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Suntec Reit Q3 DPU drops 5.1% to 2.365 S cents on enlarged unit base

SUNTEC Reit on Wednesday posted a 5.1 per cent drop in distribution per unit (DPU) to 2.365 Singapore cents for its third quarter ended Sept 30, from 2.491 cents a year ago.

This was mainly due to an enlarged unit base, after units from a S$200 million private placement were issued on May 6.

The distribution will be paid out on Nov 28, after books closure on Nov 1.

Distributable income inched down 0.4 per cent year on year to S$66.2 million for Q3 as a result of lower capital distribution.

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Meanwhile, distributable income from operations rose 5.7 per cent to S$59.7 million from the year-ago quarter. This was mainly driven by the continued strong performance of Suntec City, higher contribution from MBFC Properties, better performance of Southgate Complex and contribution from 55 Currie Street which was acquired in September.

These were partially offset by higher financing costs, said Chong Kee Hiong, chief executive of Suntec Reit’s manager on Wednesday morning.

Gross revenue was up 3.5 per cent on the year to S$91.9 million for the quarter from S$88.8 million, thanks largely to higher retail and office revenue from Suntec City. This was partially offset by lower revenue from Suntec Convention.

Net property income grew 3.2 per cent to S$58.4 million in Q3, from S$56.5 million a year ago.

The overall committed occupancy for the Singapore office portfolio stood at 99 per cent as at Sept 30. The manager expects the Singapore office portfolio, in particular Suntec City Office which has achieved six straight quarters of positive rent reversions, to continue to perform well.

The upcoming 10-storey commercial building 9 Penang Road is on track to complete by the end of 2019. Suntec Reit has a 30 per cent interest in the development, with Haiyi Holdings and SingHaiyi Group holding 35 per cent each. The building’s office component has been 100 per cent pre-leased to UBS, with target occupation in the second half of 2020. The retail component will be predominantly occupied by food and beverage outlets, and negotiations are in progress.

As for Suntec City’s retail performance, there have been nine consecutive quarters of positive rent reversions, said Mr Chong. The operation indicators for the mall remained positive with footfall and tenants’ sales growing 3.8 per cent and 0.8 per cent year on year respectively.

In Australia, overall committed occupancy for the office portfolio was 97.8 per cent as at Sept 30.

The new 40-storey office tower Olderfleet, 477 Collins Street in Melbourne, reached a milestone with the topping out of the building structure on July 31. Tenants fit-out works are in progress and practical completion is expected by mid-2020. Including the heads of agreement signed, the pre-committed occupancy for the development has increased to 92 per cent.

Units of Suntec Reit were flat at S$1.87 as at 9.34am on Wednesday, after the results were announced.