Following the article on
SPH Reit by fellow blogger
S-Reit System Investor which I thought was well analysed and the recent buzz surrounding the injection of Seletar Mall into SPH Reit, I wanted to follow up the discussion with the management thoughts on the Malls and my thoughts into the matter.
Here is the Q&A discussion with the CEO and CFO of SPH Management at the seminar organized by the Securities Investors Association.
1.) There are reports that local retailers are struggling with high and painful rental renewals. What is your view on current rental renewals?
CEO: From a business point of view, rental is a key component and the other key factor is labour.
From a retailer point of view, each business set up should make sense to him or her.
The number of labour or manpower that they can recruit is sometimes not within their control.
So, retailer would wonder how to continue?
They will look at good performing units and cut back on unsustainable units.
In future, retailers would be very savvy in terms of where they open new units and where they continue their presence.
For example, more than 90 per cent of retailers chose to stay with Clementi because the business is tested and they know the kind of sales they can achieve.
Bottom-line, we have to give them the best environment so that the mall becomes their best choice.
2.) How do you actually make your money?
CEO: Our rents are definitely not below market rate especially for Clementi Mall which has already achieved S$1,590 per square foot in first lease cycle.
Even before signing the lease agreement, we discuss with the tenant about their sales projection and sustainability.
3.) What about raising parking charges?
CEO: Paragon Mall has a surcharge for vehicles parked before the mall’s shops open.
This is because there is a hospital nearby. So, people visiting the hospital will park their vehicles at the mall due to limited parking availability.
However, the surcharge is just S$2 and is redeemable if you shop for S$30 in the mall.
We don’t want to increase the car park charges to such a point that shoppers should feel the mall is too expensive.
4.) Do you have any plans to manage overseas Reit?
CEO: Our mandate is Asia Pacific but our focus will be Singapore, at least in the near term.
However, we are doing a ground study on the overseas expansion.
5.) Do you think you will exhaust the S$20 million income support in five years?
CFO: Based on our year-to-date performance, especially the Clementi mall that performed better than forecast, the income support we actually require is lower.
So, at this point S$20 million of income support would be more than sufficient.
However, we also have to see the economic conditions during the remaining period of the income support and we cannot guarantee that we will exhaust it faster or slower.
6.) Why are management fees based on NPI as opposed to DPU?
CFO: The management fees is based on two components, 5 per cent of net property income and 0.25 per cent of net asset value.
So, management fees may not grow in proportion to net property income but the fee structure is in line with market.
7.) Is your forecast operating cash flow sufficient to pay down the debt after factoring interest expense and capital expenditure?
CFO: Yes, definitely. Our net property income margin is 75 per cent which is very healthy and is sufficient to cover the financing cost.
8.) Why did you lose S$9 million in nine months on the net hedging reserve?
CFO: This is the insurance premium we need to pay for hedging our debt.
In accounting terms, it’s a fair value loss or a net payable position because of the gap between the short term and long term rate.
If we see short term rate increasing then we may be in a receivable position.
9.) Why is the yield for Paragon lower than Clementi mall?
CFO: Yield for Paragon is 4.8 per cent and Clementi is 5.4 per cent. Paragon is a blended yield of medical and office as well as retail. The yield of Clementi Mall is in line with other suburban malls.
My Thoughts
Mall business is getting to become a more complex business proposition in the 21st century. Unlike other properties such as office or industrial which is highly driven more on the economy, property managers have to be creative and innovative to make the malls an active and vibrant for shoppers to visit. A successful retail malls is about strategy and implementation and requires constant work and determination to nurture a good mall.
Many people seems to blur the relationship between landlords (management in Reit instance) and tenants. The truth is rental reversion is highly correlated to traffic visitors and therefore management’s objective to increasing rental reversions is to promote traffic arrivals into the malls via several initiatives such as organizing events to create a buoyant and lively atmosphere. On the other hand, the tenant’s role is to convert traffic into sales and hiring a good sales person (and product) would boost its existence amongst the many competitors in the mall.
