Suntec REIT Sees Higher Income From Singapore Office Portfolio
SINGAPORE – Suntec REIT’s net property income (NPI) from its Singapore office properties increased by 9.5 percent to S$53 million in H1 2022 compared to the same period last year, while gross revenue edged up by 2.2 percent to S$66.4 million, according to local bourse filings published on Wednesday morning (27 July, SGT).
The higher NPI and gross revenue is attributed to higher occupancy and rent at Suntec City Office and the absence of a sinking fund at Suntec City Office. However, this was offset by divestment of strata office units at Suntec City Office.
Over the same period, Suntec REIT’s joint venture (JV) income from its partly owned office properties in Singapore climbed 12.3 percent year-on-year to S$41 million. Notably, the trust owns 33.3 percent of One Raffles Quay and MBFC Tower 1 & 2.
The higher JV income is due to absence of performance fees paid to the fund manager for 9 Penang Road4 in H1 2021, as the commercial property was divested on 16 June 2021. Another positive reason is the higher rent from One Raffles Quay, but the higher office rent was offset by the absence of one-off compensation received for MBFC Tower 1 & 2 during the first half of last year.
“Revenue contribution from the Singapore Office portfolio is expected to remain strong, driven by tight vacancy and limited supply despite global headwinds weighing on economic growth,” stated the manager of Suntec REIT in the filings.
“Continual demand from Technology, Media and Telecommunications and Financial Services sectors will continue to support robust occupancy and healthy positive rent reversion for the Singapore office portfolio,” it added.
Moreover, Suntec REIT revealed that the committed occupancy for its global office portfolio stood at 97 percent in H1 2022, while the weighted average lease expiry (WALE) of such assets was at 4.5 years.
“The office portfolio in Singapore, Australia and United Kingdom remained resilient, with the Singapore office portfolio achieving positive rent reversion for 16 quarters,” added Chong Kee Hiong, CEO of Suntec REIT’s manager.