Suntec Reit posts 26.1% rise H1 2021 DPU amid resilient office portfolio

SUNTEC real estate investment trust T82U (Reit)'s distribution per unit (DPU) rose 26.1 per cent to 4.154 Singapore cents for the six-month period ended June 30, 2021, up from 3.293 cents for the same period a year ago.

DPU for the quarter ended June 30, 2021 was up 37.6 per cent at 2.109 cents, from 1.533 cents a year earlier.

Gross revenue was up 11.6 per cent to S$166.8 million for the six-month period, from S$149.4 million a year ago.

This was due to its resilient office portfolio in Singapore, Australia and the United Kingdom, the Reit manager ARA Trust Management (Suntec) said in a bourse filing on Thursday.

The manager also said contributions from newly acquired assets and completed developments, as well as lower rent assistance for its retail tenants and a stronger Australian dollar boosted its results.

Net property income grew 23.9 per cent on the year to S$112.6 million for the half year, from S$90.9 million.

Distributable income rose 27.3 per cent year on year to S$118.2 million, from S$92.8 million.

The distribution will be paid out on Aug 27, 2021, after books closure on July 30, 2021.

The Reit manager expects revenue of its Singapore office portfolio to be stable due to positive rent reversions and robust occupancy in the mid-90 per cent range.

It said rent reversion at its Suntec City Mall will likely be weak in the next few quarters amid slow mall traffic and tenant sales recovery due to the recent spike in Covid-19 cases, but still expects mall occupancy to remain on track to hit around 95 per cent by the end of the year.

The manager also noted that income contribution for its convention centre business will remain significantly impacted for the year due to weak international business and leisure travel.

For the Australian portfolio, the Reit manager said revenue will likely remain resilient, underpinned by strong occupancy, annual rent escalations and long lease tenures with minimal lease expiries in 2021 and 2022.

In the UK, it expects office revenue to be stable, supported by occupancy and long weighted average lease expiry, although it will still provide rent rebates and deferments to its pandemic-hit retail tenants at Nova Properties.

In June, Suntec Reit's manager announced the divestments of a portfolio of strata units at Suntec City Office and of its 30 per cent stake in 9 Penang Road for S$197 million and S$295.5 million, respectively.

It also announced the acquisition of a Grade A office development with ancillary retail, The Minster Building, in London for an agreed property value of £353 million (S$667.2 million).

Units of Suntec Reit closed at S$1.49 on Thursday, up S$0.02 or 1.4 per cent.