Suntec Reit's Sydney asset helps cushion blow

Suntec Real Estate Investment Trust yesterday reported a 5.6 per cent decline in distribution per unit (DPU) to 2.596 cents for the fourth quarter, compared to 2.75 cents a year ago.

Net property income (NPI) for the three months ended Dec 31 dipped 2.9 per cent to $60.7 million, due to the divestment of Park Mall and lower income from Suntec City and Suntec Singapore, offset by a contribution from 177 Pacific Highway in Sydney.

Gross revenue of $88.9 million was 1.6 per cent higher but distributable income fell by 4.9 per cent to $66.1 million.

On a full-year basis, Suntec Reit announced DPU of 10.003 cents, almost unchanged from the 10.002 cents for 2015, as NPI slipped 2 per cent to $224.6 million.

Gross revenue was 0.3 per cent lower at $328.6 million.

  • AT A GLANCE

  • DISTRIBUTION PER UNIT: 2.596 cents (-5.6%)

  • DISTRIBUTABLE INCOME: $66.1 million (-4.9%)

  • NET PROPERTY INCOME: $60.7 million (-2.9%)

Mr Chan Kong Leong, CEO of the Reit's manager, said: "While we remain Singapore-centric, we have in 2016 deepened our presence in Australia with the acquisition of an initial 25 per cent interest in the iconic Southgate Complex, Melbourne. We have also demonstrated our execution and development capabilities with the practical completion of 177 Pacific Highway on Aug 1... "

As at Dec 31, Suntec Reit's Singapore office portfolio had achieved an overall committed occupancy rate of 99.3 per cent.

The committed occupancies for Suntec City Office, One Raffles Quay and Marina Bay Financial Centre properties came up to 98.9 per cent, 100 per cent and 99.8 per cent, respectively.

In Australia, the committed occupancies for 177 Pacific Highway and Southgate Complex (Office) stood at 100 per cent and 86.1 per cent, respectively.

On Suntec Reit's retail performance, the committed occupancy of Suntec City Mall strengthened to 97.9 per cent and mall footfall improved 16.1 per cent year-on-year to almost 40 million shoppers, said Mr Chan.

Providing an update on the development of 9 Penang Road, formerly known as Park Mall, he added that the office-cum-retail project is scheduled to be completed by end-2019, "when the new office supply is expected to be limited".

The 10-storey building consists of two wings with an approximate net lettable area of 352,000 sq ft of office space across eight floors and 15,000 sq ft of retail space on one floor.

Suntec Reit has a 30 per cent stake in the joint venture undertaking the project, which is estimated to cost $800 million.

Singhaiyi Group and Haiyi Holdings each holds a 35 per cent interest in the development.

Suntec Reit units yesterday closed one cent higher at $1.695.

A version of this article appeared in the print edition of The Straits Times on January 26, 2017, with the headline 'Suntec Reit's Sydney asset helps cushion blow'. Print Edition | Subscribe