Saturday, January 22, 2011

Suntec Reit fourth-quarter DPU slides

SUNTEC Real Estate Investment Trust (Suntec Reit) ended a lacklustre year with a 19.8 per cent year-on-year drop in its payout to unitholders for the fourth quarter - impacted by a higher interest expense from its bank loans and convertible bonds.

ARA Trust Management (Suntec) Ltd, the manager of Suntec Reit, said yesterday after the market closed that distribution per unit (DPU) fell to 2.316 cents from 2.886 cents a year before. Income available for distribution slipped 6 per cent to $44.9 million.

Gross revenue dipped 0.6 per cent to $61.4 million on a drop in revenue from both its retail and office properties. Earnings per unit, however, stood at 7.708 cents compared to a loss of 12.051 cents a year ago. This was helped by a net surplus from the revaluation of its investment properties.

ARA Trust Management said in a statement that it expects ongoing challenges within the retail sector in 2011, notwithstanding signs of a recovery in retail rents. Still, it remained upbeat, saying that: 'Nonetheless, Suntec Reit's strong 2.4 million sq feet office portfolio and 1.1 million sq ft retail portfolio strategically located in the heart of Singapore's central business district is well-positioned to meet the challenges.'

Gross retail revenue for the quarter was 0.9 per cent lower than a year ago at $32.7 million, mainly because of lower rental income from its Chijmes property, while gross office revenue was $28.7 million, 0.2 per cent lower than the year-ago period.

Overall, net property income was little changed from a year ago at $47.2 million for the October-December period.

One bright spot was overall committed occupancy for the Reit's office portfolio, which stood at 98.8 per cent as at Dec 31, 2010. At the end of 2009, the committed occupancy for its office portfolio was 96.8 per cent. In particular, its jointly controlled entity, One Raffles Quay, achieved full committed occupancy, while the committed occupancy for the Marina Bay Financial Centre properties stood at 96.5 per cent at the end of 2010.

For the retail component, committed occupancy was 98 per cent, as compared to 98.1 per cent at end 2009.

Said ARA Trust Management's chief executive Yeo See Kiat: 'Committed occupancy for Suntec City office has recorded six straight quarters of growth. With the steady recovery of the Singapore office market and our strong committed occupancy, we expect the negative rental reversions of our office portfolio to bottom out by end 2011.'

For the full year, DPU fell 15.8 per cent to 9.859 cents. Gross sales were down 1.4 per cent to $249.5 million. EPU was 20.337 cents, as compared with a loss of 6.867 cents per unit in FY2009.

Suntec Reit's shares closed up 1.9 per cent at $1.58.

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