Suntec Reit to divest three Australian assets, focus more on Singapore
The supervisor added that Singapore’s commercial real estate market “continues to be favourable”, supported by restricted brand-new supply and limited vacancy rates. It will continue to explore chances to strengthen Suntec REIT’s presence in the city-state.
Situated inside North Sydney’s CBD, 177 Pacific Highway is a 31-storey Grade A commercial development. The recently accomplished 21 Harris Street is a nine-storey, Grade An office building in Pyrmont, west of Sydney’s CBD. Both are totally owned by the Reit.
Suntec Reit are going to be releasing official sales initiatives for 3 freehold commercial properties in Australia, comprising 177 Pacific Highway and 21 Harris Street in Sydney, and 477 Collins Street in Melbourne.
This comes with a portfolio reconstitution to lower international visibility, starting with Australia, develop its emphasis on the growing Singapore account and enhance its resources framework.
The divestments of the Australian investments are sustained by “improving conditions in Australia’s funding markets and proceeded capitalists’ passions in top quality, well-leased possessions with secure revenue streams”, the bourse filing noted.
According to a Sept 21 bourse filing, the divestment strategy complies with a strategic evaluation undergone by the Reit after a change in its sponsor.
Chong Kee Hong, CEO of Suntec Reit’s manager, stated the successful divestment of the possessions will lower the Reit’s aggregate leverage proportion to below 40%, delivering better flexibility for future purchases, unit buy-backs and/or resources distributions.
Under the divestment strategy, the supervisor says the Reit will focus more on Singapore, provided the nation’s macroeconomic and political security and the connected power of the Singapore dollar, particularly amidst economic unpredictability and high rising cost of living.
Meanwhile, Suntec Reit carries a 50% stake in 477 Collins Road, a 39-storey, premium-grade office development known as Olderfleet, in Melbourne’s CBD.
” This would also minimize the revenues drag occurring from the high-interest rate environment in Australia and boost the Reit’s interest plans ratio.”
