Brief Introduction:

When Suntec REIT (SGX: T82U) was listed on the Singapore Exchange in December 2004, its portfolio consisted of just 2 properties – Suntec City Mall and the Suntec City Office Towers.

Since then, the REIT has significantly expanded its footprint. In Singapore, its portfolio now includes a 66.3% interest in Suntec Singapore Convention & Exhibition Centre, a one-third stake in One Raffles Quay, Marina Bay Financial Centre Towers 1 & 2, and Marina Bay Link Mall, alongside its flagship Suntec City assets. 

Beyond Singapore, the REIT also owns office and retail properties across major Australian cities, including 177 Pacific Highway and 21 Harris Street in Sydney, a 50% interest in Southgate Complex and Olderfleet, 477 Collins Street in Melbourne, and 55 Currie Street in Adelaide. It has also established a presence in the United Kingdom through ownership of The Minster Building and a 50% interest in Nova Properties, both located in London. 

Financial Performance (1H FY2025 vs. 1H FY2026):

	1H FY2025	1H FY2026	% Variance
Gross Revenuue (S$’mil)	$234.5m	$238.9m	+1.9%
Property Operating Expenses (S$’mil)	$75.0m	$79.9m	+6.5%
Net Property Income (S$’mil)	$159.5m	$159.0m	-0.3%
Distributable Income to Unitholders (S$’mil)	$92.8m	$116.5m	+25.5%

The key highlight of Suntec REIT’s financial performance for 1H FY2025 was the 25.5% increase in distributable income to unitholders, despite gross revenue rising by just 1.9% and net property income declining marginally by 0.3%. The strong growth in distributable income was driven by improved operating performance across its Singapore office and retail portfolio, lower financing costs, as well as the absence of additional Australia withholding tax provisions relating to the lack of MIT status.

The 1.9% year-on-year increase in gross revenue was supported by stronger contributions from Suntec City, Suntec Singapore and 55 Currie Street. Suntec City benefited from higher occupancy and rents, along with incremental revenue following the completion of asset enhancement works at the mall. Suntec Singapore also recorded higher occupancy and rents within its retail component, although this was partially offset by lower MICE revenue due to fewer large-scale conferences. Meanwhile, 55 Currie Street benefited from improved occupancy and a stronger Australian dollar. These gains were partially offset by a lower contribution from 177 Pacific Highway, following the absence of the S$8.4 million one-off compensation recorded in 1H FY2025.

Net property income slipped by 0.3% year on year, mainly due to the absence of the one-off compensation received at 177 Pacific Highway in 1H FY2025. This was compounded by lower revenue and higher operating expenses at The Minster Building as a result of vacancies.

Financial Figures (2Q FY2025 vs. 2Q FY2026):

Suntec REIT did not separately disclose its financial figures for the 2nd quarter. As such, the following figures have been calculated based on the reported results for the 1st quarter and the 1st half of the respective financial years: 

	2Q FY2025	2Q FY2026	% Variance
Gross Revenuue (S$’mil)	$121.0m	$123.3m	+1.9%
Property Operating Expenses (S$’mil)	$38.6m	$41.6m	+7.8%
Net Property Income (S$’mil)	$82.4m	$81.7m	-0.8%
Distributable Income to Unitholders (S$’mil)	$46.9m	$59.2m	+26.2%

Suntec REIT’s financial performance for 2Q FY2026 was largely in line with that recorded for 1H FY2026. Gross revenue increased by 1.9% year on year, while net property income declined slightly by 0.8%. In contrast, distributable income to unitholders jumped by a notable 26.2%.

The year-on-year decline in net property income was mainly due to the absence of compensation received from 177 Pacific Highway in the corresponding period a year ago.

Portfolio Occupancy Profile (1Q FY2026 vs. 2Q FY2026):

	1Q FY2026	2Q FY2026	Difference (in Percentage Points – pp)
Singapore (Retail)	99.0%	99.5%	+0.5pp
Singapore (Office)	98.8%	99.5%	+0.7pp
Australia (Office & Retail)	90.7%	90.1%	-0.6pp
United Kingdom (Office)	92.5%	92.5%	–

Occupancy rates across Suntec REIT’s Singapore properties improved during the quarter. For its retail portfolio, Suntec City Mall’s occupancy rose by 0.6 percentage points (pp), from 99.0% in 1Q FY2026 to 99.6% in 2Q FY2026. This was partially offset by a 0.6pp decline in Marina Bay Link Mall’s occupancy, from 98.7% to 98.1%. Meanwhile, its Singapore office portfolio saw an improvement in occupancy across all its properties – Suntec City Office, One Raffles Quay, and MBFC Towers 1 & 2.

In contrast, the overall occupancy rate of its Australian portfolio dipped slightly by 0.6pp to 90.1%. This was mainly due to a weaker occupancy rate at 55 Currie Street, which fell by 4.9pp from 66.0% in 1Q FY2026 to 61.1% in 2Q FY2026. On a more positive note, occupancy rates at 177 Pacific Highway, 21 Harris Street, and Southgate Complex all improved, while Olderfleet, 477 Collins Street remained fully occupied.

