Suntec Reit's DPU little changed in Q3

For Suntec Reit's office and retail portfolios, One Raffles Quay had full committed occupancy as of Sept 30.
For Suntec Reit's office and retail portfolios, One Raffles Quay had full committed occupancy as of Sept 30.ST FILE PHOTO

Higher distributable income from ops despite Park Mall divestment

Suntec Real Estate Investment Trust (Reit) posted a third-quarter distribution per unit (DPU) of 2.535 cents, little changed from 2.522 cents a year earlier, as distributable income from operations rose despite the divestment of Park Mall.

Total distributable income rose 1.1 per cent from a year ago to $64.3 million, on contributions from One Raffles Quay as well as 177 Pacific Highway in Sydney; interest savings; and a capital distribution of $4 million from the sale proceeds of Park Mall.

The DPU of 2.535 cents includes a capital distribution of 0.158 cent per unit from the Park Mall sale proceeds. Net property income in the three months to Sept 30 was $57.2 million, down 2.1 per cent from a year ago, mainly due to the divestment of Park Mall last December.

Gross revenue was $82.4 million, down 4.3 per cent year on year, as the contributions from 177 Pacific Highway after practical completion and the opening of Suntec City mall (Phase 3) following the completion of the asset enhancement works failed to make up for lower revenue from Suntec Singapore overall and the loss of Park Mall.

As of Sept 30, the overall committed occupancy for Suntec Reit's office and retail portfolios stood at 99.4 per cent and 97.3 per cent, respectively.

For the office portfolio, Suntec City Offices' committed occupancy improved to 98.9 per cent while the One Raffles Quay and Marina Bay Financial Centre properties had full committed occupancy as of Sept 30. 177 Pacific Highway, which received its practical completion on Aug 1, also had 100 per cent committed occupancy.

  • AT A GLANCE

    Gross Revenue:

    $82.4 million (-4.3%)

    Distributable income:

    $64.3 million (+1.1%)

    DPU:

    2.535 cents (+0.5%)

For the retail portfolio, the committed occupancy for the entire Suntec City mall was 96.8 per cent as of Sept 30. The committed occupancy was 100 per cent for One Raffles Quay and 99.5 per cent for Marina Bay Link Mall.

Mr Yeo See Kiat, chief executive of Reit manager ARA Trust Management (Suntec), said the Reit had renewed and signed about 164,000 sq ft of office leases in the third quarter, reducing the lease expiries for this year and next to 0.4 per cent and 12.2 per cent, respectively.

"Looking ahead, we expect the performance of our office portfolio to remain stable this year," he said.

On the Reit's retail performance, he said: "Amid the soft retail market, our strategy to drive shopper traffic to our mall by focusing on strengthening the tenancy mix has shown results as we welcome flagship shops and new-to-market concepts to Suntec City."

He added that the plans to redevelop Park Mall into a new office and retail complex are on track, and that the premises were taken back on Sept 30 for redevelopment.

Net asset value per unit was $2.128 as of Sept 30, down from $2.154 as of Dec 31 last year. The results were posted after trading hours. The counter closed 1.5 cents, or 0.86 per cent, lower at $1.73 yesterday.

A version of this article appeared in the print edition of The Straits Times on October 21, 2016, with the headline 'Suntec Reit's DPU little changed in Q3'. Print Edition | Subscribe