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Suntec REIT posts DPU of 2.232 cents for 3Q21, up 20.8% y-o-y

Atiqah Mokhtar
Atiqah Mokhtar10/22/2021 08:55 AM GMT+08  • 3 min read
Suntec REIT posts DPU of 2.232 cents for 3Q21, up 20.8% y-o-y
Suntec REIT's manager says higher DPU was driven by recent acquisitions.
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Suntec REIT has reported distribution per unit (DPU) of 2.232 cents for its 3QFY2021 ended September, 20.8% higher y-o-y.

This follows a higher distributable income of $63.7 million recorded for the period, an increase of 22% y-o-y.

In its 3QFY2021 update released on Oct 22, the manager of the REIT attributes the stronger performance to contributions from the two newly acquired assets in London and the completed development of 477 Collins Street, Melbourne, as well as lower rent assistance for retail tenants in the current period.

See: RHB keeps ‘buy’ call on Suntec REIT, but with lower target price of $1.72

In addition, the office portfolio in Singapore, Australia and United Kingdom remained resilient, providing income stability to unitholders.

Gross revenue for 3QFY2021 came in at $92.7 million, up 16.5% y-o-y, while net property income grew 45.5% y-o-y to $68.8 million.

Suntec REIT’s joint venture income grew 28.9% y-o-y to $30.3 million in 3QFY2021.

“To further strengthen Suntec City Mall as the destination of choice for existing customers and to attract new customers, we focused to increase the number of activity-based and experiential concepts to around 35% of the mall’s total leasable area. This, together with more than 25% of the mall dedicated to F&B offerings, will position us well to ride the wave of recovery,” Chong Kee Hiong, CEO of the manager.

Looking ahead, the manager expects revenue growth from the REIT’s Singapore office portfolio, driven by higher occupancy and positive rent reversion on the back of a strong recovery for the economy.

For Suntec City Mall, the manager has “cautious optimism” on the continued recovery of mall traffic and tenant sales given the high vaccination rate achieved for Singapore. However, rent reversion is expected to remain weak as retailers adopt a more prudent approach amidst outstanding uncertainty.

Recovery of the convention business continues to be slow due to travel restrictions in place, thus impact Suntec Convention. While the manager is positive on the increased number of vaccinated travel lanes (VLTs), this is not expected to have a significant impact until more VTLs are introduced, especially in Asia.

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Revenue from the Australia Portfolio is expected to remain resilient underpinned by strong occupancy, annual rent escalations and long lease tenures with minimal lease expiries in 2021 and 2022.

Meanwhile, the REIT’s UK portfolio is expected to sustain stable office revenue supported by high occupancy and long WALE with no lease expiry until 2027.

Units in Suntec REIT closed at $1.51 on Oct 21.

Photo: Bloomberg

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