3 Things Investors Should Know About Suntec Real Estate Investment Trust’s Property Portfolio

Suntec Real Estate Investment Trust (SGX: T82U) is one of the largest REITs in Singapore and currently has interests in retail malls, convention centres, and offices in Singapore and Australia.

Given that the REIT has different types of properties in its portfolio, I thought it would be useful to take a deeper look at its property portfolio. Here are three useful pieces of information to know:

1. Contributions by segment and asset

The following chart shows a breakdown of Suntec REIT’s net property income (NPI) and income from joint-ventures by property-type and the actual properties for the third quarter of 2017:

Source: Suntec REIT 2017 third quarter earnings presentation

We can see that the bulk of Suntec REIT’s NPI and income from joint-ventures are derived from its office properties (they take up 68%). Furthermore, though Suntec REIT operates in two countries, its properties in Singapore contributed significantly towards the total pie (about 86% of the REIT’s total NPI and income from joint-ventures in the third quarter of 2017); these properties are Suntec City, Suntec Singapore, One Raffles Quay, and MBFC.

2. Office properties lease profile

A REIT’s lease expiry profile is useful to study because it gives us insight on the stability of the REIT’s rental income.

Here’s a chart showing the lease profile for Suntec REIT’s office properties:

Source: Suntec REIT 2017 third quarter earnings presentation

As you can see, Suntec REIT’s office properties have both long-term as well as short-term leases. Having about half of its leases expiring after 2020 provides some income stability for Suntec REIT in the next few years.

3. Retail properties lease profile

After looking at the lease profile of its office properties, let’s now look at the lease profile for Suntec REIT’s retail properties:

Source: Suntec REIT 2017 third quarter earnings presentation

In contrast to Suntec REIT’s office properties, its retail properties have mostly short-term leases. Only 15.7% of the retail properties’ leases expire after 2020.

So, the REIT’s retail properties may experience higher volatility in income as compared to the office properties.

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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.