As at Dec 31, 2024, the REIT’s committed occupancy stood at 95.4% for its office portfolio and 97.9% for its retail portfolio.

Suntec REIT has reported a distribution per unit (DPU) of 6.192 cents for the FY2024 ended Dec 31, 2024, 2.3% lower y-o-y.  For the 2HFY2024, DPU similarly fell 13.9% y-o-y to 3.15 cents.

Distributable income for the year fell by 12.5% y-o-y to $180.9 million due to higher financing costs and lower contributions arising from vacancies at the REIT’s assets at 55 Currie Street, Adelaide and The Minster Building, London.

Meanwhile, gross revenue in the FY2024 inched up marginally by 0.2% y-o-y to $462.7 million off the back of stronger operating performance at Suntec City Office and Suntec City Mall.

Despite this, net property income (NPI) in the period decreased 0.8% y-o-y to $310.8 million, mainly due to the absence of a one-off property tax refund at Suntec City Mall.

Income from Suntec REIT’s joint ventures (JV) for the year grew by 6.4% y-o-y to $100.0 million due to stronger operating performance at MBFC Properties and One Raffles Quay, as well as higher contributions from Nova Properties in London due to reversal of impairment of receivables.

Cash and cash equivalents in the FY2024 grew by 6.16% y-o-y to $231.3 million.

As at Dec 31, 2024, the REIT’s committed occupancy stood at 95.4% for its office portfolio and 97.9% for its retail portfolio. Its weighted average lease expiry (WALE) decreased to 3.8 years for its office portfolio from 4.2 years in the FY2023, while retail portfolio WALE remained healthy at 2.3 years. 

On the divestment front, Suntec REIT divested $58.3 million of strata units at Suntec City Office Towers at an average price of 24% above book value. The proceeds were used to pare down debts. The transactions were accretive to the REIT’s earnings as the achieved divestment yield were lower than current borrowing costs.

Chong Kee Hiong, CEO of the manager says: “On the operating front, the Singapore office and retail portfolios continued to perform and achieved strong rent reversions across all the quarters of the year. Suntec Convention’s income has also improved significantly with the improvement in operations and an increase in smaller but high yielding events.”

The REIT highlights that the outlook for the Singapore office market remained cautionary in light of an uncertain global outlook and interest rate environment. However, limited core central business district (CBD) office supply could likely support core CBD rent growth in 2025 . As a result, the REIT’s Singapore office portfolio is well-positioned for future growth, on the back of past quarters of positive rent reversions. Rent reversion is expected to remain positive but modest, in the range of 1.0% to 5.0%. 

On Singapore’s retail front, although tourism arrivals continued to recover in the last quarter of 2024, consumers are expected to remain cost-cautious on the back of an uncertain global economic outlook. However, Singapore remains attractive for new retail entrants with the recovery in tourism and the strong pipeline of meetings, incentives, conferences and exhibitions (MICE) events and concerts. With limited prime retail space supply in the year ahead, prime retail rents are expected to improve this year. Suntec REIT notes that its Singapore retail portfolio is well-positioned for future growth, supported by higher occupancy, rent and marcoms activities. Committed occupancy is expected to remain high at more than 95% while rent reversion is expected to remain positive, in the range of 10.0% to 15.0%. 

Meanwhile, office vacancy in Sydney and Melbourne are expected to stabilise with fewer completions in 2025, while Adelaide office vacancy will remain elevated due to new supply in 2025. This is largely due to national CBD vacancy rates remaining largely unchanged in 4QFY2024 despite the positive net absorption across most cities in the quarter, mainly due to new supply in the Sydney CBD.

Although vacancy at 55 Currie Street is likely to increase by 10.0% to 12.0% in the mid-term, Suntec REIT’s Australia office portfolio is expected to remain stable supported by healthy occupancies of the properties in Sydney and Melbourne. 

Finally, in the UK, central London occupancy and rental growth are expected to improve due to tight supply and increase in office utilisation, particularly for good quality office spaces in prime locations. Vacancy and upcoming expiry at The Minster Building is expected to be backfilled in 2025 and rent reversion is expected to be in the range of 1.0% to 3.0%. In all, the REIT’s UK portfolio performance is expected to be impacted by leasing downtime. 

Units in Suntec REIT closed flat at $1.21 on Jan 23.