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

The divestments of the Australian assets are supported by “improving conditions in Australia’s capital markets and continued capitalists’ interests in premium, well-leased possessions with steady revenue streams”, the bourse filing noted.

Under the divestment system, the supervisor states the Reit is going to concentrate more on Singapore, provided the country’s macroeconomic and political security and the associated power of the Singapore dollar, particularly amidst economic uncertainty and high rising cost of living.

This comes with a profile reconstitution to reduce international visibility, beginning with Australia, hone its emphasis on the growing Singapore account and enhance its resources structure.

” This would also reduce the earnings drag developing from the high-interest rate environment in Australia and enhance the Reit’s interest plans ratio.”

According to a Sept 21 bourse declaration, the divestment plan follows a strategic review accomplished by the Reit after an adjustment in its sponsor.

Bloomsbury Residences condominium

Found within North Sydney’s CBD, 177 Pacific Highway is a 31-storey Grade A commercial property 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 managed by the Reit.

The manager added that Singapore’s business property market “continues to be favourable”, supported by restricted new supply and tight vacancy prices. It will continue to explore possibilities to strengthen Suntec REIT’s exposure in the city-state.

Suntec Reit will be launching formal sales campaigns for three freehold business properties in Australia, consisting of 177 Pacific Freeway and 21 Harris Street in Sydney, and 477 Collins Street in Melbourne.

Chong Kee Hong, CEO of Suntec Reit’s manager, said the effective divestment of the possessions will lower the Reit’s aggregate leverage ratio to beneath 40%, giving better adaptability for future purchases, unit buy-backs and/or funding distributions.

On The Other Hand, Suntec Reit holds a 50% claim in 477 Collins Road, a 39-storey, premium-grade office space development referred to as Olderfleet, in Melbourne’s CBD.