BHG Retail REIT 1H 2025 Financial Results Analysis

BHG Retail REIT released its 1H 2025 results on August 7, 2025, providing investors with a comprehensive view of its operational and financial performance. The REIT, which manages a portfolio of six retail properties across key Chinese cities, continues to navigate a challenging macroeconomic environment while focusing on tenant revitalization and community engagement.

Key Financial Metrics and Performance Table

The decline in both gross revenue and net property income compared to 1H 2024 is primarily attributed to the weakening of the RMB against the SGD, a lower occupancy rate in certain properties, and rental support provided to Dalian and Xining properties.

Dividend and Distribution Details

• Distribution per Unit (DPU): 0.22 SGD cents for 1H 2025
• Distribution Period: 1 January 2025 to 30 June 2025
• Payment Date: 26 September 2025
• Distribution Retention: Approximately S\$0.1 million retained for operational expenses and working capital

Portfolio Overview

• Number of Properties: 6
• Committed Occupancy Rate: 95.1%
• Net Lettable Area (NLA): 179,242 sqm
• Weighted Average Lease Expiry (WALE): 4.4 years (by NLA)
• Portfolio Valuation (as at 31 Dec 2024): RMB 4,729.0 million

The REIT’s portfolio remains diversified, with a focus on experiential retail. Approximately 65% of gross rental income and 62% of NLA are derived from experiential segments, excluding fashion and accessories. The tenant mix includes F&B (29.9% of rental income), fashion & accessories (34.7%), kids’ education & retail (14.1%), and leisure & entertainment (10.8%).

Balance Sheet and Capital Management

• Total Assets: SGD 871.0 million
• Total Liabilities: SGD 375.6 million
• Aggregated Borrowings: SGD 296.8 million
• Average Cost of Debt: 4.8% (5.5% including amortisation)
• Interest Coverage Ratio: 1.8x
• Debt Profile: ~80% of borrowings denominated in SGD, with term loan facilities successfully rolled over for 3 years in March 2025

Macroeconomic Environment and Outlook

China’s macro backdrop in 1H 2025 saw GDP growth of 5.3% year-on-year, retail sales up 5.0%, and urban residents’ disposable income rising 4.7%. These numbers are supported by government-led consumption stimulus programs. Consumer confidence has shown modest improvements, though external risks such as US tariff actions and global uncertainties remain.

Operational and Strategic Initiatives

• Tenant Revitalization: New electronics, lifestyle, F&B, and children’s category tenants were introduced during 1H 2025 to refresh mall offerings and drive footfall.
• Community Engagement: The REIT organized numerous physical events and workshops to foster community ties and enhance mall experiences.
• Sustainability: The REIT continues to advance its ESG agenda, focusing on energy efficiency, water management, and community CSR initiatives. Notably, it has won multiple awards for retail excellence, investor relations, and ESG leadership.
• Asset Enhancement: Ongoing assessments and upgrades are planned to improve mall efficiency and rental potential.
• Acquisition Strategy: The Manager remains open to acquiring quality income-producing properties from the sponsor’s pipeline and third-party vendors.

Conclusion

The financial performance of BHG Retail REIT in 1H 2025 reflects resilience amid currency headwinds, selective rental support, and ongoing macroeconomic uncertainties. While revenue and net property income declined year-on-year, the portfolio occupancy remained robust at 95.1%, and the REIT continued to pay distributions. Active tenant rejuvenation, community initiatives, and ESG progress are expected to support long-term value. The outlook is cautiously optimistic, with management focusing on proactive asset management and leveraging sponsor relationships for growth opportunities.

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