This morning, Suntec REIT (SGX:T82U), with properties in Singapore, Australia, as well as in the United Kingdom, released its financial results for the first half of the financial year 2021 ended 30 June 2021.

As a unitholder of the retail and office REIT, I have studied the documents posted and in this post, you will find a summary of its latest financial results, portfolio occupancy and debt profile, its distribution per unit to unitholders, along with my thoughts about its latest set of statistics and outlook for the second half of FY2021 ahead.

Let’s begin…

Financial Performance (1H FY2020 vs. 1H FY2021, and Q2 FY2020 vs. Q2 FY2021)

1H FY2020 vs. 1H FY2021:

1H FY20201H FY2021% Variance
Gross Revenue
Property Operating
Expenses (S$’mil)
Net Property
Income (S$’mil)
Distributable Income
to Unitholders

On a year-on-year (y-o-y) basis, the REIT’s results is an improved one – the 11.6% increase in its gross revenue can be attributed to the contribution from the completed Olderfleet, 477 Collins Street from 01 August 2020, contribution from 21 Harris Street which was acquired on 06 April 2020, higher revenue from 177 Pacific Highway as a result of a stronger Australian Dollar (against the Singapore Dollar), as well as higher revenue from Suntec City Mall (mainly due to higher retail revenue arising from lower rent assistance granted to retail tenants, along with a higher gross turnover rent.)

As a result of an increase in the REIT’s gross revenue, its net property income also grew by 23.9% in the same time period.

Finally, its distributable income to unitholders also went up by 27.3% on a y-o-y basis to S$118.2m mainly due to higher distributable income from operations, and that there was a S$10.3m of distribution retained in 1H FY2020.

Q2 FY2020 vs. Q2 FY2021:

I understand that in the REIT’s financial reports, they did not provide the financial figures for the second quarter – as such, I’ve done my own calculations based on the figures they’ve provided when they published their first quarter results, along with figures for the first half of the financial year, and you can find the numbers for the second quarter in the table below:

Q2 FY2020Q2 FY2021% Variance
Gross Revenue
Property Operating
Expenses (S$’mil)
Net Property
Income (S$’mil)
Distributable Income
to Unitholders

My Observations: Remember in the second quarter of 2020, Singapore is in the ‘circuit breaker’ phase (which happened between 07 April and 01 June 2020), where only retailers providing essential services were allowed to continue operations. This is starkly different in the current quarter under review, where most retailers had since resumed normal operations (except for a period between 16 May and 13 June 2021 where country was in ‘Phase 2 (Heightened Alert)’ where dining-in was not allowed, along with a tighter restriction in the number of visitor footfall to malls; however, retailers were allowed to resume their normal business operations, amid with stricter safe distancing measures) – hence, there’s no surprise there that on a quarter-on-quarter (q-o-q) basis, its financial statistics have improved.

Portfolio Occupancy Profile (Q1 FY2021 vs. Q2 FY2021)

Moving on, let us take a look at the REIT’s portfolio occupancy profile where I will be comparing the statistics recorded for the current quarter under review (i.e. Q2 FY2021 ended 30 June 2021) against that recorded in the previous quarter three months ago (i.e. Q1 FY2021 ended 31 March 2021) to find out whether or not it has improved, deteriorated, or continued to remain resilient:

Portfolio Occupancy (%)Q1 FY2021Q2 FY2021
Singapore Retail91.5%93.8%
Singapore Office96.1%95.0%
Australia Retail90.3%88.0%
Australia Office93.9%93.9%
UK Office100.0%100.0%

My Observations: Compared to the portfolio occupancy recorded in the previous quarter, it has, in my personal opinion, continued to remain resilient.

The only thing I want to highlight here is the 1.1 percentage point (pp) drop in its Singapore office occupancy – which is due to a slight decline in the occupancy in its Suntec City Office (down from 96.0% in Q1 FY2021 to 93.4% Q2 FY2021). Despite of that, the REIT’s Singapore office occupancy rate is still higher than the Core CBD occupancy rate of 92.1%.

Debt Profile (Q1 FY2021 vs. Q2 FY2021)

Similar to how I have studied the REIT’s portfolio occupancy profile in the previous section, I too will be looking at the REIT’s debt profile recorded for the current quarter under review and compare it against the previous quarter 3 months ago:

Q1 FY2021Q2 FY2021
Aggregate Leverage
Interest Coverage
Ratio (times)
Average Term to
Debt Maturity (years)
2.9 years3.0 years
Average Cost of
Debt (%)

My Observations: Compared to the previous quarter, there was a slight improvement in its debt profile, which in my personal opinion, is good to note – for those of you who have concerns about its aggregate leverage and interest coverage ratio, I understand that the REIT’s management intends to keep the former within 45.0% and the latter at 2.5x – and the latest stats reported by the REIT certainly is within their manageable range.

Distribution Per Unit (Q1 FY2020 vs. Q1 FY2021)

Suntec REIT is one that has continued to distribute a quarterly payout to its unitholders, and the following table is the amount of distributions the management have declared for the current quarter under review compared to the same time period last year:

Q2 FY2020Q2 FY2021% Variation
Distribution Per
Unit (S$’cents/unit)
1.533 cents2.109 cents37.6%

If you are a unitholder of the REIT, you may want to take note of the following dates regarding its distribution payout:

Ex-Date: 30 July 2021
Record Date: 02 August 2021
Payout Date: 27 August 2021

Closing Thoughts

Coming from a low base in FY2020 (due to the 2-month ‘circuit breaker’ period imposed by the Singapore government to stem out the further community spread of the Coronavirus), along with contributions from its acquisitions, it is of no surprise here that the REIT’s current quarter results is an improved one.

Another thing to highlight is the slight improvements in the REIT’s debt profile compared to the previous quarter.

Moving forward, as I am writing this post, today is the first day that Singapore have reversed back into Phase 2 (Heightened Alert) once again till 18 August 2021, where dining-in is once again not allowed, along with a reduction in the number of visitors allowed to the malls. I am of the opinion that the extent to which the REIT may be affected will largely depend on whether or not the period will be extended, along with whether or not restrictions will be tightened further – if it happens, then the REIT’s performance for the second half of FY2021 is likely to be impacted. On the other hand, if the current restrictions are being relaxed and reverted back to ‘Phase 3 (Heightened Alert)’ after 18 August, then I personally would think that the impact on the REIT will be minimal.

With that, I have come to the end of my summary of Suntec REIT’s latest set of financial results. As always, I do hope that you find the contents above useful. Also, do take note that this post is by no means a buy or sell recommendation for the REIT’s units – you should always do your own due diligence before you make any investment decisions.

Related Documents

Disclaimer: At the time of writing, I am a unitholder of Suntec REIT.

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