Suntec City Offices Nearly Fully Occupied
SINGAPORE – The occupancy level of Suntec REIT’s Singapore office portfolio edged up by 1.6 percentage points to 99.4 percent in Q3 2022, with higher occupancies recorded across all of its Singapore office properties, reported The Edge on Tuesday (1 November, SGT).
Comparatively, the committed occupancy of its entire office portfolio, including assets in other countries, stood at 97.9 percent during the third quarter of the year.
In particular, the occupancy rate of Suntec City’s office component in Singapore reached 99.6 percent, with office rental reversion increasing by 5.9 percent in Q3 2022.
“Despite the challenges of COVID-19, the Singapore Office portfolio remains strong. While macro headwinds and challenges may dampen business sentiments, healthy occupancy and rent will be underpinned by the tight office supply,” said Chong Kee Hiong, CEO of Suntec REIT’s Manager.
“Revenue contribution for the Singapore office portfolio is expected to strengthen further,” he added.
In the third quarter, gross revenue from Suntec City’s office component inched up by 1.2 percent year-on-year to S$34 million, while the net property income (NPI) from the said office property grew by 3.8 percent S$27.1 million.
At the same time, income from jointly-owned office assets in Singapore – namely One Raffles Quay, as well as Marina Bay Financial Centre (MBFC) Tower 1 & 2 – climbed by 7.2 percent to S$19.3 million. Notably, Suntec REIT owns a 33 percent stake in each of the aforementioned office properties.
While the performance of Suntec REIT’s Singapore office portfolio remains robust, UOB Kay Hian analyst Jonathan Koh pointed out that the trust’s overseas office portfolio has been impacted by adverse movement in exchange rates.
For instance, NPI from its Australian office assets fell by 17.2 percent year-on-year to S$19.3 million in the third quarter due to weaker occupancy, coupled with a 6.3 percent depreciation of the Australian dollar against the Singapore dollar.
In the United Kingdom, contributions from the Minster Building surged by 59.1 percent year-on-year in British pounds, but converted to the local currency here, it only translated to a growth of 36.6 percent due to a “massive depreciation of the British pound of 12.3 percent against the Singapore dollar.”