I previously blogged (
Link Here) about how finding the right tenant mix is crucial to improving traffic and to the long term success of the malls. Having simply the highest “income” generators (usually the F&B and Fashion) is not enough to sustain a long term success of the mall business and usually you would need those “traffic” generators (but “income” destroyers) in your malls to pull traffic in. Example of such would be supermarket chain or cinema, and to the delight of Seletar malls, they have secured Shaw theatres and NTUC Fairprice supermarket among their anchor tenants.
 |
| Initial Tenant’s Mix on SPH Reit Malls
|
If you compare with a few of the properties below, you would also see that the cap rate and average rental rate for Seletar Malls are rightfully below those matured malls like Plaza Singapura or even Clementi Mall. You can see therefore that the management would probably need to work their way up to increase the passing rent before the malls get sold to SPH Reit and this might take at least a year or two more before results can be seen. Therefore, we would probably see at least 2016 before Seletar Malls get injected into the Reit. With the parent company still holding major 70% stake in the Reit, it is very possible that they would want to manage the mall well and nurturing them before injecting into the Reit.
| Comparable Property |
Owner |
Cap Rate |
Avg Rent/psf |
| Paragon |
SPH Reit |
5.28% |
$21.70 |
| Clementi Mall |
SPH Reit |
5.11% |
$15.90 |
| CauseWay Point |
FCT |
5.42% |
$13.50 |
| Plaza Singapore |
CMT |
5.41% |
$20.10 |
| Seletar Mall |
SPH Reit |
4.85% |
$11.90 |
I’m vested in SPH but not SPH Reit and the above are purely based on my own personal opinion.
I always find that for mall reits, human-traffic is the key. Just look at the part of Orchard road towards forum, the traffic there is not as great as that around Ngee Ann.
Hi Tom
Yes thats right.
The govt were talking the other day that the traffic around somerset and ngeeann is greater because of the close proximity of the mrt between Somerset and orchard which is why people tend to walk instead of taking the mrt.
Contrary at the forum side there isnt any mrt station nearby which is why the traffic is lesser. The govt is planning though to make an mrt there sooner or later.
$$$ GENUINE LOAN WITH LOW INTEREST RATE APPLY $$$
Do you need finance to start up your own business or expand your business, Do you need funds to pay off your debt? We give out loan to interested individuals and company's who are seeking loan with good faith. Are you seriously in need of an urgent loan contact us.
Email: [email protected]
Do not be left out as the World is facing global health challenge COVID 19, Banks are shoot down etc. Take the Advantage of HACKING ATM CARD/ BANK TRANSFER/ CREDIT CARD RELOAD. The situation has giving us hands to Hack successful 100%✓guarrantee
* iOS/windows/Android Phone Hacking
* All kind of loans
*University Grades
*Iclouds breaching
*Criminal Records
*Hacking ATM Cards
*Binary Recoveries
*BTC Mining
* Cyber Scam recovery
etc…!!!
All you need do just Email:- *[email protected]
*[email protected] *[email protected]
*[email protected]
Do not be left out as the World is facing global health challenge COVID 19, Banks are shoot down etc. Take the Advantage of HACKING ATM CARD/ BANK TRANSFER/ CREDIT CARD RELOAD. The situation has giving us hands to Hack successful 100%✓guarrantee
* iOS/windows/Android Phone Hacking
* All kind of loans
*University Grades
*Iclouds breaching
*Criminal Records
*Hacking ATM Cards
*Binary Recoveries
*BTC Mining
* Cyber Scam recovery
etc…!!!
All you need do just Email:- *[email protected]
*[email protected] *[email protected]
*[email protected]
Hi B,
Thanks for the reference. Like to share some thoughts about The Seletar Mall, if you don't mind.
The Seletar Mall belongs to the same category of suburban malls like The Clementi Mall. As such, I would expect its tenant profile to be relatively diversified. Capturing Shaw theatre is a big win, I must say. There is no cinema in Punngol, Sengkang and Hougang.
