Suntec REIT's DPU fell 1.2% in 1HFY2024 to 3.042 cents

The Edge Singapore
1-min read

Suntec REIT's DPU fell by 1.2% in 1HFY2024, but gearing remained the same at 42.3% versus a quarter ago.

Suntec REIT reported distributable income from operations of $88.7 million for the period from Jan 1 to June 30, its 1HFY2024. Distribution per unit (DPU) from operations of 3.042 cents to unitholders was 1.2% lower year-on-year. With the absence of capital distribution in 1H2024, DPU declined 12.5% y-o-y.

Operating performance from the Singapore Office, Retail and Convention portfolio continued to strengthen. In Australia, higher financing costs and vacancies from 55 Currie Street in Adelaide and The Minster Building in London weighed on the distributable income. On the divestment front, Suntec REIT had divested $31.5 million of strata units at Suntec City Office Towers at an average price of 27% above book value. The proceeds will be used to pare down debts.

In Australia, the nationwide CBD office market occupancy is expected to decline due to supply coming onstream in the second half of 2024. Revenue of 55 Currie Street and Southgate Complex will be impacted by vacancies and higher incentives from weak market conditions. United Kingdom Portfolio Occupancy and rental growth in Central London will continue to improve, supported by tight supply and increase in office utilisation. Revenue for the UK portfolio however, will be weighed down by the leasing downtime of the remaining vacancy at The Minster Building although it is expected to be fully leased by end 2024.

The aggregate leverage ratio was stable at 42.3%. However, ICR fell marginally to 1.9x in 2Q2024, from 2x a quarter ago. 

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