Occupancy across Suntec REIT’s United Kingdom properties remained unchanged at 92.5%.

On the rental front, Suntec REIT recorded positive rental reversions of 10.1% for its Singapore office properties and 10.7% for its Singapore retail properties. The healthy rental reversions should provide further support to the REIT’s financial performance in the quarters ahead.

Debt Profile (1Q FY2026 vs. 2Q FY2026):

	1Q FY2026	2Q FY2026
Aggregate Leverage (%)	41.6%	43.0%
Interest Coverage Ratio (times)	2.2x	2.2x
Average Term to Debt Maturity (years)	2.4 years	2.1 years
Average Cost of Debt (%)	3.56%	3.55%
% of Borrowings Hedged at Fixed Rates (%)	~65%	~57%

Following the redemption of S$150 million worth of 4.25% perpetual securities, Suntec REIT’s aggregate leverage increased by 1.4 percentage points to 43.0%.

Another point worth noting is the 8.0pp decline in the proportion of borrowings hedged at fixed rates, which fell to 57%. This could work in Suntec REIT’s favour if benchmark interest rates continue to decline, as a larger proportion of its borrowings would benefit from lower financing costs. However, the reverse is also true – should interest rates rise, the 43% of borrowings on floating rates would be exposed to higher financing costs, which could weigh on the continued recovery in its distribution payout.

In terms of its debt maturity profile, refinancing requirements remain well spread out. Just 4.7% of its borrowings are due for refinancing in the second half of FY2026, followed by 19.9% in FY2027. An average of 29.1% of borrowings will mature in each of FY2028 and FY2029, while the remaining 17.2% will only be due for refinancing in FY2030 and beyond.

Distribution Payout to Unitholders:

2Q FY2025 vs. 2Q FY2026:

Suntec REIT is one of the few Singapore-listed REITs that distributes income to unitholders on a quarterly basis.

The table below compares the REIT’s distribution payout for 2Q FY2026 with the distribution declared in the corresponding period last year:

	2Q FY2025	2Q FY2026	% Variance
Distribution Per Unit (S$’cents)	1.592 cents	2.000 cents	+25.6%

Suntec REIT’s distribution per unit surged by 25.6% year on year, driven by stronger operating performance from its Singapore properties, lower financing costs, as well as the absence of additional Australia withholding tax provisions relating to the lack of MIT status in 1H FY2025.

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

Ex-Date: 30 July 2026
Record Date: 31 July 2026
Payout Date: 28 August 2026

1H FY2025 vs. 1H FY2026:

	1H FY2025	1H FY2026	% Variance
Distribution Per Unit (S$’cents)	3.155 cents	3.936 cents	+24.8%

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

“The results reflect Suntec REIT’s sound fundamentals, underpinned by our diversified portfolio of high-quality assets and resilient income streams. The strong performance of Suntec City Mall, enhanced by incremental revenue and income from completed asset enhancement initiatives, demonstrates our proactive approach to portfolio management. We remain focused on creating long-term value and delivering sustainable growth for our unitholders.”

Closing Thoughts:

The key highlight this time round was undoubtedly the 25.6% year-on-year jump in Suntec REIT’s distribution payout to unitholders for the second quarter. This was driven by stronger operating performance from its Singapore properties, lower financing costs, as well as the absence of additional Australia withholding tax provisions relating to the lack of MIT status in 1H FY2025.

In terms of its financial performance, however, growth remained relatively muted. Gross revenue for both the second quarter and 1H FY2026 increased by close to 2% year on year, supported by higher contributions from Suntec City, Suntec Singapore and 55 Currie Street. Meanwhile, net property income declined by less than 1%, mainly due to the absence of compensation received from 177 Pacific Highway in the corresponding period a year ago.

Looking at its portfolio occupancy profile, Suntec REIT continues to maintain a healthy level of occupancy. Apart from Southgate Complex at 87.3%, 55 Currie Street at 66.1%, and The Minster Building at 85.4%, all its other properties recorded occupancy rates of at least 90%. Rental reversions for new and/or renewed leases across its Singapore properties were also firmly positive at double-digit levels, which should provide further support to its operating performance in the quarters ahead.

One area that remains a concern for me is Suntec REIT’s debt profile. Its aggregate leverage increased to 43.0% following the redemption of S$150 million worth of 4.25% perpetual securities. At the same time, only 57% of its borrowings are hedged at fixed rates, leaving a relatively sizeable proportion exposed to movements in benchmark interest rates. While this could benefit the REIT if borrowing rates continue to decline, any renewed increase in rates could raise financing costs and potentially weigh on the continued recovery in its distribution payout. As such, Suntec REIT’s debt profile will remain one of the key areas I will be keeping a close watch on going forward.

Related Documents:

Press Release
Financial Results
Presentation Slides
Review Report

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

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