Suntec REIT reported Thursday its first half net property income rose 23.9 percent on-year to S$112.62 million, mainly on higher revenue from the Suntec City Mall, Olderfleet, 477 Collins Street and 21 Harris Street properties.
“This strong performance was driven by the resilience of the office portfolio in Singapore, Australia and United Kingdom, underpinned by contributions from newly acquired assets and completed developments as well as lower rent assistance for retail tenants and stronger Australian dollar,” the REIT said.
The higher revenue was partially offset by property expenses from the new Australia assets, lower revenue from Suntec Singapore and lower Covid-19 government support in the period, the REIT said in a filing to SGX.
The distribution per unit (DPU) for the January-to-June period was 4.154 Singapore cents, up 26.1 percent on-year, Suntec REIT said.
Chong Kee Hiong, CEO of the REIT’s manager, added: “On the retail front, while we saw steady recovery of mall traffic and tenant sales in Suntec City over January to April, Heightened Alert measures hampered recovery in May and June. However, our efforts in strengthening the mall with strong brands and concepts have helped to cushion the impact on retail revenue with tenant sales being less affected than footfall.”
Suntec City Mall is expected to see slow recovery in mall traffic and tenant sales due to the recent wave of Covid-19 cases in Singapore, with rent reversions likely to be weak as retailers remain cautious, the REIT said. While mall occupancy is expected to rise to around 95 percent by year-end, the gains are likely to be moderated by negative rent reversions over the past few quarters, the REIT added.
Revenue from Suntec Convention is expected to remain “significantly impacted” this year as recovery in the convention business is slow amid weak international business and leisure travel, the REIT said.
In June, Suntec REIT had announced it was divesting a portfolio of Suntec City Office strata units and its 30 percent interest in the 9 Penang Road property in Singapore for S$197 million and S$295.5 million, respectively. The REIT also said it was acquiring The Minster Building, an office development in London for 353 million pounds, or around S$667.2 million.