Suntec Reit to divest three Australian assets, focus more on Singapore
According to a Sept 21 bourse data, the divestment plan follows a strategic assessment undergone by the Reit after a modification in its sponsor.
The divestments of the Australian assets are sustained by “improving conditions in Australia’s funding markets and continued financiers’ interests in premium, well-leased assets with stable revenue streams”, the bourse declaration noted.
Chong Kee Hong, CEO of Suntec Reit’s manager, claimed the effective divestment of the assets will decrease the Reit’s accumulation leverage ratio to beneath 40%, providing better flexibility for future acquisitions, unit buy-backs and/or resources distributions.
Under the divestment plan, the manager states the Reit will concentrate more on Singapore, granted the country’s macroeconomic and political consistency and the relative power of the Singapore dollar, specifically amidst economic unpredictability and high rising cost of living.
Located inside of North Sydney’s CBD, 177 Pacific Highway is a 31-storey Grade A commercial property development. The recently finished 21 Harris Street is a nine-storey, Grade An office complex in Pyrmont, west of Sydney’s CBD. Both are fully operated by the Reit.
At The Same Time, Suntec Reit keeps a 50% risk in 477 Collins Road, a 39-storey, premium-grade office space project referred to as Olderfleet, in Melbourne’s CBD.
This comes with a profile reconstitution to lower overseas exposure, beginning with Australia, hone its emphasis on the expanding Singapore portfolio and improve its resources structure.
Suntec Reit will be introducing official sales campaigns for 3 property business real estates in Australia, consisting of 177 Pacific Highway and 21 Harris Street in Sydney, and 477 Collins Street in Melbourne.
The supervisor included that Singapore’s business real estate market “continues to be favourable”, supported by limited brand-new supply and limited vacancy prices. It will continue to explore opportunities to strengthen Suntec REIT’s exposure in the city-state.
” This would also lower the earnings drag occurring from the high-interest rate environment in Australia and boost the Reit’s interest coverage ratio.”