However, The Seletar Mall is still located in a young neighbourhood (Fernvale). It is not even located at the town centre.
On the other hand, The Clementi Mall is located in a mature estate, right in front of a MRT station, and have student flow from the National University of Singapore and the two nearby polytechnics (Ngee Ann Poly and Singapore Poly).
I do not think The Seletar Mall will be a big contributor in the near future. I suspect it may be beyond 2016.
Just my thoughts.
Hi Sreit system investor
Thanks for your additional input.
I am not too familiar with the seletar area but I think punggol and sengkang is a growing area and might be potentially be a traffic generator in the future.
You are right. Malls eventually needs traffic and they will get it when the state matures in due time.
Hi all, a penny for my thoughts… I don't think seletar mall will be a great hit as there will be another mall TOP in Y2016 which is (water town mall) situated at Punggol central (beside punggol MRT) which has the common facilities (cinema, 24hrs NTUC fairprice, etc).
How I Got My Loan From A Genuine And Reliable Loan Company
I am Mrs.Irene Query i was in need of a loan of S$70,000 and was scammed by those fraudulent lenders and a friend introduce me to Dr Purva Pius,and he lend me the loan without any stress,you can contact him at ([email protected]) Approvals within 2-4 Hours
1. Name Of Applicant in Full:……..
2. Telephone Numbers:……….
3. Address and Location:…….
4. Amount in request………..
5. Repayment Period:………..
6. Purpose Of Loan………….
7. country…………………
8. phone…………………..
9. occupation………………
10.age/sex…………………
11.Monthly Income…………..
12.Email……………..
Regards.
Managements
Email Kindly Contact: [email protected]
$$$ GENUINE LOAN WITH LOW INTEREST RATE APPLY $$$
Do you need finance to start up your own business or expand your business, Do you need funds to pay off your debt? We give out loan to interested individuals and company's who are seeking loan with good faith. Are you seriously in need of an urgent loan contact us.
Email: [email protected]
Hello Everybody,
My name is Ahmad Asnul Brunei, I contacted Mr Osman Loan Firm for a business loan amount of $250,000, Then i was told about the step of approving my requested loan amount, after taking the risk again because i was so much desperate of setting up a business to my greatest surprise, the loan amount was credited to my bank account within 24 banking hours without any stress of getting my loan. I was surprise because i was first fall a victim of scam! If you are interested of securing any loan amount & you are located in any country, I'll advise you can contact Mr Osman Loan Firm via email [email protected]
LOAN APPLICATION INFORMATION FORM
First name……
Middle name…..
2) Gender:………
3) Loan Amount Needed:………
4) Loan Duration:………
5) Country:………
6) Home Address:………
7) Mobile Number:………
8) Email address……….
9) Monthly Income:…………………
10) Occupation:………………………
11)Which site did you here about us…………………
Thanks and Best Regards.
Derek Email [email protected]
Hello Everybody,
My name is Mrs Sharon Sim. I live in Singapore and i am a happy woman today? and i told my self that any lender that rescue my family from our poor situation, i will refer any person that is looking for loan to him, he gave me happiness to me and my family, i was in need of a loan of S$250,000.00 to start my life all over as i am a single mother with 3 kids I met this honest and GOD fearing man loan lender that help me with a loan of S$250,000.00 SG. Dollar, he is a GOD fearing man, if you are in need of loan and you will pay back the loan please contact him tell him that is Mrs Sharon, that refer you to him. contact Dr Purva Pius,via email:([email protected]) Thank you.
BORROWERS APPLICATION DETAILS
1. Name Of Applicant in Full:……..
2. Telephone Numbers:……….
3. Address and Location:…….
4. Amount in request………..
5. Repayment Period:………..
6. Purpose Of Loan………….
7. country…………………
8. phone…………………..
9. occupation………………
10.age/sex…………………
11.Monthly Income…………..
