Suntec REIT (SGX: T82U) invests in commercial properties (primarily for retail and office purposes) in Singapore, Australia, as well as in the United Kingdom, with a total asset under management of approximately S$12.1 billion as of 30 June 2025.
In terms of net property income contribution, in the latest full-year ended 31 December 2024, 71% of its revenue comes from its Singapore properties (particularly, Suntec City alone contributes 47% towards the REIT’s net property income), with the remaining 17% coming from its Australia properties, and 12% from its United Kingdom properties.
2 things to highlight from its business update for 1Q FY2025 released in April – its all-in borrowing cost have improved compared to the previous quarter (from 4.06% in 4Q FY2024 to 3.96% in 1Q FY2025); at the same time, its distribution payout to unitholders have finally improved on a year on year basis after several quarters of decline (from 1.511 cents/unit in 1Q FY2024 to 1.563 cents/unit in 1Q FY2025).
Has these 2 statistics continued to improve in the 2nd quarter? Let us find out in this post, where I will be reviewing the REIT’s latest 2Q and 1H FY2025 results released earlier this evening (24 July), where I will be looking at its latest financial figures, portfolio occupancy and debt profile, as well as its distribution payout to unitholders:
Financial Performance (2Q FY2024 vs. 2Q FY2025, and 1H FY2024 vs. 1H FY2025)
2Q FY2024 vs. 2Q FY2025:
| 2Q FY2024 | 2Q FY2025 | % Variance | |
| Gross Revenuue (S$’mil) | $117.1m | $121.0m | +3.3% |
| Property Operating Expenses (S$’mil) | $39.5m | $38.6m | -2.3% |
| Net Property Income (S$’mil) | $77.6m | $82.4m | +6.2% |
| Distributable Income to Unitholders (S$’mil) | $44.7m | $46.9m | +4.9% |
Suntec REIT did not provide any financial figures for the 2nd quarter – I have computed them based on the figures for the first quarter, as well as for the 1st half of the respective financial years.
As you can see from the above, it is a stable set of results reported by the REIT – particularly, this is the 2nd consecutive quarter which it has reported a year-on-year improvement in its gross revenue, net property income, and its distributable income to unitholders.
1H FY2024 vs. 1H FY2025:
| 1H FY2024 | 1H FY2025 | % Variance | |
| Gross Revenuue (S$’mil) | $226.9m | $234.5m | +3.3% |
| Property Operating Expenses (S$’mil) | $75.9m | $75.0m | -1.2% |
| Net Property Income (S$’mil) | $151.0m | $159.5m | +5.6% |
| Distributable Income to Unitholders (S$’mil) | $88.7m | $92.8m | +4.6% |
Similar to the REIT’s financial results for the 2nd quarter, its gross revenue, net property income, and distributable income to unitholders for the 1st half of FY2025 also saw a single-digit percentage improvement compared to the figures reported a year ago.
The 3.3% year-on-year improvement in Suntec REIT’s gross revenue to S$234.5 million was mainly due to higher revenue from Suntec City (from higher retail and office revenue), Suntec Singapore (from an increase in the number of large and mid-scale events and conferences), and 177 Pacific Highway (from a one-off compensation received on 3 surrendered floors which have since been backfilled), partially offset by lower contribution from 21 Harris Street (from a weaker Australian dollar), 55 Currie Street (from a lower occupancy as a result of slow demand), as well as from The Minster Building (from the absence of a one-off compensation received from an ex-tenant in 1H FY2024).
Coupled with a 1.2% year on year dip in its property operating expenses, the REIT’s net property income saw a 5.6% year-on-year growth to S$159.5 million.
Finally, the 4.6% year-on-year increase in its distributable income to unitholders to S$92.8 million can be attributed to strong performance from its Singapore portfolio, along with a lower finance cost.
Portfolio Occupancy Profile (1Q FY2025 vs. 2Q FY2025)
Over the quarters, Suntec REIT’s portfolio occupancy profile have been maintained at a healthy level – with most of its properties having an occupancy rate of at least 90%. Has this trend manage to continue?
Let us find out in the table below, where I’ll be comparing the statistics reported for the current quarter under review (i.e., 2Q FY2025 ended 30 June 2025) against that reported in the previous quarter 3 months ago (i.e., 1Q FY2025 ended 31 March 2025):
| 1Q FY2025 | 2Q FY2025 | Difference (in Percentage Points – pp) | |
| Singapore (Retail) | 98.2% | 98.0% | -0.2pp |
| Singapore (Office) | 98.7% | 99.0% | +0.3pp |
| Australia (Office & Retail) | 90.9% | 88.6% | -2.3pp |
| United Kingdom (Office) | 95.3% | 92.2% | -3.1pp |
As far as the occupancy of the REIT’s properties in the various geographical locations are concerned, most of them were slightly lower – that said, they are still maintained at pretty high levels (in my personal opinion).
The slight 0.3 percentage point (pp) improvement in the occupancy rate of its Singapore Office properties can be attributed to Suntec City Office (where its occupancy rate improved from 98.6% in 1Q FY2025 to 99.5% in 2Q FY2025).
For its retail properties in Singapore, the 2.0pp dip in occupancy to 98.0% can be attributed to a slight decline in the occupancy rates of Suntec City Mall (down from 98.3% in 1Q FY2025 to 98.0% in 2Q FY2025), and Marina Bay Link Mall (down from 96.5% in 1Q FY2025 to 97.8% in 2Q FY2025).
