Suntec Real Estate Investment Trust (T82U) H1 2024 earnings summary

Executive summary

• 1H24 gross revenue rose 1.2% to $226.9m, while NPI fell 1.5% to $151.0m and net income declined 5.5% to $80.8m.

• Distributable income from operations was $88.7m, in line YoY; stronger Singapore and JV performance helped offset weaker Australia and UK contributions, vacancies and higher financing costs.

Financial highlights

• Property expenses rose 6.9% to $75.9m; finance costs increased 4.1% to $88.4m as higher interest expense offset lower transaction-cost amortisation.

• Share of JV profits rose 11.1% to $41.4m, supported by ORQ, MBFC Properties and Nova Properties, partly offset by lower Southgate Complex profits.

• Total return after tax increased 24.8% to $89.0m, supported by an $8.6m divestment gain, derivative fair-value gains and higher JV profits.

• Distribution income was $88.7m; excluding the $11.5m capital distribution in 1H23, it was in line YoY. Total DPU was 3.042 cents versus 3.476 cents, down 12.5%.

• EPS was 2.791 cents basic and 2.783 cents diluted, up 23.7% and 23.6% YoY, respectively.

Outlook and guidance

• Singapore office revenue is expected to strengthen on high occupancy and past rent reversions; growth is expected to moderate but remain positive.

• Suntec City Mall revenue is expected to improve on higher occupancy, rents and marketing revenue; tourism and MICE recovery may support retail traffic and convention income.

• Australia revenue faces leasing downtime and elevated incentives; asset enhancement initiatives are underway at Southgate Complex.

• The Minster Building is expected to reach full occupancy in 2H24, though leasing downtime will weigh on UK revenue.