SUNTEC REIT Sees Solid Office Occupancy In FY2022
SINGAPORE – The overall occupancy of SUNTEC REIT’s office properties in the city-state stood at 98.5 percent as at the end of December 2022, surpassing Singapore’s core CBD office occupancy of 94.7 percent based on CBRE data, according to a Singapore Exchange (SGX) filing published on Friday morning (20 January, SGT).
In particular, the office occupancy at Suntec City Office reached 99.1 percent, while that in One Raffles Quay was fully occupied. In Marina Bay Financial Centre (MBFC) Tower 1 & 2, the office occupancy was at 94.1 percent.
The weighted average lease expiry (WALE) of the trust’s Singapore office assets was at 2.7 years, down from SUNTEC REIT’s global office WALE of 4.5 years.
In Singapore, the real estate investment trust (REIT) rented out a total of 631,700 sq ft of office space in FY2022. Of this, 39 percent were new leases, while 61 percent were renewals.
By sector, the Technology, Media and Telecommunications (TMT) industry accounted for the biggest share of new office tenants in terms of space at 24 percent, followed by Banking, Insurance and Financial Services (22 percent), as well as Shipping and Freight Forwarding (15 percent).
As for SUNTEC REIT’s office rental reversion, it averaged positive 6.8 percent in FY2022 – 5.3 percent in Q1, 5.7 percent in Q2, 5.9 percent in Q3, and 10.6 percent in Q4.
Meanwhile, the net property income (NPI) derived from the trust’s Singapore office portfolio increased by 7 percent to S$54.7 million in H2 2022 compared to S$51.1 million during the same period in the preceding year.
At the same time, gross revenue from SUNTEC REIT’s Singapore office portfolio rose by 4.6 percent to 68.7 percent compared with S$65.7 million in H2 2021. The higher NPI and gross revenue is due to the better occupancy and rent at Suntec City Office.
As for income from joint venture office properties in Singapore – namely One Raffles Quay and MBFC Tower 1 & 2, in which the trust owns a one-third stake in each – it edged up by 1.4 percent from S$36.7 million to S$37.2 million.
The slight improvement in JV income is thanks to the higher occupancy and rent at MBFC and One Raffles Quay, but it was offset by heftier interest expense at One Raffles Quay.
By sector, SUNTEC REIT’s office assets contributed 73 percent of its income. Retail units only account for 23 percent, while its convention space generated merely 4 percent.
Furthermore, office assets made up the lion’s share of the trust’s assets under management (AUM) at 78 percent, followed by retail (20 percent) and convention space (2 percent).