Suntec Reit’s second-half DPU falls 9.7% as financing costs rise
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Suntec Reit's gross revenue was up 16.9 per cent to $223.7 million for the half-year period, from $191.3 million a year ago.
PHOTO: ST FILE
Janice Tan
SINGAPORE – Suntec Real Estate Investment Trust’s (Suntec Reit) distribution per unit (DPU) fell 9.7 per cent to 4.074 cents for the second half of 2022 ended December, from 4.512 cents a year ago.
This was as higher interest expense for the period resulted in a 27.8 per cent rise in finance costs for the Reit, its manager said in a regulatory filing on Friday.
Gross revenue was up 16.9 per cent to $223.7 million for the half-year period, from $191.3 million a year ago. Net property income grew 14.7 per cent to $162.8 million from $142 million previously.
Mr Chong Kee Hiong, chief executive of the manager, expects continued rising interest rates, weaker exchange rates and higher energy costs to erode operational gains and impact distributions “significantly” in the near term. This is despite the manager increasing the Reit’s fixed interest rate borrowing and foreign currency income hedge.
“We are also actively looking at the potential divestment of our mature assets to strengthen our balance sheet,” he added.
The Reit’s Singapore and Britain portfolios remained resilient, while contribution from the Australia portfolio was lower year on year due to leasing downtime and absence of the surrender fee received a year ago.
Distributable income in the second half slipped 9 per cent to $117.3 million from $129 million a year ago.
For the full year ended Dec 31, DPU was up 2.5 per cent to 8.884 cents from 8.666 cents a year ago. The Reit’s manager attributed this to capital distribution of $23 million, with improvement in distributable income from better operating performance being eroded by higher financing costs.
Distributable income for financial year 2022 rose 3.4 per cent to $255.5 million from $247.2 million a year ago.
The Reit’s gross revenue for the year rose 19.3 per cent to $427.3 million, while net property income grew 24 per cent to $315.8 million.
Units of Suntec Reit were up 1.46 per cent to close at $1.39 on Friday. THE BUSINESS TIMES
