BHG Retail REIT Sees Stable Performance Amid Market Challenges

BHG Retail REIT has provided a business update for the third quarter of 2024, showcasing a committed occupancy rate of 96.6% across its portfolio of six properties. The REIT’s net lettable area stands at 179,585 sqm, with a weighted average lease expiry (WALE) of 5.2 years by NLA, indicating a relatively stable leasing environment.

Portfolio Overview

The REIT’s portfolio includes a mix of multi-tenanted and master-leased properties located in key cities such as Beijing, Chengdu, Hefei, Dalian, and Xining. The total valuation of these properties is RMB 4,723.0 million, with properties like Beijing Wanliu holding significant value at RMB 2,551.0 million.

New Tenant Acquisitions and Trade Mix

BHG Retail REIT has successfully attracted new tenants to its malls, enhancing the overall tenant mix and customer experience. Notable new tenants include:

• Vivo Mobile and Tu Rui Xing Children’s Gym at Chengdu Konggang
• Ai Hui Shou E-Recycling at Hefei Mengchenglu
• Popular F&B selections such as Jia Guo Long Hotpot and Yu Zi Grilled Fish, along with Wang Ji Beef Noodles at Beijing Wanliu
• Fashion retailers like Camel Active Menswear and Gao Tu Children Education at Beijing Wanliu

Capital Management

The REIT maintains a gearing ratio of 40.7%, with aggregated borrowings drawn down amounting to S\$299.3 million. The average cost of debt stands at 5.9%, with over 80% of borrowings denominated in Singapore dollars and more than 50% of offshore syndicated borrowings hedged via interest rate swaps. This prudent approach to capital management suggests financial stability and room for growth.

Community Engagement and Sustainability Initiatives

BHG Retail REIT continues to engage with the community through various activities such as the Summer Cooling Festival at Beijing Wanliu and the Watermelon Eating Competition at Chengdu Konggang. Additionally, the REIT emphasizes its commitment to sustainability by implementing energy-saving measures and water management practices to reduce environmental impact.

China Macroeconomic Outlook

China’s GDP growth for Q3 2024 stabilized at 4.6% year-over-year, slightly above the consensus forecast. The retail sales of consumer goods grew by 3.2% year-over-year, indicating mixed consumer demand. Significant economic stimulus measures were introduced in September 2024 to boost growth amid economic challenges.

Looking Forward

BHG Retail REIT plans to reinforce the community positioning of its malls, improve rent while maintaining healthy occupancy rates, and explore acquisition opportunities. The REIT aims to achieve better efficiency and higher rental potential through proactive asset management and asset enhancement initiatives.

Shareholders should note the ongoing tenancy rejuvenation, potential acquisitions, and economic conditions in China, as these factors could impact share values.

Disclaimer

This article contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those expressed in the forward-looking statements. The information provided is for informational purposes only and does not constitute an offer or solicitation to buy or sell any securities. Readers are advised to conduct their own research and consult with a financial advisor before making any investment decisions.

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