Suntec Reit posts 31.3% drop in H1 DPU to 3.293 S cents

SUNTEC Real Estate Investment Trust (Suntec Reit)'s distribution per unit (DPU) fell by 31.3 per cent to 3.293 Singapore cents for the six months ended June 30, from 4.795 cents a year ago.

This comprises a DPU of 1.76 cents for the three months ended March 31 and a DPU of 1.533 cents for the three months ended June 30, the real estate investment trust's (Reit) manager said in a regulatory filing on Thursday.

Gross revenue was down 16.1 per cent to S$149.4 million for the half year, from S$178.1 million a year ago. This was mainly due to a drop of S$14.9 million and S$22.7 million in revenue from Suntec City and Suntec Singapore respectively, and lower revenue from 177 Pacific Highway, a commercial building in Sydney in which Suntec Reit holds a 100 per cent stake.

Suntec Reit owns Suntec City, which is an integrated commercial development comprising 813,753 square feet (sq ft) of net lettable area in Suntec City Mall, certain office units in Suntec Towers One, Two and Three, as well as the whole of Suntec Towers Four and Five.

Meanwhile, Suntec Singapore comprises Suntec Singapore Convention & Exhibition Centre and 141,959 sq ft of net lettable area in Suntec City Mall. Suntec Reit wholly owns Suntec City Mall, and a 60.8 per cent effective interest in the convention centre.

The Reit's manager added that the drop in revenue was partially offset by contributions from 21 Harris, a freehold property in Sydney, and 55 Currie, a freehold office building in Adelaide, which were respectively acquired on April 6, 2020, and Sept 10, 2019. Suntec Reit owns 100 per cent interest in both properties.

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Net property income fell 20.6 per cent on the year to S$91 million for the quarter, from S$114.6 million.

Distributable income declined 21 per cent year on year to S$103.1 million, from S$130.5 million.

The distribution of 1.533 cents per unit for the three months ended June 30 will be paid on or about Aug 27, after books closure on Aug 3. The distribution of 1.760 cents per unit for the three months ended March 31 was earlier paid on May 28.

The chief executive officer of the Reit's manager, Chong Kee Hiong, said that the manager had retained 10 per cent of the distributable income from operations and held back its capital distribution in H1 to "maintain financial flexibility in view of the evolving Covid-19 situation".

"This is to achieve balance between providing a reasonable return to unitholders, building cash reserve as well as assisting our tenants to weather this period," he added.

Units of Suntec Reit were trading flat at S$1.42 as at 9.10am on Thursday, after the results were announced.