Suntec REIT (SGX:T82U), with retail and office properties in Singapore, Australia, as well as in the United Kingdom, released its results update for the third quarter of financial year 2021 ended 30 September 2021 before trading hours this morning (22 October 2021.)

Even though the REIT is one that have changed to reporting its full financial results on a half-yearly basis, it has continued to report some key financial numbers (which as a unitholder of the REIT, it’s something I appreciate), along with continuing with its quarterly distribution payouts to its unitholders (in my opinion, for those who are looking to invest in REITs that pays out a regular distribution, this particular REIT is one to consider.)

In my post today about the REIT’s latest update, you will read about its latest financial performance, portfolio occupancy and debt profile, as well as its distribution payout declared to unitholders this time round, along with my thoughts about the REIT’s latest results update from the point of view of a unitholder.

Let’s begin…

Financial Performance (Q3 FY2020 vs. Q3 FY2021, and 9M FY2020 vs 9M FY2021)

Q3 FY2020 vs. Q3 FY2021:

Q3 FY2020Q3 FY2021% Variance
Gross Revenue
Property Operating
Expenses (S$’mil)
Net Property
Income (S$’mil)
Distributable Income
to Unitholders

On one look, it’s obvious that the REIT’s latest set of quarterly results is an improved one, both in terms of its gross revenue, as well as in its net property income and also in its distributable income to unitholders.

The improvements in its gross revenue can be attributed to:

  • Suntec City Mall (lower rental assistance provided to tenants, higher occupancy, higher gross turnover rent, and higher marcom revenue)
  • 177 Pacific Highway (one-off surrender fee received)
  • 21 Harris Street (higher occupancy)
  • 55 Currie Street (recognition of rent from a tenant upon the signing of tenancy agreement)
  • 477 Collins Street (higher occupancy, as well as contribution with effect from 1 Aug 2020)
  • Minster Building (newly acquired on 28 July 2021)

The 22.0% quarter-on-quarter (q-o-q) growth in its distributable income to unitholders can be attributed to contribution from Nova Properties, The Minster Building, 477 Collins Street, lower retail rent assistance, as well as from a one-off surrender fee from 177 Pacific Highway.

9M FY2020 vs 9M FY2021:

While the REIT did not share its year-on-year (y-o-y) financial statistics, but I have computed it based on its results for the first 3 quarters and you can find it in the table below:

9M FY20209M FY2021% Variance
Gross Revenue
Property Operating
Expenses (S$’mil)
Net Property
Income (S$’mil)
Distributable Income
to Unitholders

As a result of improved sets of results reported in the first and in the second quarter of the current financial year (compared to the previous year), its y-o-y results so far is also a better one for the REIT.

Portfolio Occupancy (Q2 FY2021 vs Q3 FY2021)

Moving on, let us take a look at the portfolio occupancy profile of Suntec REIT for the third quarter of FY2021 (ended 30 September 2021), compared against that recorded in the previous quarter 3 months ago (i.e. Q2 FY2021 ended 30 June 2021) to find out whether it has improved (just like its financial performance which we have looked at in the previous section), or deteriorated:

Q2 FY2021Q3 FY2021Difference (in
Percentage Points – pp)
United Kingdom

My Observations: In my opinion, its a mixed set of results as a far as the REIT’s portfolio occupancy is concerned – where occupancy rates for its Singapore properties have improved, but its occupancy rate for properties in Australia and in the United Kingdom have weakened slightly:

For its Singapore office occupancy rates, all of its office properties (in Suntec City Office, One Raffles Quay, and MBFC Towers 1 & 2) saw improvements in their committed occupancy. The same can also be said for its retail properties in Singapore (in Suntec City Mall and in Marina Bay Link Mall.)

For its Australia office properties, the weakness is due to a drop in occupancy in 177 Pacific Highway (from 100.0% in Q2 FY2021 to 93.8% in Q3 FY2021) and Southgate Office (from 95.4% in Q2 FY2021 to 91.7% in Q3 FY2021). Despite of that, its overall occupancy rate (of 92.8% overall) is still higher than the Nationwide CBD office occupancy of 86.0%.

Finally, the slight dip in the UK office is due to the fact that Minster Building is only 96.7% occupied, which pulled down the overall occupancy rate for its UK office this time round, unlike in the previous quarter, where its UK properties only consist of Nova Properties, which is 100.0% occupied.

Debt Profile (Q2 FY2021 vs. Q3 FY2021)

Similar to how I have reviewed the REIT’s portfolio occupancy in the previous section, I too will be studying its debt profile for the current quarter under review (i.e. Q3 FY2021 ended 30 September) against that recorded n the previous quarter (i.e. Q2 FY2021 ended 30 June):

Q2 FY2021Q3 FY2021
Aggregate Leverage
Interest Coverage
Ratio (times)
Average Term to
Debt Maturity (years)
3.0 years3.1 years
Average Cost of
Debt (%)

My Observations: For those of you who have been following my postings about Suntec REIT’s results review, you are probably aware that I’ve always expressed my concerns about its aggregate leverage (or gearing ratio) which is on the high side, and also its interest coverage ratio, which is on the low side.

Compared to the last quarter, its aggregate leverage continued to climb by 1.2pp to 44.3% (and at this level, it is very close to the regulatory limit of 50.0%.) Also, its interest coverage ratio have fell slightly to 2.7x. However, there are no more debt maturing in the final quarter of the current financial year, with another $700m (or 13.6%) of its debts maturing in the coming financial year 2022 ahead.

However, it’s not all bad for the REIT’s debt profile – its debt profile is its average cost of debt, as well as its average term to debt maturity have improved slightly compared to the previous quarter.

Distribution Per Unit to Unitholders (Q3 FY2020 vs. Q3 FY2021)

For the current quarter under review, the management have declared a payout of 2.232 cents/unit, a 20.8% q-o-q improvement from the 1.848 cents/unit declared in Q3 FY2020.

For the first 9 months of the current financial year, a total of 6.386 cents/unit has been declared, which is a 24.2% y-o-y growth from the 5.141 cents/unit declared in the same time period last year.

If you are a unitholder of the REIT, here are the dates regarding the payout of distribution to take note of:

Ex-Date: 29 October 2021
Record Date: 01 November 2021
Payout Date: 29 November 2021

Closing Thoughts

Apart from its debt profile (where its aggregate leverage is very close to the regulatory limit of 50.0%), as a unitholder, the improvements in its financial performance is very much within my expectations.

Looking ahead, at the time of writing, Singapore is currently in a “stabilisation” phase as far as the management of Covid-19 is concerned – where only groups of 2 vaccinated individuals are allowed into malls and dining in, and working from home being the default. As far as performance of the retail malls are concerned, personally I feel that the impact is not big (considering at the time of writing, more than 84% of the Singapore population have been fully vaccinated.) I’m positive of the REIT reporting an improved set of financial results for the fourth quarter, as well as for the full-year of the financial year 2021.

With that, I’ve come to the end of my review of Suntec REIT’s latest round of business update. Please note that all the opinions you’ve read in the sections above are purely my own, which I’m sharing for educational purposes only. Please 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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