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Suntec Reit Q2 DPU falls 4.6% to 2.361 S cents on lower convention revenue

SUNTEC Real Estate Investment Trust (Suntec Reit) on Friday morning posted a 4.6 per cent drop in its distribution per unit (DPU) to 2.361 Singapore cents for the second quarter ended June 30, down from 2.474 cents in the year-ago period.

Net property income (NPI) shrank 7.2 per cent to S$56.4 million for the quarter, from S$60.7 million a year ago, mostly due to the sinking fund contribution for Suntec City Office upgrading works amounting to S$3.2 million. This had no impact on distributable income.

Gross revenue fell 2.3 per cent year on year to S$88.4 million from S$90.5 million, mainly due to a S$3.9 million or 16.9 per cent drop in revenue from Suntec Singapore. This was partially offset by a S$1.7 million or 3 per cent increase in revenue from Suntec City.

Suntec Singapore’s revenue contribution for Q2 was S$19 million, comprising S$14 million from convention and S$5 million from retail. Its convention revenue slumped 22.7 per cent due to fewer major convention events, although this was partially offset by more corporate events held during the quarter. Retail revenue grew 5.4 per cent from a year ago due to higher occupancy and rental rates.

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Meanwhile, Suntec City’s revenue improved due to an increase in both retail revenue and office revenue. Its retail revenue grew by S$1 million due to positive rental reversions, while office revenue increased by S$0.7 million on the commencement of replacement leases secured in previous quarters.

The Reit’s distributable income edged down by 1.3 per cent to S$65.2 million for Q2.

For the half year to June 30, NPI declined 7.4 per cent from a year ago to S$114.6 million.

Gross revenue for the half year fell 1.7 per cent to S$178.1 million, mainly due to lower revenue from 177 Pacific Highway due to the weakened Australia dollar and from Suntec Singapore.

Distributable income inched down by 0.2 per cent to S$130.5 million.

DPU for the half year was 4.795 Singapore cents, down 2.3 per cent from 4.907 cents in the year-ago period.

Units of Suntec Reit closed flat on Thursday at S$1.95.