Suntec Reit DPU up 6.6% as office revenue rises

SUNTEC Reit’s distribution income for the second quarter rose 13.5 per cent to $47.7 million from $42 million a year back. Distribution per unit was 2.977 cents, 6.6 per cent up year-on-year.

Gross revenue for the three months ended June 30 rose 8.9 per cent to $64.5 million, from $59.2 million for the same period last year.

This was mainly due to higher office revenues achieved during the quarter, said ARA Trust Management, Suntec Reit’s manager. Gross office revenue rose 20 per cent year-on-year in Q2, driven by higher rents achieved for the Suntec City and Park Mall properties, as well as additional revenue from Suntec City office strata space acquired last year.

The overall committed occupancy rate for Suntec Reit’s office portfolio was 94.8 per cent as at June 30.

For its retail portfolio, gross revenue rose a marginal 0.5 per cent over the year-ago quarter. Suntec City Mall contributed $28 million, while Park Mall and Chijmes contributed $6.2 million.

The overall occupancy rate for the Reit’s retail portfolio was 98.4 per cent as at June 30.

Property operating expenses rose 18.5 per cent in the quarter to $15.7 million, due to a higher property tax expense as there had been a write-back of property tax provision in Q2 FY2008.

Net financing cost for the quarter was $18.8 million, versus a credit of $9.9 million for Q2 last year. This was due to a net loss arising from the re-measurement of interest rate swap transactions and convertible bonds. Excluding the re-measurement, net financing cost for the quarter fell to $8.5 million.

Suntec Reit’s gearing ratio stood at 33.9 per cent as at June 30.

In April, Suntec Reit secured an $825 million loan facility, with which the office and retail trust said it has no further refinancing needs until 2011.

These second quarter results bring the Reit’s half year gross revenue to $129.4 million, 12.4 per cent up year-on-year, and its distributable income to $94 million, 18.1 per cent up from the first half of last year. DPU for the first six months rose 11 per cent year-on-year to 5.895 cents.

Suntec Reit yesterday closed one cent up at $1.06 a unit.

Source : Business Times – 31 Jul 2009