Suntec Reit's quarterly DPU dips on enlarged units base

As at June 30, the Singapore office portfolio achieved an overall committed occupancy of 98.8 per cent. The committed occupancies for Suntec City Office (above) was at 97.9 per cent.
As at June 30, the Singapore office portfolio achieved an overall committed occupancy of 98.8 per cent. The committed occupancies for Suntec City Office (above) was at 97.9 per cent.ST PHOTO: DESMOND WEE

Annualised distribution yield at 5.2% is unchanged from a year ago

Suntec Real Estate Investment Trust reported yesterday a 4.3 per cent rise in distributable income to $66 million for the second quarter on higher property income.

Distribution per unit (DPU) for the three months to June 30 came in at 2.493 cents, 0.3 per cent lower than 2.501 cents for the year-ago quarter, on an enlarged units base which included about 95.7 million new units issued on May 29.

Suntec Reit's annualised distribution yield for the quarter stood at 5.2 per cent, unchanged from a year ago.

Gross revenue for the quarter rose 10.6 per cent to $87.3 million, mainly due to the rental contribution of 177 Pacific Highway in Australia which received practical completion in August last year. Net property income increased by 12.8 per cent to $59.4 million.

For the first half of this year, DPU rose 0.9 per cent year on year to 4.918 cents. Distributable income was 3.7 per cent higher at $127.9 million.

As at June 30, the Singapore office portfolio achieved an overall committed occupancy of 98.8 per cent. The committed occupancies for Suntec City Office, One Raffles Quay and Marina Bay Financial Centre Properties were at 97.9 per cent, 100 per cent and 100 per cent respectively. In Australia, the committed occupancies for 177 Pacific Highway and Southgate Complex (Office) were 100 per cent and 93.5 per cent respectively.

For the Singapore retail portfolio, the overall committed occupancy as at June 30 was 99 per cent. Compared with the previous quarter, the committed occupancy for Suntec City Mall improved to 99.3 per cent, while the committed occupancy for Marina Bay Link Mall increased to 99.5 per cent. In Australia, the committed occupancy for Southgate Complex (Retail) was 88.2 per cent at June 30.

  • AT A GLANCE

  • GROSS REVENUE: $87.3 million (+10.6%)

    NET PROPERTY INCOME: $59.4 million (+12.8%)

    DISTRIBUTION PER UNIT: 2.493 cents (-0.3%)

Suntec Reit announced separately on Monday that it had entered into agreements to acquire a 50 per cent stake in Olderfleet, 477 Collins Street, a freehold land and office tower under development, from Mirvac Group for A$414.17 million (S$447.8 million).

Mirvac will continue as co-owner of the 40-storey tower, which is now under construction and is expected to be completed by mid-2020.

The property is located along Melbourne's prime commercial address, Collins Street, and is within the central business district.

It will have an estimated total net lettable area of 58,000 sq m, comprising 56,000 sq m of office space and 2,000 sq m of retail space. The tower is 39.1 per cent pre-committed by professional services firm Deloitte Australia, as its Melbourne headquarters. Deloitte has signed a 12-year lease for over 22,000 sq m of office space, spanning 12 floors.

Commenting on Suntec Reit's second acquisition in Melbourne, Mr Chan Kong Leong, chief executive of the Reit's manager, said: "This is a strategic fit with Suntec Reit's portfolio of high-quality assets and enhances the Reit's income and geographical diversification.

"The acquisition will improve earnings and distributions to unit holders with an initial net property income yield of 4.8 per cent upon practical completion. In addition, unit holders will enjoy income certainty and stability through the long lease terms and annual rental escalations."

A version of this article appeared in the print edition of The Straits Times on July 27, 2017, with the headline 'Suntec Reit's quarterly DPU dips on enlarged units base'. Print Edition | Subscribe