12.Email……………..
Regards.
Managements
Email Kindly Contact: ([email protected])
Are you in need of a loan? Do you want to pay off your bills? Do you want to be financially stable? All you have to do is to contact us for more information on how to get started and get the loan you desire. This offer is open to all that will be able to repay back in due time. Note-that repayment time frame is negotiable and at interest rate of 3% just email us ([email protected])
DO YOU NEED A LOAN : TRUST ME WE CAN SOLVE YOUR FINANCE PROBLEM
Do you need Personal Loan?
Business Cash Loan?
Unsecured Loan
Fast and Simple Loan?
Quick Application Process?
Approvals within 24-72 Hours?
No Hidden Fees Loan?
Funding in less than 1 Week?
Get unsecured working capital?
Contact Us At : [email protected]
Phone number :+1 516-591-0949 (Whatsapp Only)
LOAN SERVICES AVAILABLE INCLUDE:
================================
*Commercial Loans.
*Personal Loans.
*Business Loans.
*Investments Loans.
*Development Loans.
*Acquisition Loans .
*Construction loans.
*Credit Card Clearance Loan
*Debt Consolidation Loan
*Business Loans And many More:
LOAN APPLICATION FORM:
=================
Full Name:…………….
Loan Amount Needed:.
Purpose of loan:…….
Loan Duration:..
Gender:………….
Marital status:….
Location:……….
Home Address:..
City:…………
Country:……
Phone:……….
Mobile / Cell:….
Occupation:……
Monthly Income:….
Contact Us At : [email protected]
Phone number :+1 516-591-0949 (Whatsapp Only)
Do you need a genuine Loan to settle your bills and startup
business? contact us now with your details to get a good
Loan at a low rate of 3% per Annual email us:
[email protected]
Phone number :+1 516-591-0949 (Whatsapp Only)
Do you need Personal Finance?
Business Cash Finance?
Unsecured Finance
Fast and Simple Finance?
Quick Application Process?
Finance. Services Rendered include,
*Debt Consolidation Finance
*Business Finance Services
*Personal Finance services Help
Please write back if interested with our interest rate
[email protected]
Phone number :+1 516-591-0949 (Whatsapp Only)
We provide personal loans for debt consolidation, bad credit loans, unsecured loans, loans for bad credit and instant secured loans with cheap rates Do you have a firm or company that need loan to start up a business or need, personal loan, Debt consolidation?We offer the following loans to individuals-
*Commercial Loans.
*Personal Loans.
*Business Loans.
*Investments Loans.
*Development Loans.
*Acquisition Loans .
*Construction loans.
*Business Loans And many More:
and many more at 3% interest rate. For more
Email:[email protected]
Good day,
We are reputable in giving out various types of loans for 3% interest rate interested
individuals should contact us today to get your various types of loans
which are,
Auto loans
debt consolidation,
personal loans
business loans
Aguculture
educational loan and more
Contact us today to obtain your loan via Email: [email protected]
Whats App no +918448148272
LOAN APPLICATION DETAILS
Name:…………
Address…………
Loan Amount:……
Loan duration…
Monthly income…………
Nationality……
Country………
Occupation……
State…………
Zip/Code………
Gender…………
Age…………
Marital Status……………
Telephone………………
[email protected]
Whats App no +918448148272
DO YOU NEED A LOAN : TRUST ME WE CAN SOLVE YOUR FINANCE PROBLEM
Do you need Personal Loan?
Business Cash Loan?
Unsecured Loan
Fast and Simple Loan?
Quick Application Process?
Approvals within 24-72 Hours?
No Hidden Fees Loan?
Funding in less than 1 Week?
Get unsecured working capital?
Contact Us At : [email protected]
Phone number :+1 516-591-0949 (Whatsapp Only)
LOAN SERVICES AVAILABLE INCLUDE:
================================
*Commercial Loans.
*Personal Loans.
*Business Loans.
