Suntec REIT has reported a 3.7% year-on-year increase in its distribution per unit (DPU) for the first half of 2025, reaching 3.155 Singapore cents. This performance, however, fell slightly below expectations due to higher withholding tax in Australia, which impacted the bottom line by S$4m. The REIT’s Australia portfolio saw a notable 20.8% increase in net property income in the second quarter, attributed to a one-off A$10m compensation from a tenant in Sydney.
The Singapore segments of office, retail, and convention showed robust results, with Suntec City Office achieving a high occupancy rate of 99.5% and Suntec City Mall experiencing a positive rental reversion of 17.2% in the first half of 2025. The mall’s occupancy improved to 98.0% in the second quarter, supported by tourism and MICE activities. The upcoming completion of a link bridge to Guoco Midtown is expected to further boost weekday office crowd traffic.
In the UK, Suntec’s portfolio remained stable with a 100% occupancy for Nova properties, although The Minster Building’s occupancy dropped to 84.9%. Advanced negotiations with a financial institution could raise this to 94%. Meanwhile, Suntec’s cost of debt improved to 3.82% in Q2 2025, with interest coverage rising to 2.0x.
Looking ahead, Suntec REIT aims to divest S$100m of strata units at Suntec City Office in 2025 to lower gearing. The REIT maintains a “hold” recommendation with a target price of S$1.31, trading at a 39% discount to its net asset value per unit.
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