Goodbye Suntec REIT

Suntec Logo

I do not know why but without much hesitation, I have sold off Suntec REIT today. Total profit was 54.3%. If I include the dividends collected over the years, total profit was 105%. I have sold off Suntec REIT not because of its slight decline in DPU in 2Q2018 but because it only makes up only 2% of my entire stock portfolio.

I invest in REITs mostly for their dividends and we all know that the more units we held, the more distribution we get every quarter from the REITs. Since the share price of Suntec REIT has appreciated much over the years since IPO, selling it seems to be the right decision. I can invest the money from the sale into other REITs. Yes, I am going to do that but I have yet to make up my mind which REIT to invest in using the capital gained from the sale.

Based on the historical distribution of 10.005 cents in FY17 and current price of S$1.92, the dividend yield is 5.21%. Personally, I felt the current dividend yield is low as compared to other REITs, so if you intend to invest into Suntec REIT, you should wait for the correct price to enter.

2Q2018 Financial Results

For 2Q 18, Suntec REIT’s gross revenue of S$90.5 million was 3.7% higher year-on-year. This was mainly due to higher contribution from Suntec Singapore and Suntec City mall, partially offset by lower contribution from Suntec City office as a result of transitory downtime from replacement leases.

The net property income of S$60.7 million was 2.2% higher year-on-year which was similarly due to higher contributions from Suntec Singapore and Suntec City mall, partially offset by lower contribution from Suntec City office.

2QFY18

(S$’000)

2QFY17

(S$’000)

Change
Gross Revenue 90,521 87,305 3.7%
Net Property Income 60,719 59,417 2.2%
Distributable Income 66,009 66,033 0.0%
Distribution Per Unit (“DPU”) (cents) 2.474 2.493 (0.8%)

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.