Suntec REIT's Southgate Complex in Melbourne, Australia. (Photo: Dexus Property Group)

Retail and office landlord Suntec REIT has reported a DPU of 2.596 Singapore cents for its 4Q FY2016, 5.6% lower year-on-year than the 2.750 cents recorded in the corresponding period of 2015.

Correspondingly distributable income of SGD66.1 million (USD46.5 million) for the period came in 4.9% lower compared to 4Q 2015.

“Notwithstanding the fourth quarter year-on-year dip in distributable income which was mainly due to the divestment of Park Mall, we are pleased to report that for the financial year ended 2016, we have maintained the distributable income and DPU at similar levels as FY 2015”, said Chan Kok Leong, CEO if the REIT’s manager, in reference to Suntec REIT’s full-year DPU of 10 cents for FY 2016.

The REIT’s committed occupancy for its Singapore office portfolio was at 99.3% while the committed occupancy for its Australian office portfolio was 95.9%.

Meanwhile for its Singapore retail portfolio, the overall committed occupancy as at 31 December 2016 was 97.7%, and in Australia, 89.0%.

“Despite the soft retail market, Suntec City Mall continues to benefit from the completed asset enhancement works, excellent connectivity with direct connections to both Promenade and Esplanade MRT Stations, and with ample car parking facilities of over 3,000 lots”, said Chan.

The REIT’s gearing was at 36.4% as at 31 December 2016 with an all-in financing cost of 2.28% per annum.

Chan pointed to the development of a new Grade A commercial building at 9 Penang Road as a factor that may bolster earnings in the future.

“Development works commenced in December 2016 and the building is scheduled to complete by end 2019 when the new office supply is expected to be limited”, he added.

Units of Suntec REIT are currently listed on the Singapore Exchange at SGD1.685.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.