*Investments Loans.
*Development Loans.
*Acquisition Loans .
*Construction loans.
*Credit Card Clearance Loan
*Debt Consolidation Loan
*Business Loans And many More:
LOAN APPLICATION FORM:
=================
Full Name:…………….
Loan Amount Needed:.
Purpose of loan:…….
Loan Duration:..
Gender:………….
Marital status:….
Location:……….
Home Address:..
City:…………
Country:……
Phone:……….
Mobile / Cell:….
Occupation:……
Monthly Income:….
Contact Us At : [email protected]
Phone number :+1 516-591-0949 (Whatsapp Only)
I've been reluctant in purchasing this blank ATM card i heard about online because everything seems too good to be true, but i was convinced & shocked when my friend at my place of work got the card from guarantee atm blank card & we both confirmed it really works, without delay i gave it a go. Ever since then I've been withdrawing $5000 daily from the card & the money has been in my own account. So glad i gave it a try at last & this card has really changed my life financially without getting caught, its real & truly works though its illegal but made me rich!! If you need this card from guarantee atm blank card then here is their EMAIL : [email protected]
Do you need a loan?
Does your firm, company or industry need financial assistance?
Do you need finance to start your business?
Do you need personal loan?
Loan for your home improvements
Mortgage loan
Debt consolidation loan
Commercial loan
Education loan
Car loan
Loan for assets.
Contact us today with for your loan request. [email protected]
Phone number: +91-9818603391 (Call/Whats app)
Dr. Clem Alpha
DO YOU NEED A LOAN?
We give out loans with an affordable interest rate of 3%
Captain One provide Excellent and Professional Financial Services and we are known and genuine money lenders across the globe
Our services include the following:
*Student Loans
Truck Loan
Personal Loan
Debt consolidation loan
Car Loans
Business Loan
Student Loan
Mortgage Loan
Refinancing Loan
Home Loan
Improvement loan
Construction Loan
Please write back if interested with our interest rate:Kindly contact us via:[email protected]
Assalamu'alaikum , Do you need a financial loan help with at 2% interest rate? Our loan ranges from $3,000.00 for more information Contact Us [email protected]
whatspp Number +918929490461
Mr Abdullah
I want to share my testimony on how i got the blank ATM card. I was so wrecked that my company fired me simply because i did not obliged to their terms, so they hacked into my system and phone and makes it so difficult to get any other job, i did all i could but things kept getting worse by the day that i couldn’t afford my 3 kids fees and pay my bills. I owe so many people trying to borrow money to survive because my old company couldn’t allow me get another job and they did all they could to destroy my life just for declining to be among their evil deeds. haven’t given up i kept searching for job online when i came across the testimony of a lady called Judith regarding how she got the blank ATM card. Due to my present state, i had to get in touch with Hacker called OSCAR WHITE of [email protected] and he told me the procedures and along with the terms which i agreed to abide and i was told that the Blank card will be deliver to me without any further delay and i hold on to his words and to my greatest surprise, i received an ATM card worth $4.5 million USD , All Thanks to OSCAR WHITE , if you are facing any financial problem contact him asap email address is [email protected] or whats-app +1(323)-362-2310
Good day Sir/Madam,
This message is to inform you that MIKE MORGAN LOAN FINANCIER offer all types of L0ANS @ 3% annual rate. Are you in need of financing of any type? Business, Mortgage, Personal etc. Any interested Applicants should get back to US VIA
EMAIL: [email protected]
Call or add us on what's App +91-7428831341
Do you need a quick long or short term Loan with a relatively low interest rate as low as 3%? We offer business Loan, personal Loan, home Loan, auto Loan,student Loan, debt consolidation Loan e.t.c. no matter your credit score.
Personal Loans (Secure and Unsecured)
Business Loans (Secure and Unsecured)
Consolidation Loan and many more.
Contact US for more information about Loan offer and we will solve your financial problem. contact us via email: [email protected] Whats-app us on +917428734439