Suntec REIT strengthens Singapore focus with planned Australia sales

The divestments are expected to cut leverage below 40% and reduce interest costs.

Suntec REIT plans to focus on its Singapore portfolio whilst reducing overseas exposure, starting with the sale of three properties in Australia.

Suntec Trust Management Limited, the manager, said in a bourse filing that Singapore remains a key market because of limited new commercial property supply and tight vacancy rates.

It will launch formal sale campaigns for 177 Pacific Highway and 21 Harris Street in Sydney, and 477 Collins Street in Melbourne, following a strategic review conducted after a change in sponsor.

Proceeds from the Australian divestments are expected to reduce its aggregate leverage ratio to below 40%.

The reduction will provide headroom to support future acquisition opportunities, unit buy-back, and/or capital distribution, said Chong Kee Hiong, CEO of the manager.

The sales are also expected to reduce the impact of high interest rates in Australia and improve the REIT’s interest coverage ratio.

However, the manager cautioned that there is no assurance that any binding agreement or transaction will materialise.

The REIT owns interests in properties including Suntec City, One Raffles Quay, and Marina Bay Financial Centre in Singapore, as well as assets in Australia and London.

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