Suntec REIT shows signs of improvement despite headwinds in the office market

Occupancy at Suntec City Office rose to 98.9%.

Suntec REIT was able to weather the storm in the Singapore office market as the occupancy at Suntec City Office rose to 98.9% from 98.1% at end 2Q16, notes DBS Vickers Securities.

The research firm added that Suntec REIT was able to buck the q-o-q decline in overall market rents, with signing rents at Suntec City Office rising 2.3% q-o-q increase to S$8.78psf.

"The better performance was attributed to Suntec City Office’s strong offerings in terms of ease of access (two MRT stations) and wide range of amenities at the nearby Suntec City Mall," said DBS Vickers Securities.

In terms of overall office portfolio, the majority of leases in 2016 have been renewed, with only 0.6% up for renewal for the remainder of 2016, down from 14.9% earlier this year.

For FY17, 12.2% of leases are set to expire.