Suntec – BT

Suntec Reit Q4 DPU rises 7%, beating forecast

Full-year DPU up 0.7%; gross revenue jumps 30.4%

SUNTEC Real Estate Investment Trust (Suntec Reit) reported a distribution per unit (DPU) of 2.479 cents for the fourth quarter ended Dec 31, 2011, up 7 per cent year on year, and 19.9 per cent higher than its forecast.

This brings its DPU for 2011 to 9.932 cents, a 0.7 per cent increase from 2010 and beating forecast by 14.2 per cent.

Income available for distribution for the quarter exceeded its forecast by 20.7 per cent and stood at $55.3 million – a 23.1 per cent increase from the corresponding period a year ago.

For the year, Suntec Reit posted a record-high income available for distribution of $220.7 million, 20.9 per cent higher than 2010’s $182.5 million.

Said Yeo See Kiat, chief executive officer of ARA Trust Management (Suntec) Ltd, Suntec Reit’s manager: ‘I am happy to report that we have delivered a record high distribution income for FY 2011, despite the negative rental reversions in our office portfolio during the year. This was achieved on the back of strong performance from Marina Bay Financial Centre properties as well as prudent capital management that led to greater interest savings.’

Gross revenue for the quarter was $80 million, an increase of 30.4 per cent over Q4 2010, and 33.5 per cent higher than its forecast. This was mainly due to the consolidation of Suntec Singapore’s revenue following the acquisition of an additional 40.8 per cent effective interest in August 2011.

Excluding Suntec Singapore’s revenue contribution of $20 million, however, the gross revenue for Q4 2011 was $60.1 million – 2.1 per cent lower than the same period the year before, due to a decline in retail and office revenues.

Gross revenue for the year stood at $270.3 million, up 8.3 per cent from 2010’s $249.5 million.

Net property income for the quarter rose 10.1 per cent year on year to $52 million, while for the full year, this was up 0.2 per cent at $193.4 million.

As at Dec 31, 2011, the overall committed occupancy for Suntec Reit’s office and retail portfolio stood at 99.2 per cent and 97.5 per cent respectively.

Commenting on Suntec Reit’s office portfolio, Mr Yeo said: ‘In view of the current euro crisis and the uncertain economic outlook in 2012, we stepped up our proactive leasing strategy and forward renewed more than 233,000 sq ft of our leases due to expire in 2012.’

‘With a balance of approximately 10 per cent of our leases due to expire in 2012, we are well positioned to meet the challenges ahead,’ he added.

Looking ahead, Suntec Reit’s manager said that an estimated 1.3 million sq ft of office space is expected to enter the market this year – 50 per cent lower than the new supply in 2011.

‘However, overall Grade A rents and demand are expected to be muted in 2012, as companies remain conservative and hold off possible expansion plans or reconfigure offices to sub-let excess space,’ it added.

Suntec Reit units closed half a cent lower yesterday at $1.145.