Suntec REIT net property income jumps by 20.3% to $166.7m

Pulled by hefty contributions from Suntec City Phase 3.

The property firm exceeded expectations and reaped the benefits of its newly opened phase 3 of Suntec City mall, as it reported a 20.4% increase in gross revenue, climbing up to $86.1m.

According to OCBC, a better performance from Suntec Singapore also contributed to the growth.

“DPU grew 8.3% YoY to 2.522 S cents, of which 0.182 S cents per unit (S$4.6m) was contributed by distribution from capital,” OCBC said.

Meanwhile, leasing challenges remain in the horizon for Suntec REIT.

“The larger available space has coincided with the soft leasing environment, making rental negotiations more challenging, in our view. Overall committed passing rent for Suntec City stands at S$12.03 psf per month (on a stabilised basis), which was a dip from the previous quarters (2Q15: S$12.12 psf per month; 1Q15: S$12.15 psf per month; 4Q14: S$12.27 psf per month),” OCBC said.

OCBC also warns that though the REIT has minimal risks for the remainder of FY15 for its office and retail portfolio, the situation is doomed to get hazier in 2016.
“Management has to deal with lease expiries totalling 21.4% and 27.7% of its total office and retail NLA, respectively,” OCBC said.