BHG Retail REIT: Remarkable 3Q 2024 Performance and Strategic Growth Plans

BHG Retail REIT has delivered a strong performance in the third quarter of 2024, demonstrating resilience and strategic foresight in a challenging economic landscape. Key highlights from the 3Q 2024 update include:

• Portfolio Overview: BHG Retail REIT boasts a committed occupancy rate of 96.6% across its six properties, with a net lettable area (NLA) of 179,585 sqm. The weighted average lease expiry (WALE) by NLA stands at 5.2 years.
• Property Valuation: The portfolio’s total valuation reached RMB 4,723.0 million, with Beijing Wanliu being the most valuable property at RMB 2,551.0 million based on 100% interest.
• Lease Expiry Profile: The WALE as of 30 September 2024 is 3.1 years by gross rental income and 5.2 years by committed NLA, ensuring a stable income stream.
• Trade Mix: The portfolio’s trade mix is diverse, with significant contributions from F&B (29.7%), fashion & accessories (31.9%), and leisure & entertainment (11.8%).
• Capital Management: BHG Retail REIT has a gearing ratio of 40.7%, with the majority of borrowings denominated in Singapore dollars. The average cost of debt is approximately 5.9% per annum.

Shareholders should take note of several strategic initiatives and developments that could impact share values:

• Revitalising Tenancies: BHG Retail REIT is focused on enhancing tenant experiences and rejuvenating tenancies. New lifestyle and retail offerings include Gui Wei Yoga & Pilates and COSO KTV at Beijing Wanliu, and Vivo Mobile and Tu Rui Xing Children’s Gym at Chengdu Konggang.
• Popular F&B Selections: The introduction of popular F&B outlets such as Jia Guo Long Hotpot, Yu Zi Grilled Fish, and Wang Ji Beef Noodles is expected to attract more foot traffic and boost rental income.
• New Tenants in Fashion and Children Sectors: New additions like Camel Active Menswear and Gao Tu Children Education at Beijing Wanliu, and Xtep Sportswear at Chengdu Konggang, will diversify and strengthen the tenant mix.
• Community Engagement: BHG Retail REIT is actively engaging communities through various events, including the Summer Cooling Festival at Beijing Wanliu, and the Summer Water Festival at Chengdu Konggang, enhancing customer loyalty and mall footfall.
• Sustainability Initiatives: The REIT is committed to ESG principles, with a focus on energy efficiency and water management. Noteworthy efforts include installing motion sensor-based lights, LED lights, and water-efficient flushing cisterns.

Looking forward, BHG Retail REIT is poised for continued growth:

• Proactive Asset Management: The REIT aims to reinforce community positioning, maintain healthy occupancy rates, and enhance partnerships with tenants through proactive marketing strategies.
• Proactive Asset Enhancement: Identifying opportunities for improvement, upgrading existing facilities, and reconfiguring spaces are key priorities to achieve better efficiency and higher rental potential.
• Acquisition Growth: BHG Retail REIT completed the acquisition of Hefei Changjiangxilu in April 2019 and will continue to explore acquisition opportunities from the Sponsor’s pipeline and third-party vendors.

With these strategic initiatives and a robust portfolio, BHG Retail REIT is well-positioned to deliver sustained growth and value to its shareholders.

Disclaimer: This article contains forward-looking statements and financial information that are based on the current views and assumptions of the management. Actual future performance and results may differ materially due to various factors and risks. Investors are advised to exercise caution and not place undue reliance on these statements.

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