For its Australia properties, 2.3pp dip in its occupancy to 88.6% can be attributed to declines in Southgate Complex (from 90.1% in 1Q FY2025 to 87.3% in 2Q FY2025), as well as 55 Currie Street (from 61.4% in 1Q FY2025 to 52.4% in 2Q FY2025). Its 3 other properties in the country, namely 177 Pacific Highway, 21 Harris Street, and 477 Collins Street, are all fully occupied.
For its United Kingdom properties, the 3.1pp decline in its occupancy to 92.2% was due to The Minster Building (where the occupancy fell from 90.8% in 1Q FY2025 to 84.9% in 2Q FY2025). Nova Properties continue to have a 100% occupancy.
On the rental reversions of new and/or renewed leases, I note that for the office properties in Singapore, it was at +10.0% (a further improvement from +8.0% recorded in 1Q FY2025). Retail properties in Singapore also saw a rental reversion of +17.2%. The same can also be said for the rental reversion of its Australian properties, which was at a very impressive level of +22.9% – all these will definitely aid in the further improvement of the REIT’s financial performances in the quarters ahead.
Debt Profile (1Q FY2025 vs. 2Q FY2025)
For those of you who have been following my reviews of Suntec REIT’s latest results over the quarters, you should be aware of my concerns on its debt profile (where its aggregate leverage is one the highest among all the Singapore REITs; at the same time, its interest coverage ratio is among the lowest). The management is well-aware of this, and is looking at bringing down its aggregate leverage to around 40% through divesting strata units of its office units at Suntec City.
That said, how is the REIT’s debt profile this time round? Particularly, has its average all-in cost of debt continued to report an improvement?
Let us find out in the table below, where I’ll be comparing the statistics reported for the current quarter under review (i.e., 2Q FY2025) against that reported in the previous quarter 3 months ago (i.e., 1Q FY2025), as follows:
| 1Q FY2025 | 2Q FY2025 | |
| Aggregate Leverage (%) | 43.4% | 41.1% |
| Interest Coverage Ratio (times) | 1.9x | 2.0x |
| Average Term to Debt Maturity (years) | 3.2 years | 3.2 years |
| Average Cost of Debt (%) | 3.96% | 3.82% |
| % of Borrowings Hedged to Fixed Rates (%) | ~65% | ~65% |
On the whole, Suntec REIT’s debt profile for the current quarter under review is an improved one compared to the previous quarter (particularly, its aggregate leverage, currently at 41.1%, is slowly inching towards the management’s target of about 40%) – which is another positive to note.
Looking at its debt maturity profile, the REIT does not have any refinancing obligations for the 2nd half of FY2025, and just 2.5% (or S$100 million) of borrowings due for refinancing due for refinancing in FY2026. Between FY2027 and FY2029 (a period of 3 financial years), it has an average of about 28% of borrowings due for refinancing each year, with the remaining 13% of borrowings only due for refinancing in FY2030 or later.
Distribution Payout to Unitholders
Suntec REIT is one of the few remaining Singapore REITs that have continued to pay out a distribution to the unitholders on a quarterly basis.
For 2Q FY2025, the management have declared a distribution payout of 1.592 cents/unit – a 4.0% increase compared to its payout of 1.531 cents/unit a year ago.
If you are a unitholder of the REIT, do take note of the following dates on its distribution payout:
Ex-Date: 31 July 2025
Record Date: 01 August 2025
Payout Date: 29 August 2025
Together with its distribution payout of 1.563 cents/unit declared in 1Q FY2025, Suntec REIT’s distribution payout for 1H FY2025 amounts to 3.155 cents/unit. Compared to its payout of 3.042 cents/unit declared a year ago, this represented a 3.7% year-on-year improvement.
CEO Mr Chong Kee Hong’s Comments & Outlook (from the REIT’s Press Release)
“The Singapore Office, Retail, and Convention portfolios continued to deliver strong operating performances. Financing cost for the REIT declined year-on-year driven by our refinancing efforts and paring down of debt with proceeds from the divestment of Suntec strata office units.
Despite the global macroeconomic uncertainties, the resilient operating performance is the result of our focused efforts on strengthening the strong fundamentals of our properties.”
Closing Thoughts
On the whole, it was another positive set of results reported by the REIT – and as a unitholder of the REIT, I’m pleased with its latest ‘report card’.
Particularly, this is the 2nd consecutive quarter the REIT reported improvements in its financial results (in terms of its gross revenue, net property income, as well as its distributable income to unitholders), as well as in its distribution payout to unitholders (where it was upped by 4.0% year on year to 1.592 cents/unit for the 2nd quarter; for the first half of the year, its distribution payout saw a 3.7% year on year growth to 3.155 cents/unit).
At the same time, its debt profile for the current quarter (when compared against the previous quarter) has also continued to improve – particularly, its aggregate leverage, at 41.1% (a 2.3pp improvement from 43.4% in the previous quarter), is inching closer towards the management’s target of 40.0%.
The only slight negative was the occupancy rate of its properties – where, apart from its offices in Singapore, the others (its retail malls in Singapore, as well as its properties in Australia and in the United Kingdom) all saw a slight decline compared to the previous quarter. That said, in terms of their occupancy rates, they are maintained at a pretty high level (at least 88%), with rental reversions for its retail and office properties in Singapore, as well as those in Australia, all at positive percentages (ranging from between +10.0% and +22.9%) – which will definitely contribute to a further improvement in the REIT’s financial results, and potentially its distribution payout to unitholders, in the quarters ahead.
This brings me to the end of my review of Suntec REIT’s latest results for the 2nd quarter, as well as for the 1st half of FY2025. Do take note that everything I’ve shared in this post are for educational purposes only, and not as any buy or sell calls for the REIT’s units. You should always do your own due diligence before making any investment decisions.
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Disclaimer: At the time of writing, I am a unitholder of Suntec REIT.
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