It has almost been 2 years since I divested Suntec REIT. Recently, I visited Suntec City mall and I decided to take a look how Suntec REIT is performing over the 2 years. In the latest 4Q2019 financial results, gross revenue increased by 3.5% to S$96.7 million as compared with 4Q2018. The improve in revenue was due to contributions from 55 Currie Street (acquired in September 2019) as well as increase in retail and office revenue from Suntec City which was partially offset by lower revenue from Suntec Convention.
The below bar chart shows the improvement in gross revenue broken down by the assets under Suntec REIT. The lower revenue contribution from 177 Pacific Highway was due to weakened Australian Dollar (AUD).
4Q2019 Financial Results
| 4Q2019 (S$’000) | 4Q2018 (S$’000) | YoY(%) | |
| Gross Revenue | 96,718 | 93,453 | 3.5% |
| Net Property Income | 63,269 | 60,726 | 4.2% |
| Distributable Amount | 65,986 | 69,459 | (5.0)% |
| Distribution Per Unit (“DPU”) (cents) | 2.347 | 2.590 | (9.4)% |
FY2019 Financial Results
| FY2019 (S$’000) | FY2018 (S$’000) | YoY(%) | |
| Gross Revenue | 366,730 | 363,504 | 0.9% |
| Net Property Income | 236,187 | 240,977 | (2.0)% |
| Distributable Amount | 262,730 | 266,811 | (1.5)% |
| Distribution Per Unit (“DPU”) (cents) | 9.507 | 9.988 | (4.8)% |
Occupancy
The overall committed occupancy for Singapore office portfolio stood at 99.1% while its Australia office portfolio stood at 97.8%
The occupancy for the retail mall stood at 99.6% as of 31st December 2019.
Debt
The gearing ratio stood at 37.7% and weighted average debt maturity stood at 3.06 years. My personal opinion is that there is still room for further acquistions since the maximum gearing allowed is 45%.
Current Dividend Yield
I am using 5 years chart so we know how far the current share price has fallen. The current share price is not super attractive but at a reasonable range. Given the full year distribution of 9.507 cents pay out in FY19, this translate to a current dividend yield of 5.25% which is reasonable (Based of my criteria for a least 5% yield).
You might probably be worried given that shopper traffic at retail malls are affected by the COVID-19 virus. Income contribution from Retail segment only makes up 27% of its total income contribution.
The bulk of income comes from the office segment. The passing rent for Suntec City has picked up over the past few quarters and office segment are less likely to be impacted by the COVID-19 virus situation (at least for now).
