SINGAPORE – Suntec Real Estate Investment Trust (Reit) recorded a 27.4 per cent decline in distribution per unit (DPU) to 1.737 cents for the first quarter of 2023, from 2.391 cents in the same period a year ago.
This comes despite a 9.6 per cent rise in gross revenue to $108.7 million in Q1 2023, from $99.2 million a year ago. Its net property income for the quarter climbed 2.7 per cent year on year to $76.3 million, from $74.3 million previously.
While Suntec Reit’s financial performance held steady due to higher revenue from Suntec City Office, Suntec City Mall and Suntec Convention, its gains were eroded by higher financing costs, the manager reported on Wednesday.
Distributable income fell by 26.8 per cent year on year to $50.3 million for Q1 2023, from $68.7 million previously.
The dip in DPU and distributable income was also attributed to the weaker Australian dollar and British pound against the Singapore dollar, which affected the trust’s portfolio in Australia and Britain.
Additionally, maintenance fund contributions rose in 2023, and the trust’s joint venture income dropped 26.2 per cent for the quarter due to higher interest rates and greater bad debt provision.
As at end March 2023, net asset value per unit stood at $2.09, down from $2.12 as at end 2022.
The distribution will be paid on May 30, after the record date of May 5.
Suntec Reit’s manager said financing costs are expected to remain high for the year.
“To cushion the impact, we will continue with the distribution of the remaining capital top-up for 2023 to provide some support to unit holders in these tough times,” said Mr Chong Kee Hiong, chief executive of the manager.
While the manager anticipates revenue for the Singapore office portfolio to strengthen on the back of the past 19 quarters of positive rent reversions, its Australia portfolio is expected to be impacted by leasing downtime. Revenue for its British office portfolio is expected to remain resilient, despite economic challenges dampening leasing demand.
Units of Suntec Reit closed down 2 per cent at $1.40 on Wednesday.
THE BUSINESS TIMES
