SINGAPORE (May 22): Two of Suntec Real Estate Investment Trust’s (Suntec REIT) substantial shareholders have spent around $16.3 million to scoop up sizeable stakes in the REIT earlier this month.
On May 8, substantial unitholder Tang Jialin paid $5.45 million for four million Suntec REIT units, which works out to an average price of $1.3625 per unit. With the purchase, he increased his direct stake to just over 140.9 million units, or 5% of the total. In an earlier filing on April 29, he bought two million units for $2.47 million, which works out to an average price of $1.235 per unit.
On May 6, another substantial unitholder Yang Chanzhen paid $3.74 million for 2.74 million units, which works out to an average price of $1.365. On May 18, she bought another 3.36 million units, at an average of $1.38. On top of their direct stakes, Tang and Yang control 20% interest each in an entity called Senz Holdings, which gives them a deemed stake of nearly 57.1 million units, or 2.03% of Suntec REIT. The recent purchases made by Tang and Yang came at a time when Suntec REIT’s unit price has dropped to its lowest since 2012, amid a broader market selldown of REITs.
According to various filings, Yang is the mother of Gordon Tang, who, together with his wife, Celine Tang, are a power couple in Singapore’s real estate scene. The couple are themselves substantial shareholders of Suntec REIT as well. According to Suntec REIT’s 2019 annual report, Gordon owns some 256.1 million units while Celine holds 214.4 million units.
John Lim raises Suntec REIT stake
Suntec REIT is managed by ARA Trust Management (Suntec), a wholly-owned subsidiary of ARA Asset Management, headed by John Lim. Lim bought more units from the market in recent months too. On Feb 28, Lim bought one million Suntec REIT units from the market at $1.72 each, bringing his direct stake to three million units. Coupled with a separate deemed stake of one million units, Lim now has a total stake of four million Suntec REIT units.
Suntec REIT’s $10-billion portfolio comprises office and retail properties across the region. In Australia, Suntec REIT owns 177 Pacific Highway in Sydney; half of the Southgate Complex and half of Olderfleet; 477 Collins Street in Melbourne; as well as 55 Currie Street in Adelaide. In April, Suntec REIT completed the acquisition of 21 Harris Street, Pyrmont in Sydney.
The REIT’s flagship property is the sprawling Suntec City office and retail development here. It also owns a 60.8% interest in Suntec Singapore Convention & Exhibition Centre; a third of One Raffles Quay; and a third of Marina Bay Financial Towers 1 and 2 and the Marina Bay Link Mall.
Suntec REIT also holds a 30% interest in a development called 9 Penang Road, where the former Park Mall was sited. Later this year, leading private bank UBS will be consolidating its operations in Singapore by leasing some 381,000 sq ft in net lettable area in the development. Besides Suntec REIT’s 30% stake in this development, there are two other parties each holding 35%. One is SGX-listed SingHaiyi, a real estate company while the other is privately-held Haiyi Holdings. Both entities are controlled by the Tangs.
In the most recent 1QFY2020 ended March, Suntec REIT declared a DPU of 1.76 cents, down 27.7% y-o-y. During the quarter, Suntec REIT’s rental income was hit by the fallout of the Covid-19 outbreak as large events such as conferences and trade shows were cancelled. The temporary suspension of operations will be in place until August.
As at March 30, 2020, Suntec REIT’s net asset value per unit was $2.057.
