Suntec Real Estate Investment Trust’s (Suntec Reit) distribution per unit (DPU) slid 13.9 per cent to S$0.0315 for the second half of 2024 ended Dec 31, from S$0.03659 in the corresponding year-ago period.
Capital distribution was absent in FY2024, its manager said in a bourse filing on Thursday (Jan 23).
Suntec Reit’s distribution in FY2023 included a capital distribution component – amounting to S$23 million – relating to the divestment of Park Mall in 2015. This contributed S$11.5 million to distributable income in H2 FY2023, bringing distributable income to S$106.3 million.
Thus, distributable income in H2 FY2024 – which came only from operations – slipped 13.2 per cent to S$92.2 million from the year-ago period. Comparing distributable income only from operations across both second halves, H2 2024 logged a fall of 2.7 per cent to S$92.2 million, from S$94.8 million in FY2023.
Revenue fell by a marginal 0.7 per cent to S$236.7 million for the half-year period, from S$238.4 million in H2 FY2023. Net property income (NPI) was largely flat, at S$159.8 million.
A distribution of S$0.0157 per unit for the period from Oct 1 to Dec 31, 2024, will be paid on or about Feb 28, 2025, after books closure on Feb 4.
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Meanwhile, for the full year, DPU was down 13.2 per cent to S$0.06192, from S$.07135.
Revenue edged up 0.2 per cent year on year to S$463.6 million, from S$462.7 million. NPI decreased by 0.8 per cent from the year before, falling to S$310.8 million from S$313.2 million.
Distributable income shrank 12.5 per cent to S$180.9 million in FY2024, from S$206.8 million in FY2023.
Operational performance of the Reit’s Singapore office and retail portfolios, as well as the Sydney properties, improved in FY2024, the manager said. In Singapore, it achieved strong rental reversions across all quarters of the year.
The manager flagged that it divested S$58.3 million of strata units at Suntec City Office Towers, with proceeds used to pare down debts.
It added: “The transactions were accretive to the Reit’s earnings as the achieved divestment yield were lower than current borrowing costs.”
Meanwhile, the Melbourne properties “remained stable”. But it added: “Distributable income was impacted by higher financing costs and lower contributions arising from vacancies at 55 Currie Street, Adelaide and The Minster Building, London.”
The manager expects modest positive rental reversions – from 1 to 5 per cent – for its Singapore office portfolio. At Suntec City Mall, it anticipates committed occupancy to remain high at more than 95 per cent, while positive rent reversion is expected to be in the range of 10 to 15 per cent.
It believes that the performance of Suntec Convention will be largely stable, “as the composition of event types is likely to remain largely unchanged”.
For Australia, however, vacancies in the office market for the Melbourne and Adelaide central business districts are expected to remain elevated, it said.
It noted that demand in Adelaide remains weak, but expects the healthy occupancies of the Sydney and Melbourne properties to support its Australian portfolio’s performance, keeping it stable.
Occupancy and rental growth in Central London is expected to continue to improve, supported by tight supply and increase in office utilisation, the manager added, citing JLL UK Research.
Units of Suntec Reit closed flat at S$1.21 on Thursday, before the announcement.
