Suntec Reit to divest three Australian assets, focus more on Singapore

Located inside of North Sydney’s CBD, 177 Pacific Highway is a 31-storey Grade A commercial property development. The recently accomplished 21 Harris Street is a nine-storey, Grade An office complex in Pyrmont, west of Sydney’s CBD. Both are totally owned by the Reit.

Meanwhile, Suntec Reit carries a 50% risk in 477 Collins Street, a 39-storey, premium-grade office space development called Olderfleet, in Melbourne’s CBD.

The manager added that Singapore’s business property market “remains favourable”, sustained by limited brand-new supply and tight vacancy rates. It will continue to explore possibilities to strengthen Suntec REIT’s exposure in the city-state.

The divestments of the Australian investments are supported by “enhancing conditions in Australia’s capital markets and continued capitalists’ rate of interests in high-quality, well-leased properties with stable earnings flows”, the bourse declaration noted.

According to a Sept 21 bourse filing, the divestment strategy follows a strategic review carried out by the Reit after an adjustment in its sponsor.

Chong Kee Hong, CEO of Suntec Reit’s manager, stated the successful divestment of the assets will reduce the Reit’s aggregate leverage proportion to beneath 40%, providing greater versatility for future purchases, unit buy-backs and/or resources distributions.

Suntec Reit will be launching official sales initiatives for three freehold commercial real properties in Australia, making up 177 Pacific Freeway and 21 Harris Street in Sydney, and 477 Collins Street in Melbourne.

The Arcady @ Boon Keng floor plan

” This would also reduce the incomes drag occurring from the high-interest rate setting in Australia and boost the Reit’s interest coverage ratio.”

This comes with a profile reconstitution to lower foreign exposure, starting with Australia, sharpen its emphasis on the growing Singapore account and improve its funding structure.

Under the divestment strategy, the supervisor says the Reit will concentrate a lot more on Singapore, granted the nation’s macroeconomic and political stability and the relative strength of the Singapore dollar, specifically amid economic uncertainty and high inflation.