Suntec REIT’s FY15 profits soar 19.6% to $229.2m

Thanks to Suntec City Mall Phase 3’s debut.

Suntec REIT closed their FY15 with a net property income of about $229.2m, which skyrocketed 19.6% from FY14’s $191.6m thanks to the opening of Phase 3 of Suntec City Mall and higher contribution from Suntec Singapore.

According to a report by OCBC, 4Q15 NPI stood at $62.5m, reflecting a 17.9% YoY leap from 4Q14’s $53m.

There were concerns about the significant amount of office leases expiring in 2016 for Suntec REIT’s portfolio, but OCBC notes that progress has been made. Currently, 14.9% (which translates to about 352.6k sqft) of its NLA is due for renewal this year, versus 21.4% as at 30 September 2015.

Further, office leases bagged in the last quarter of 2015 had an average rent of $8.86 per month, sliding from the $9.21 psf per month in committed rents in 3Q15. However, management attributed this to the renewal of bigger spaces.

Looking ahead, management anticipates its office portfolio performance to remain stable, although OCBC sees some downside risks emerging from the muted macroeconomic environment and large incoming supply.

On the retail front, overall committed passing rent for Suntec City Mall seems to have stabilised at $12.04 psf per month, reflecting a flat QoQ, while 98% committed occupancy was achieved.

Nevertheless, Suntec REIT still needs to focus on the 27% of its retail NLA that is expiring in 2016.