The manager of Suntec REIT has reported a distribution per unit (DPU) of 2.391 cents for the 1QFY2022 ended March, 16.9% higher y-o-y.
The REIT’s distributable income stood 18.2% y-o-y higher at $68.7 million.
According to the REIT manager, the higher DPU was due to an 8.3% y-o-y increase in distributable income from operations and a capital distribution of $5.8 million.
During the quarter, capital distribution that was put on hold due to Covid-19, has resumed on the back of an improved outlook across the REIT’s portfolio.
The stronger operating performance was mainly due to new contribution from The Minster Building in London as well as higher income from Suntec City Office and Suntec City Mall.
Gross revenue for the 1QFY2022 increased by 13.9% y-o-y to $99.2 million.
See also: Trump wins Republican nomination, setting up rematch with Biden
Net property income (NPI) for the quarter increased by 24.9% y-o-y to $74.3 million.
Its joint venture (JV) income also increased by 10.0% y-o-y to $30.9 million.
As at March 31, the REIT reported a portfolio occupancy of 96.7% for its overall office portfolio and 95.2% for its overall retail portfolio.
Its weighted average lease expiry (WALE) for its office and retail portfolios stood at 4.7 years and 2.2 years respectively as at March 31.
Unitholders will receive their distributions on May 30, with the ex-date being May 5.
In its outlook statement, the REIT manager is buoyant on the prospects of its Singapore office portfolio, as it is poised to benefit from the positive market outlook, tight vacancy and limited supply.
“While positive rent reversion is expected to be moderated due to high expiry rents, the office income is expected to remain strong driven by the cumulative positive rent reversion achieved in the past 15 quarters,” says the manager via its results release on April 26.
Suntec City Mall and Suntec Convention are also likely to benefit from the recent major easing of restrictions, although income contribution from the latter remains “significantly impacted” in 2022.
The REIT’s Australia portfolio is expected to see stable revenue with its strong occupancy, annual rent escalations and long lease tenures.
Similarly, revenue from its UK portfolio is expected to remain stable underpinned by the high occupancy and longer lease tenures.
For more stories about where money flows, click here for Capital Section
“The office portfolio in Singapore, Australia and United Kingdom remained resilient, with the Singapore office portfolio achieving positive rent reversion for 15 quarters,” says Chong Kee Hiong, CEO of the manager.
He adds, “We are now more optimistic about the continued recovery of the retail and convention businesses compared to a year ago. At Suntec City Mall, occupancy improved to 96%, as more food and beverage (F&B) and activity-based tenants were introduced to attract shoppers. Suntec Convention losses had narrowed with higher revenue and strict cost control.”
“Suntec REIT unitholders will continue to benefit from the income resilience of its portfolio, enhanced by its geographical diversification with quality office assets in Australia and United Kingdom. The manager will also continue to strengthen its balance sheet through active capital and portfolio management,” he continues.
Units in Suntec REIT closed at $1.83 on April 25.
