Suntec REIT (SGX: T82U) invests in real estate assets used predominantly for retail and/or office purposes located in Singapore, Australia, and in the United Kingdom worth over S$12 billion, as follows:

Singapore:

  • Suntec City (office and retail)
  • Suntec Singapore Convention & Exhibition Centre (66.3% interest)
  • One Raffles Quay (33.3% interest)
  • Marina Bay Financial Centre Towers 1 and 2 (33.3% interest)
  • Marina Bay Link Mall (33.3% interest)

Australia:

  • 177 Pacific Highway, Sydney
  • 21 Harris Street, Sydney
  • Southgate Complex, Melbourne (50% interest)
  • Olderfleet, 477 Collins Street, Melbourne (50% interest)
  • 55 Currie Street, Adelaide

United Kingdom:

  • Nova Properties, London (50% interest)
  • The Minster Building, London

Earlier this evening (24 April), Suntec REIT released its business update for the 1st quarter of FY2025, to which you will find my review of its latest financial figures, portfolio occupancy and debt profile, as well as its distribution payout to unitholders (the REIT continues to be one of the few that continues to maintain its quarterly distribution payout frequency) in this post:

Financial Figures (1Q FY2024 vs. 1Q FY2025)

1Q FY20241Q FY2025% Variance
Gross Revenue
(S$’mil)		$109.8m$113.5m+3.4%
Property Operating
Expenses (S$’mil)		$36.4m$36.4m–
Net Property
Income (S$’mil)		$73.4m$77.1m+5.0%
Distributable Income
to Unitholders (S$’mil)		$44.0m$45.9m+4.3%

Suntec REIT’s latest 1Q FY2025 results was a surprise for me, where gross revenue, net property income, and distributable income to unitholders were all up by a low- to mid-single digit percentage.

The reason for the 3.4% and 5.0% year-on-year improvement in the REIT’s gross revenue and net property income to S$113.5 million and S$77.1 million respectively can be attributed to higher gross revenue driven by stronger operating performance across all properties.

Additionally, the 4.3% year-on-year climb in the REIT’s distributable income to unitholders to S$45.9 million was due to better performance from its Singapore properties, along with lower finance cost.

Portfolio Occupancy Profile (4Q FY2024 vs. 1Q FY2025)

One of the things I like about Suntec REIT is that, over the quarters, the occupancy rate of most of its properties in the various geographical locations have been maintained at a rather high level (above 90%).

Has this trend continue to hold? Let us find out in the table below, where I will be comparing the statistics reported for the current quarter under review (i.e., 1Q FY2025 ended 31 March 2025) against that reported in the previous quarter 3 months ago (i.e., 4Q FY2024 ended 31 December 2024):

4Q FY20241Q FY2025
Singapore
(Retail)		98.3%98.2%
Singapore
(Office)		98.7%98.7%
Australia
(Office & Retail)		90.9%90.9%
United Kingdom
(Office)		95.1%95.3%

Compared to the previous quarter, Suntec REIT’s properties for its Singapore office, along with that for its Australia office and retail properties remained the same, at 98.7% and 90.9% respectively.

The overall occupancy rate for the office properties in the United Kingdom has improved slightly by 0.2 percentage point (pp) to 95.3%, due to the Nova Properties returning to full occupancy in the current quarter under review (compared to 99.6% in the previous quarter). The occupancy at The Minster Building remains the same at 90.8%.

On the other hand, the occupancy rate of the REIT’s Singapore retail properties inched down by 0.1pp to 98.2%, due to a slight dip in the occupancy of Suntec City Mall (down to 98.4% in 1Q FY2025 to 98.3% in 4Q FY2024), while the occupancy of Marina Bay Link Mall improved from 94.4% in 4Q FY2024 to 96.5% in 1Q FY2025.

Rental reversions for new and/or renewed leases for its Singapore office and retail properties were also at positive percentages – at +8.0% and +10.3% respectively.

Debt Profile (4Q FY2024 vs. 1Q FY2025)

While Suntec REIT’s portfolio occupancy has by and large remained resilient, the same cannot be said about its debt profile – with its aggregate leverage is slightly on the high side (at 42.4% in 4Q FY2024), while at the same time, its interest coverage ratio (at 1.9x in 4Q FY2024 is among the lowest compared to the other Singapore-listed REITs). The management is aware of this and is looking to divest strata units of the Suntec City office to pare down debt.

