Suntec REIT reports 15.8% increase in 1HFY2022 DPU of 4.810 cents

Felicia Tan
4-min read

Unitholders will receive their DPUs on Aug 29.

The manager of Suntec REIT has reported a distribution per unit (DPU) of 4.810 cents for the 1HFY2022 ended June, 15.8% higher than the DPU of 4.154 cents in the 1HFY2021.

The REIT’s DPU for the 2QFY2022 increased 14.7% y-o-y to 2.419 cents.

The higher y-o-y DPU was due to the higher distributable income of $138.1 million, up 16.9% y-o-y.

The increase in distributable income was due to the 22.1% y-o-y growth in the REIT’s 1HFY2022 gross revenue, which came in at $203.5 million.

The higher gross revenue was mainly due to contribution from The Minster Building that was newly acquired in July 2021. It was also due to the higher revenue from Suntec City, Suntec Singapore, 21 Harris Street and Olderfleet, 477 Collins Street. This was partially offset by lower revenue from 177 Pacific Highway due to lower occupancy and impact of weaker Australian dollar.

Revenue for Suntec City increased by 9.4% y-o-y to $10.1 million mainly due to the higher retail rent on the back of a higher occupancy, higher fixed and gross turnover rent as well as higher marcoms revenue.

Revenue for Suntec City Office increased by $1.4 million due to the higher occupancy and rent. Excluding the impact of the portfolio of Suntec City Office units divested in September 2021, the revenue from Suntec City Office increased 8.3% y-o-y.

177 Pacific Highway saw gross revenue decline 6.2% y-o-y to $19.2 million due to lower occupancy during the period and the weaker Australian dollar.

Gross revenue from 21 Harris Street and Olderfleet, 477 Collins Street increased by 32.5% and 14.1% y-o-y respectively due to higher occupancy and rent, partially offset by the impact of weaker Australian dollar.

Net property income (NPI) for the 1HFY2022 increased by 35.8% y-o-y to $152.9 million.

Other income for the 1HFY2022 fell 50% y-o-y to $4.1 million mainly due to lower income support required for 21 Harris Street and Olderfleet, 477 Collins Street as a result of higher occupancy at the properties and lower income support required for Nova Properties due to higher retail rent collection.

Share of profits of joint ventures surged 135.8% y-o-y to $104.1 million mainly due to the higher share of revaluation gain from investment properties held by joint ventures.

As at June 30, Suntec REIT’s portfolio committed occupancy stood at 95.3% for its retail portfolio and 97.0% for its office portfolio.

The REIT’s weighted average lease expiry (WALE) stood at 2.3 years and 4.5 years respectively for its retail and office portfolios as at June 30.

As at June 30, Suntec REIT’s net asset value (NAV) per unit stood at 2.132 cents. The REIT’s aggregate leverage ratio stood at 43.1%, unchanged since the 1HFY2021.

Cash and cash equivalents for the period stood at $246.1 million.

In the REIT’s statement, Chong Kee Hiong, CEO of the REIT manager says, “We are continuing to see good recovery of our businesses at Suntec City Mall and Suntec Convention. Following the significant easing of safe management measures in April 2022, both mall traffic and tenant sales posted strong growth, with tenant sales exceeding pre-pandemic levels for three consecutive months from April to June. Suntec Convention recorded positive NPI for the first time in 10 quarters, with higher revenue from corporate events, conferences and long-term licences.”

“The office portfolio in Singapore, Australia and United Kingdom remained resilient, with the Singapore office portfolio achieving positive rent reversion for 16 quarters,” he adds.

Looking ahead, the REIT expects to see a strong revenue contribution from its Singapore office portfolio, while revenue from Suntec City Mall is expected to be supported by higher occupancy and higher marcoms activities. The convention business is also on the “road to recovery” due to domestic consumer and corporate events and the return of small-scale international MICE (or meetings, incentives, conferences and exhibitions) events.

In Australia, economic conditions are expected to increase with the country’s GDP growth and lower unemployment rates, which bode well for the REIT’s portfolio.

In the UK, macroeconomic headwinds are expected to weigh on market growth and business sentiments. Revenue from the REIT’s UK office portfolio is expected to remain “resilient” with its higher occupancy rate and long WALE.

Unitholders will receive their DPUs on Aug 29.

Units in Suntec REIT closed at $1.59 on July 26.

See Also: