of reneWals/neW leases for fY2019

number of renewals/

new leases(a)

Retention rate(b)

nlA

Rental reversion(d)

of expiries (sq ft)

as a % of property

SInGAPORE

Paragon 105 63.8% 190,417 26.6% 9.7%

The Clementi Mall 20 55.0% 20,805 10.7% 5.0%

The Rail Mall 11 81.8% 18,174 36.5% 9.4%

Singapore Portfolio 136 64.0% 229,396 23.8%(c) 9.4%(e)

number of renewals/

new leases(a)

Retention rate(b)

GlA

Rental reversion(f)

of expiries (sq ft)

as a % of property

AUSTRAlIA

Figtree Grove Shopping Centre 5 80% 2,544 1.1% -2.7%

portfolio lease expirY as at 31 aUGUst

FY2019 FY2020 FY2021 FY2022FY2023

and beyond

SInGAPORE

Portfolio 6 159 136 125 81

Expiries by nlA 0.9% 27.1% 28.5% 20.5% 22.9%

Expiries by Gross Rental 0.0% 22.2% 29.2% 25.0% 23.6%

AUSTRAlIA

Portfolio 0 26 10 13 35

Expiries by GlA 0.0% 11.0% 5.0% 17.0% 67.0%

Expiries by Gross Rental 0.0% 20.0% 8.0% 16.0% 56.0%

portfolio CoMMitteD oCCUpanCYAs at 31 August

2017 2018 2019

SInGAPORE

Paragon 100.0% 99.6% 99.8%

The Clementi Mall 100.0% 100.0% 100.0%

The Rail Mall – 94.8% 84.3%

Singapore Portfolio 100.0% 99.4% 99.1%

AUSTRAlIA

Figtree Grove Shopping Centre – – 99.2%

lease expirY profile

SPH REIT’s lease expiry profile was well staggered with 22.2% of the leases in the Singapore portfolio based on gross Rental Income that remain to be committed in fy2020. The weighted average lease Expiry (walE) by gla was 7.4 years in australia and 2.1 years by nla for the Singapore portfolio.

(a) for expiries in fy19, excluding newly created and reconfigured units.(b) based on number of leases.(c) as a % of SPH REIT’s total Singapore portfolio nla of 962,153 sq ft as at 31 august 2019.(d) The change is measured between average rents of the renewal and new lease terms and the average rents of the preceding lease teams.(e) Reversion rate is computed based on weighted average of all expiring leases.(f) based on the first year fixed rent of the new leases divided by the preceding final year fixed rents of the expiring leases.

29growing grEATEr VALUE

operations reVieW

top 10 tenants BY Gross rental inCoMe

SPH REIT’s top 10 tenants contributed 19.2% of gross Rental Income for the month of august 2019. no single trade sector accounted for more than 19.1% of gross Rental Income in the same period.

The top 10 tenants (by gross Rental Income for the month of august 2019) are listed below, in alphabetical order.

1 The list of top 10 tenants above does not take into account one of the tenants which has not consented to the disclosure of its tenancy arrangements in the annual Report.

2 The names of the tenants cannot be matched to the information set out above for confidentiality reasons.3 Some of the tenants above have signed more than one tenancy agreement and this has resulted in more than one tenancy expiry date for such

tenants.

top 10 tenants name of top 10 tenants

BaccaratInternational(Pte.)Limited • Burberry(Singapore)DistributionCompanyPteLtd Club21PteLtd • ColdStorageSingapore(1983)PteLtd • CortinaWatchPteLtd ErmenegildoZegnaFar-EastPteLtd • Ferragamo(Singapore)PteLtd Metro(Private)Limited • NTUCFairpriceCo-operativeLimited • PradaSingaporePteLtd

Tenant1,2 Trade sector lease expiry (Year)3 % of rental income

Tenant a departmental stores & supermarket 1st Half 2024 3.8%

Tenant b luxury brands, jewellery, watches 2nd Half 2022 3.2%

Tenant c departmental stores & supermarketlifestyle

between 1st Half 2021

and 1st Half 2023

2.3%

Tenant d luxury brands, jewellery, watches 2nd Half 2024 2.1%

Tenant E luxury brands, Jewellery & watchesaccessories & opticalfashion, Handbags, Shoes,

between 2nd Half 2020

and 1st Half 2023

1.7%

Tenant f luxury brands, jewellery, watches 1st Half 2022 1.3%

Tenant g luxury brands, jewellery, watches 1st Half 2021 1.3%

Tenant H departmental stores & supermarketlifestyle

1st Half 2020 1.2%

Tenant I luxury brands, lifestyle 1st Half 2023 1.2%

Tenant J departmental stores & supermarketlifestyle

2nd Half 2021 1.1%

Total 19.2%

SPH REITAnnuAl REPoRT 2019 30

• department Stores & Supermarket • luxury brands, Jewellery & watches • fashion, Handbags, Shoes, accessories & optical

• food & beverage • lifestyle / general Retail • non-Retail Services • medical / office

PORTFOlIO TRADE MIx

traDe Mixby lettable area1

traDe Mixby gross Rental Income

aS a %

oF LeTTaBLe

area

6.9%

14.8%19.0%7.2%

8.7%

14.2% 12.0%16.4%18.4%

18.8%

10.6%

25.8%

aS a % oF

groSS renTaL

InCoMe

19.1%8.1%

1 lettable area refers to nla in Singapore and gla in australia.

31growing grEATEr VALUE