Suntec REIT has reported a distribution per unit of 2.084 cents for the 3QFY2022 ended Sept 30, down 6.6% y-o-y.
The REIT’s distributable income for the quarter fell by 5.8% y-o-y to $60.0 million.
Gross revenue for the 3QFY2022, however, increased by 15.7% y-o-y to $107.3 million due to higher contributions from Suntec City and The Minster Building in the UK. The Minster Building was acquired on July 28, 2021. The higher gross revenue was offset by the lower occupancy at 177 Pacific Highway and the absence of the surrender fee received in the 3QFY2021, as well as due to the weaker Australian dollar (AUD).
Net property income (NPI) for the quarter increased by 12.1% y-o-y to $77.1 million.
Income from joint ventures (JV) stood 2.4% higher y-o-y to $29.9 million thanks to higher contributions from One Raffles Quay and MBFC Properties, which the REIT owns a 33.3% stake in and offset by the weaker British pound (GBP).
Despite the higher gross revenue and NPI, the REIT’s DPU and distributable income fell due to higher financing costs and higher asset management fees in cash.
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DPU from operations fell 15.6% y-o-y to 1.884 cents while distributable income from operations fell 14.9% y-o-y to $54.2 million.
DPU from capital stood at 0.2 cents while the REIT’s capital distribution stood at $5.8 million.
In Singapore, the REIT’s office portfolio saw higher gross revenue and NPI for the 3QFY2022 due to higher occupancy and rent at Suntec City Office. JV income stood higher thanks to the higher occupancy and rent at One Raffles Quay and MBFC Properties but offset by the higher interest expense at One Raffles Quay.
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Its retail portfolio in Singapore saw gross revenue and NPI grow from the higher occupancy, rent (fixed and gross turnover or GTO) and marcoms revenue at Suntec City Mall, as well as the absence of rental rebates which were provided in the 3QFY2021. The higher JV income in the REIT’s Singapore retail portfolio was due to the higher rent (fixed and GTO) and lower occupancy at Marina Bay Link Mall.
Suntec Convention saw higher gross revenue and NPI from higher revenue from corporate events, conferences, and long-term licences. This was offset by higher fixed costs due to the absence of the Job Support Scheme (JSS) grant and higher facilities expenses, as well as higher operating expenses in line with the higher revenue.
Its Australian portfolio saw gross revenue and NPI fall due to the weaker AUD and the absence of surrender fee received in the 3QFY2021 and lower occupancy at 177 Pacific Highway. This was mitigated by stronger occupancy and rent at 21 Harris Street and 477 Collins Street. JV income for its Australian portfolio fell due to the interest expense from the new loan taken and mitigated by lower rent reliefs for the retail tenants at Southgate.
In the UK, gross revenue and NPI rose due to the full quarter’s contribution from The Minster Building. JV income fell from the weaker GBP and mitigated by the reversal of bad debt.
As at Sept 30, the REIT’s portfolio committed occupancy stood at 95.9% for its retail portfolio and 97.9% for its office portfolio.
The REIT’s weighted average lease expiry (WALE) stood at 2.3 years for its retail portfolio and 4.5 for its office portfolio as at Sept 30.
As at Sept 30, Suntec REIT’s aggregate leverage stood at 43.1%, unchanged from the quarter before.
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Its net asset value (NAV) per unit stood at $2.097 as at Sept 30.
Suntec REIT’s record date is on Nov 4. Unitholders will receive their distributions on Nov 29.
Units in Suntec REIT closed at $1.38 on Oct 25.
