Suntec Reit to divest three Australian assets, focus more on Singapore
According to a Sept 21 bourse declaration, the divestment plan follows a strategic evaluation accomplished by the Reit after a change in its sponsor.
The supervisor included that Singapore’s commercial property market “continues to be favourable”, supported by restricted brand-new supply and tight vacancy rates. It will certainly continue to explore opportunities to reinforce Suntec REIT’s visibility in the city-state.
Chong Kee Hong, CEO of Suntec Reit’s manager, said the effective divestment of the properties will decrease the Reit’s aggregate leverage ratio to beneath 40%, supplying better versatility for future purchases, unit buy-backs and/or resources distributions.
This comes with a portfolio reconstitution to lower foreign visibility, starting off with Australia, develop its emphasis on the expanding Singapore profile and boost its resources framework.
Under the divestment strategy, the supervisor says the Reit will concentrate more on Singapore, given the nation’s macroeconomic and political security and the relative power of the Singapore dollar, specifically amidst economic unpredictability and high rising cost of living.
Suntec Reit are going to be releasing official sales initiatives for 3 freehold commercial real estates in Australia, making up 177 Pacific Freeway and 21 Harris Street in Sydney, and 477 Collins Street in Melbourne.
At The Same Time, Suntec Reit holds a 50% stake in 477 Collins Street, a 39-storey, premium-grade workplace project called Olderfleet, in Melbourne’s CBD.
The divestments of the Australian assets are supported by “boosting conditions in Australia’s capital markets and continued financiers’ rate of interests in high-quality, well-leased properties with secure revenue streams”, the bourse filing noted.
” This would certainly also lower the earnings drag occurring from the high-interest rate setting in Australia and improve the Reit’s interest coverage ratio.”
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 building in Pyrmont, west of Sydney’s CBD. Both are totally operated by the Reit.
