Singapore's top office REITs NPI down 3.4% to $48.5m in 2017

Average gross revenue also edged down 2% to $65m.

The net property income of Singapore’s four largest office real estate investment trusts (REITS) dipped 3.4% YoY to $48.5m, according to data compiled by investor portal SGX My Gateway. These include CapitaLand Commercial Trust (CCT), Suntec REIT, Keppel REIT and Frasers Commercial Trust which have a combined market cap of $18b. The fifth largest office REIT player OUE Commercial Trust will release its Q1 results by next Thursday.

In a breakdown, Frasers Commercial Trust reported the reported the largest decline in NPI levels which plunged 25.3% to $22.4m. The other three performed more strongly as Keppel REIT’s NPI inched by a marginal 0.6% to $31.2m whilst Suntec REIT rose 1.9% to $63m. CapitaLand Commercial Trust was the outperformer in the pack after NPI levels rose 10.5% YoY to $77.2m.

Average gross revenue followed the downward trend after dipping 2% to $65m.

Also read: CapitaLand Commercial Trust loses 85% of Bugis Village's value

For the first three months of 2018, the four trusts averaged a distribution per unit (DPU) of 2.09 Singapore cents, down an average 4.5% from the year-ago period. Suntec REIT reported the highest DPU of 2.43 Singapore cents amongst the four trusts, up 0.3% YoY, followed by FCT with a DPU of 2.40.

The near-term outlook for the office sector in Singapore is improving as prices of office spaces extended their climb after rising 1.3% in March whilst rents rose 2.6% over the same period.

The island-wide vacancy rate of office space also dipped to 12.5% as occupancy levels improved to 94.1% in Q1 amidst firm demand from technology, media and telecom sectors.

Market rents are poised to grow steadily in the coming years amidst higher committed occupancies in newly completed office buildings and limited new supply in the CBD between 2018 and 2020.