SUNTEC Reit’s distribution per unit (DPU) for the third quarter ended September fell by 11.9 per cent to S$0.0158, from S$0.01793 in the year-ago period.
The fall in DPU was attributed to the completion of a S$5.8 million capital distribution which concluded in end-2023.
Distributable income fell 11.2 per cent to S$46.2 million from S$52 million the year before. Net property income was down 5.7 per cent at S$79.8 million from S$84.6 million in the previous year.
Revenue dropped 4.6 per cent to S$117.7 million from S$123.4 million in Q3 2023, the Reit’s manager said on Thursday (Oct 24). The decline was due to lower contributions from Suntec City Convention Centre, an office building in Australia and another office building in the United Kingdom.
This was offset by the strong performance of Suntec City’s office buildings, which saw a 14 per cent positive rental reversion in Q3, surpassing market levels in the core Central Business District (CBD). Committed occupancy stood at 99.9 per cent.
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Rental reversions in Q3 were 21.2 per cent for Suntec City Mall, where eight new brands began operations the last quarter.
“Tenant sales growth is likely to be positive with rent reversion remaining strong. Revenue from Suntec City Mall is expected to be robust, supported by higher occupancy, rent and marcoms revenue,” the Reit’s manager said.
Revenue from Suntec City Convention Centre fell 24.2 per cent to S$16.9 million as Singapore was the host city for large-scale events in Q3 last year, such as the World Congress of Dermatology and WorldSkills Asean.
However, in the long term, Singapore’s meetings, incentives, conferences and exhibitions’ market is expected to grow, and higher year-on-year dividend contribution from Suntec Convention is expected, the manager said.
Suntec Reit’s Australia portfolio was hit by lower vacancies in some office buildings: One office building, 55 Currie Street in Adelaide, had a committed occupancy of 61.4 per cent; another building, Southgate Complex in Melbourne, had a committed occupancy of 89.2 per cent as at Sep 30.
“Revenue of 55 Currie Street and Southgate Complex will continue to be impacted by leasing downtime and higher incentives on weak market conditions,” the Reit’s manager said.
The Reit’s United Kingdom portfolio was affected by higher vacancies at the Minster Building, but it expects that occupancy and rental growth in Central London will continue to improve, supported by tight supply and increase in office utilisation.
The manager said: “Good-quality office assets in prime locations remain well sought-after. Revenue for the UK portfolio will be impacted by the leasing downtime at The Minster Building, although it is expected to be fully leased by end 2024.”
The distribution for Q3 will be paid on Nov 28.
Units of Suntec Reit closed flat at S$1.25 on Thursday, before the announcement.
