Suntec Reit to divest three Australian assets, focus more on Singapore
Chong Kee Hong, CEO of Suntec Reit’s manager, stated the successful divestment of the possessions will reduce the Reit’s accumulation leverage ratio to below 40%, giving greater flexibility for future acquisitions, unit buy-backs and/or funding distributions.
Suntec Reit are going to be releasing official sales campaigns for three estate commercial real estates in Australia, making up 177 Pacific Highway and 21 Harris Street in Sydney, and 477 Collins Street in Melbourne.
According to a Sept 21 bourse declaration, the divestment strategy complies with a calculated review carried out by the Reit after a change in its sponsor.
Under the divestment plan, the supervisor states the Reit will concentrate a lot more on Singapore, granted the nation’s macroeconomic and political consistency and the connected power of the Singapore dollar, particularly amidst economic unpredictability and high inflation.
The divestments of the Australian investments are supported by “enhancing conditions in Australia’s funding markets and continued investors’ passions in high-quality, well-leased possessions with stable income streams”, the bourse declaration noted.
This is part of a portfolio reconstitution to reduce overseas presence, starting with Australia, sharpen its focus on the expanding Singapore portfolio and improve its capital structure.
Found within North Sydney’s CBD, 177 Pacific Highway is a 31-storey Grade A commercial development. The recently finished 21 Harris Street is a nine-storey, Grade An office building in Pyrmont, west of Sydney’s CBD. Both are fully managed by the Reit.
” This would certainly also reduce the revenues drag arising from the high-interest rate atmosphere in Australia and enhance the Reit’s interest coverage ratio.”
The manager included that Singapore’s commercial real estate market “stays favourable”, sustained by restricted new supply and tight vacancy rates. It will certainly continue to explore possibilities to enhance Suntec REIT’s presence in the city-state.
Meanwhile, Suntec Reit keeps a 50% claim in 477 Collins Road, a 39-storey, premium-grade office space development known as Olderfleet, in Melbourne’s CBD.
