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

Suntec REIT may soon find itself funding the acquisition of a larger stake in Southgate Complex, and this could be negative for the REIT’s credit ratings, said Moody’s.

Southgate Complex is a freehold, mixed-use property in Melbourne comprising of two office towers, a three-story retail podium, and a car park with 1,026 lots.

Suntec REIT first announced in early August 2016 that it was acquiring a 50% interest in Southgate Complex for AUD289 million (USD213 million).

The REIT then went on to list SGD300 million (USD221 million) in aggregate principal amount of 1.75% convertible bonds, in part to fund the property’s acquisition.

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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.