Just like how I have reviewed the REIT’s portfolio occupancy in the previous section, in the table below, you will find a comparison of its debt profile for the current quarter under review (i.e., 1Q FY2025) against that reported in the previous quarter 3 months ago (i.e., 4Q FY2024):

4Q FY20241Q FY2025
Aggregate Leverage
(%)		42.4%43.4%
Interest Coverage
Ratio (times)		1.9x1.9x
Average Term to
Debt Maturity (years)		2.83 years3.2 years
Average Cost of
Debt (%)		4.06%3.96%
% of Borrowings Hedged
to Fixed Rates (%)		~58%~65%

Apart from a 1.0pp increase in Suntec REIT’s aggregate leverage 43.4% (which is a slight negative), the other statistics have either remained stable or improved.

Particularly, its average cost of debt have improved by 0.1pp to 3.96% (which is a positive; looking ahead, the management is of the view that its average cost of debt will be around 4.0%). Additionally, it has improved its percentage of borrowings hedged to fixed rates – from approximately 58% in 4Q FY2024 to approximately 65% in 1Q FY2025.

As far as the REIT’s debt maturity in the coming years ahead is concerned, it has about 6.8% (or S$300 million) and 2.3% (or S$100 million) of borrowings due for refinancing in FY2025 (which, according to its business update, they will be renewed by the first half of the year) and FY2026. Between FY2027 and FY2029 (a period of 3 years), it has an average of about 26.2% of borrowings due for refinancing each year, with the remaining 12.2% of borrowings due for refinancing in FY2030 or later – on the whole, I consider its debt maturity very well-spread out.

Distribution Payout to Unitholders (1Q FY2024 vs. 1Q FY2025)

As mentioned in the beginning of this post, Suntec REIT is one of the few remaining REITs that continue to adopt a quarterly distribution payout frequency.

In the table below, you’ll find a comparison of the REIT’s distribution payout for 1Q FY2025 compared to that declared a year ago:

1Q FY20241Q FY2025% Variance
Distribution Per
Unit (S$’cents)		1.511 cents1.563 cents+3.4%

If you are a unitholder of Suntec REIT, do take note of the following dates on its distribution payout:

Ex-Date: 02 May 2025
Record Date: 05 May 2025
Payout Date: 30 May 2025

CEO Mr Chong Kee Hiong’s Comments and Outlook (from the REIT’s Press Release)

“Singapore Office, Retail, and Convention as well as the UK portfolios continued to deliver strong operating performances. Financing cost for the REIT also declined year-on-year arising from the refinancing efforts in FY24 and paring down of debt with proceeds from divestment of strata office units.

Suntec REIT also completed $730 million refinancing due in 2025 and 2026, which would result in interest savings of approximately $1.8 million per annum.

Suntec REIT’s continual improvement in operating performance highlights the strong fundamentals of the properties. In light of the global macroeconomic uncertainties, we remain focused on strengthening the operating performance of our properties.”

Closing Thoughts

Suntec REIT’s latest 1Q FY2025 business update, particularly its financial figures and distribution payout to unitholders, are a surprise to me – especially for the latter, where it is the first time in a number of quarters since it has recorded a year-on-year improvement.

In terms of occupancy rate of its properties in the various geographical locations, apart from Australia (where the occupancy rate of its retail and office properties are at 88.9%), the others are at a high of above 90%. Rental reversion for the office and retail properties in Singapore were also in positive percentages.

The only slight negative in its latest results was its aggregate leverage, which edged up by 1.0pp to 43.4%.

To sum up, as a unitholder, I’m satisfied with the REIT’s latest business update, and I hope it can continue to record further improvements in the coming quarters.

This brings me to the end of my review of Suntec REIT’s latest business update for the 1st quarter of FY2025. I hope you’ve found the contents presented within useful. At the same time, do note that all the opinions you find in this post are purely mine which I’m sharing for educational purposes only. They do not comprise any buy or sell calls for the REIT’s units. You should always do your own due diligence before you embark on any investment decisions.

Related Documents

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

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