Suntec Reit to divest three Australian assets, focus more on Singapore
This is part of a portfolio reconstitution to decrease international exposure, starting off with Australia, hone its focus on the growing Singapore portfolio and boost its resources framework.
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 completely owned by the Reit.
The manager added that Singapore’s industrial real estate market “continues to be favourable”, sustained by restricted new supply and tight vacancy rates. It will remain to explore possibilities to strengthen Suntec REIT’s exposure in the city-state.
Suntec Reit are going to be releasing official sales efforts for 3 freehold commercial real estates in Australia, making up 177 Pacific Highway and 21 Harris Street in Sydney, and 477 Collins Street in Melbourne.
Under the divestment strategy, the supervisor says the Reit will concentrate a lot more on Singapore, given the nation’s macroeconomic and political consistency and the associated strength of the Singapore dollar, specifically amidst economic uncertainty and high rising cost of living.
At The Same Time, Suntec Reit keeps a 50% risk in 477 Collins Road, a 39-storey, premium-grade office development referred to as Olderfleet, in Melbourne’s CBD.
According to a Sept 21 bourse declaration, the divestment strategy follows a strategic review undertaken by the Reit after a modification in its sponsor.
Chong Kee Hong, CEO of Suntec Reit’s manager, claimed the successful divestment of the assets will lower the Reit’s aggregate leverage ratio to below 40%, providing higher flexibility for future purchases, unit buy-backs and/or capital distributions.
” This would also minimize the incomes drag occurring from the high-interest rate environment in Australia and improve the Reit’s interest coverage ratio.”
The divestments of the Australian assets are supported by “enhancing conditions in Australia’s funding markets and continued financiers’ passions in premium, well-leased properties with secure earnings streams”, the bourse declaration noted.
