SPHREIT released its 3QFY20 Business Update this evening. This comes after it shifted to half-yearly reporting; the link to the presentation can be found here. Would like to highlight a few things to take note of:

  1. DPU continues to be low but may not be because of a low payout ratio

SPHREIT declared a DPU of 0.5 Scts for the quarter representing an increase over 0.3 Scts declared in the last quarter. However, it did not disclose its distributable income hence we are unable to accurately calculate what the current payout ratio is. If we take last quarter’s results, this represents a payout ratio of 33%, up from 20% previously.

In all likelihood, 3Q distributable income would have been significantly worse off than 2Q as the quarter covered Mar-May which were the months which felt the most impact from Covid-related mall closures. Additionally, SPHREIT also announced that they were giving rental waivers for tenants. Therefore, the reduced DI would