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

Under the divestment strategy, the manager claims the Reit is going to focus more on Singapore, given the nation’s macroeconomic and political security and the connected power of the Singapore dollar, particularly amid economic uncertainty and high inflation.

This is part of a profile reconstitution to decrease foreign visibility, starting off with Australia, develop its focus on the expanding Singapore profile and improve its resources structure.

Suntec Reit are going to be introducing official sales initiatives for 3 estate business real estates in Australia, comprising 177 Pacific Highway and 21 Harris Street in Sydney, and 477 Collins Street in Melbourne.

Meyer Blue UOL Group Limited & Singapore Land

The manager included that Singapore’s commercial property market “stays favourable”, supported by restricted brand-new supply and limited vacancy rates. It will certainly remain to explore opportunities to enhance Suntec REIT’s exposure in the city-state.

The divestments of the Australian investments are supported by “improving conditions in Australia’s funding markets and continued investors’ rate of interests in premium, well-leased assets with stable income flows”, the bourse declaration noted.

Chong Kee Hong, CEO of Suntec Reit’s manager, claimed the effective divestment of the possessions will reduce the Reit’s accumulation leverage proportion to below 40%, supplying higher versatility for future purchases, unit buy-backs and/or resources distributions.

” This would also minimize the profits drag developing from the high-interest rate environment in Australia and enhance the Reit’s interest coverage ratio.”

Meanwhile, Suntec Reit maintains a 50% claim in 477 Collins Road, a 39-storey, premium-grade office space development known as Olderfleet, in Melbourne’s CBD.

According to a Sept 21 bourse filing, the divestment plan follows a strategic evaluation undertaken by the Reit after an adjustment in its sponsor.

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