The improvement comes amid stronger operational performance of its Singapore portfolio and lower financing costs
[SINGAPORE] The manager of Suntec Real Estate Investment Trust (Reit) on Thursday (Oct 23) posted a distribution per unit (DPU) of S$0.01778 for its third quarter ended Sep 30, up from S$0.0158 for the previous corresponding period.
Distributable income was 13.4 per cent higher at S$52.4 million for Q3, compared to S$46.2 million for the year-ago period.
The higher DPU and distributable income were led by stronger operational performance of the Reit’s Singapore portfolio and lower financing costs. The manager said Q3 performance was also driven by the reversal of withholding tax provision for its Australia portfolio, as the managed investment trust status is maintained for FY2025.
The distribution for Q3 will be paid out on Nov 28, after the record date on Oct 31.
Revenue edged down 0.2 per cent year on year to S$117.5 million; net property income was down 1.6 per cent year on year at S$78.5 million.
This came as gains from the Reit’s Singapore portfolio were offset by the surrender of three floors in its Sydney asset, which have been backfilled, as well as lower takings from its London asset.
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Chong Kee Hiong, chief executive officer of the manager, said: “The continual growth in operating performances of the Singapore office, retail and convention portfolios and stability in the United Kingdom portfolio highlight the strong fundamentals of our properties.”
He added: “This more than offset the weaker performances of some properties in our Australia portfolio, in line with the Reit’s diversification strategy to enhance income stability.”
Revenue for Suntec Reit’s Singapore retail portfolio rose 2.6 per cent in Q3 to S$36.1 million, from S$35.2 million previously. This was led by higher occupancy and rent at Suntec City Mall.
Committed occupancy of the Singapore retail portfolio was 99.3 per cent, up from 98.3 per cent in the previous corresponding period. Rent reversion rose 8.6 per cent.
The manager expects traffic and sales to improve in Q4, buoyed by the festive season and efforts to drive strategic partnerships with social media platforms. It projects committed occupancy to improve further with proactive lease management.
“Stable performance is expected at Suntec City Mall, supported by high occupancy and past quarters of positive rent reversions,” it added.
Revenue from Suntec Singapore Convention & Exhibition Centre rose 6.5 per cent year on year to S$18 million, amid more corporate events and higher rentals from long-term licences.
The manager expects the centre’s financial performance to be stable, given the government’s support for the meetings, incentives, conferences and exhibitions industry. The segment will also be supported by higher-yielding events, public-sector events and new revenue streams, it added.
Rent reversion of the Reit’s Singapore office portfolio rose 8.5 per cent in Q3. Committed occupancy was 98.5 per cent, down from 99.1 per cent in the year-ago period.
“Moderate rent growth in office expected to be underpinned by limited new supply and tight vacancies,” said the manager, who added that it will continue to engage tenants on renewals to reduce downtime and sub-divide spaces to capture demand.
“The Singapore office portfolio performance is likely to remain stable, supported by healthy occupancies and past quarters of robust rent reversions,” it noted.
As at Sep 30, the Reit’s net asset value per unit stood at S$2.02. Its aggregate leverage ratio was 41 per cent, down slightly from 41.1 per cent as at Jun 30. Its weighted average debt to maturity was 2.97 years.
Units of Suntec Reit ended Thursday flat at S$1.36, before the results were released.
