Suntec Reit to divest three Australian assets, focus more on Singapore
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 higher adaptability for future acquisitions, unit buy-backs and/or resources distributions.
” This would certainly also minimize the revenues drag arising from the high-interest rate environment in Australia and improve the Reit’s interest coverage ratio.”
The divestments of the Australian assets are supported by “boosting conditions in Australia’s funding markets and proceeded investors’ interests in top notch, well-leased properties with secure earnings streams”, the bourse filing noted.
The manager included that Singapore’s commercial real estate market “continues to be favourable”, sustained by limited brand-new supply and tight vacancy rates. It will remain to explore opportunities to reinforce Suntec REIT’s exposure in the city-state.
Suntec Reit are going to be releasing official sales initiatives for three property commercial real estates in Australia, making up 177 Pacific Freeway and 21 Harris Street in Sydney, and 477 Collins Street in Melbourne.
Located within North Sydney’s CBD, 177 Pacific Highway is a 31-storey Grade A commercial property development. The just recently completed 21 Harris Street is a nine-storey, Grade An office complex in Pyrmont, west of Sydney’s CBD. Both are fully owned by the Reit.
This comes with a portfolio reconstitution to lower foreign presence, beginning with Australia, hone its emphasis on the expanding Singapore account and boost its resources framework.
Under the divestment strategy, the supervisor says the Reit will concentrate more on Singapore, granted the nation’s macroeconomic and political stability and the relative power of the Singapore dollar, particularly amidst economic unpredictability and high rising cost of living.
At The Same Time, Suntec Reit keeps a 50% stake in 477 Collins Street, a 39-storey, premium-grade workplace project called Olderfleet, in Melbourne’s CBD.
According to a Sept 21 bourse filing, the divestment strategy complies with a strategic evaluation undertaken by the Reit after a modification in its sponsor.
