March 11 (Bloomberg) -- Singapore Press Holdings Ltd., the newspaper publisher that owns the Paragon mall along the city’s shopping belt, climbed to the highest in five years after saying it’s exploring a real estate investment trust.
The stock rose 3.4 percent to S$4.31 at the close in Singapore, the highest since June 2008. The publisher of the Straits Times and other newspapers in Singapore said in January its fiscal first-quarter publishing sales declined 2.3 percent to S$263.5 million ($211 million). Real estate revenue increased 2.9 percent to S$48.2 million in the three months ended Nov. 30.
“Setting up a REIT makes sense for Singapore Press Holdings as they can monetize their assets,” Pearlyn Wong, a Singapore-based analyst with Bank Julius Baer & Co, said in a telephone interview. “In addition, their media business is slowing down.”
The company’s key real estate including the Paragon along Orchard Road and Clementi Mall in a western suburb are “fully leased,” it said earlier this year. A new property called Seletar Mall in a northeastern district is expected to be completed at the end of next year, it said.
The REIT is worth S$2.8 billion excluding Seletar Mall, Wong said. Including the property that’s being developed, the REIT will have S$3.1 billion of assets, she said.
Singapore Press also said in January that it will monitor its cost structure amid changing media consumption trends for a “sustained performance” of its main newspaper business.
“The properties forming the portfolio of the REIT and the terms at which the properties will be injected into the REIT are currently still under review,” Ginney Lim May Ling, the company secretary, said in a statement to the Singapore stock exchange yesterday.
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