Suntec Real Estate Investment Trust – Three Things That Investors Should Know

Suntec Real Estate Investment Trust (SGX: T82U) is one of the largest REITs in Singapore. It has interests in retail malls and offices in Singapore and Australia. Its portfolio includes Suntec City, a one-third interest in One Raffles Quay, a commercial building in Sydney and a 25% stake in Southgate Complex in Melbourne, and more.

The REIT has recently reported its second-quarter numbers.

Overall financial performance

Source: Suntec REIT Q2 FY17 Presentation

Suntec has performed well across, with net property income up by 12.8% year-on-year, whilst distributable income was up by 4.3% year-on-year.

“With the enlarged units base which included approximately 95.7 million new units issued on 29 May 20171, the distribution per unit (“DPU”) of 2.493 cents for 2Q 17 was marginally lower than 2Q 16 DPU of 2.501 cents.”

Occupancy rate:

Occupancy rate is an important measure, since this gauges the strength of the market demand for a REIT’s property.

Overall, the office and retail occupancy rates stood at 98.7% and 99%, respectively.

For the office segment, the Singapore’s portfolio occupancy rate declined marginally from 98.9% last year to 98.8%. Similarly, the Australia’s portfolio occupancy rate stood at 98.1% at the end of this quarter.

For the retail segment, Singapore’s properties achieved an occupancy rate of 99.3%, up from 97.7% a year ago, whilst the Australia’s properties achieved an occupancy rate of 88.2% at the end of this quarter.

Singapore Office Industry:

Source: Source: Suntec REIT Q2 FY17 Presentation

We can see that Suntec REIT’s Singapore office portfolio has consistently achieved higher occupancy rates as compare to the overall industry.

Nevertheless, the REIT expects the Singapore office market to remain under pressure, as more properties are expected to come on stream.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.