ARA Trust Management, the manager of Suntec REIT, has reported distribution per unit (DPU) of 4.109 cents for the 2HFY2020 ended December, 12.8% lower than DPU of 4.712 cents a year ago, due to the absence of capital distribution for the period.
“The second half and fourth quarter performance continue to be supported by the resilience of our office portfolio in Singapore and Australia. There are also encouraging signs of recovery in our retail business in 4QFY2020 as tenant sales recovery at Suntec City Mall has been stronger than improvement in footfall,” says Chong Kee Hiong, CEO of the manager.
“As a result, there will be a full distribution of the 2HFY2020 distributable income. We will also distribute the full $10.3 million distributable income that was retained in 1HFY2020. Total DPU for 2HFY2020 will be 4.109 cents,” he adds.
This brings DPU for the FY2020 to 7.402 cents, 22.1% lower than DPU of 9.507 cents for FY2019 due to the lower distributable income from operations and the absence of capital distribution.
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Gross revenue for 2HFY2020 fell 12.0% y-o-y to $165.9 million while gross revenue for FY2020 fell 14.0% y-o-y to $315.4 million. The decrease was due to lower revenue from Suntec City and Suntec Singapore, and partially offset by contributions from 55 Currie Street and 21 Harris Street in Australia.
Revenue for Suntec City for the FY2020 declined 12.3% y-o-y due to the decrease in retail revenue owing to the rent assistance rendered to tenants for about two months.
2QFY2020 net property income (NPI) fell 10.4% y-o-y to $109.0 million mainly due to the rent assistance granted to Suntec City’s retail tenants and losses incurred at Suntec Singapore.
Similarly, NPI for FY2020 fell 15.4% y-o-y to $199.9 million due to the same reasons.
Distributable income for 2HFY2020 from operations stood 11.0% lower y-o-y at $106.1 million due to the negative impact on the REIT’s retail and convention businesses brought about by the Covid-19 pandemic.
The decrease was also due to the rental assistance granted to retail tenants at Suntec City Mall, Marina Bay Link Mall and Southgate Complex, as well as the absence of income contribution from Suntec Convention and one-off compensation from MBFC Properties in 2HFY2019.
This was mitigated by the better performance and contributions from the REIT’s Australia office portfolio, stronger performance of the Suntec City Office and One Raffles Quay, as well as lower financing costs.
Distributable income for the FY2020 came in 11.6% lower y-o-y at $209.2 million.
As at Dec 31, 2020, the REIT’s assets under management (AUM) grew 12.8% y-o-y to $11.5 billion due to the completed development at 477 Collins Street in Melbourne as well as its newly acquired properties in Sydney and in London.
Suntec REIT continues to be Singapore-centric with 76% of the AUM in Singapore while the remaining 17% and 7% are in Australia and the UK respectively.
As at Dec 31, 2020, the REIT’s overall committed occupancy in Singapore and Australia are at 90.2% and 94.0% respectively.
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Its UK properties, Southgate Retail and Nova registered occupancies of 91.7% and 100% respectively.
Weighted average lease expiry (WALE) for the REIT’s Singapore portfolio is at 2.97 years, and 6.80 years for both the Australian and UK portfolios.
Looking ahead, the REIT expects stable revenue on strong rent reversions from the past quarters. Rent reversion in Singapore is expected to be positive in 2021.
Its Australia portfolio is expected to remain resilient on strong occupancy rates and long lease tenures.
In UK, economic conditions remain “challenging” due to the nationwide lockdown in early 2021.
As at 9.18am, units in Suntec REIT are trading 1 cent higher or 0.6% up at $1.55.
