Suntec Reit’s Q3 DPU slips 6.6% to S$0.02084 despite higher earnings

SUNTEC Real Estate Investment Trust (Reit)‘s distribution per unit (DPU) fell by 6.6 per cent to S$0.02084 for the quarter ended Sept 30, down from S$0.02232 last year.

Gross revenue for the quarter, however, gained 15.7 per cent to S$107.3 million, up from S$92.7 million a year ago, while net property income also grew 12.1 per cent to S$77.1 million from S$68.8 million in the third quarter of 2021.

This comes on the back of stronger operational performance in occupancy and rent across all its office, retail and convention properties, though these earnings were hampered by higher interest rate and exchange rate pressures.

Distributable income in Q3 slipped 5.8 per cent to S$60 million from S$63.7 million mainly due to higher financing costs and higher asset management fees.

The distribution will be paid out on Nov 29, after books closure on Nov 4.

Chong Kee Hiong, chief executive of the manager, said that given the high interest rate environment, coupled with rising energy cost, the reit’s distribution would be significantly impacted. He, however, added that there were plans in place “to unlock value through asset enhancement initiatives as well as explore opportunities for divestment of mature assets at an opportune time”. 

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The weighted average lease expiry (WALE) for the Reit’s office portfolio stands at 4.5 years, while its retail portfolio has a WALE of 2.3 years.

Both its Singapore offices and retail registered continual growth with higher occupancy and rent, while its Australian and United Kingdom earnings took hits from a weaker currency against the Singapore dollar.

The manager said its Australian properties are expected to remain resilient despite the economic slowdown, while its Singapore assets are expected to recover further as the tourism sector picks up.

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Units of the Reit ended Tuesday down 0.7 per cent or S$0.01 to S$1.38.