Suntec Reit to divest three Australian assets, focus more on Singapore
Found inside of North Sydney’s CBD, 177 Pacific Highway is a 31-storey Grade A commercial development. The recently accomplished 21 Harris Street is a nine-storey, Grade An office building in Pyrmont, west of Sydney’s CBD. Both are completely owned by the Reit.
Under the divestment plan, the supervisor says the Reit is going to focus more on Singapore, given the country’s macroeconomic and political security and the associated power of the Singapore dollar, specifically amid economic uncertainty and high inflation.
According to a Sept 21 bourse filing, the divestment strategy complies with a strategic review undertaken by the Reit after a modification in its sponsor.
” This would certainly also lower the incomes drag developing from the high-interest rate atmosphere in Australia and improve the Reit’s interest plans ratio.”
The divestments of the Australian assets are supported by “improving conditions in Australia’s funding markets and continued financiers’ interests in premium, well-leased properties with stable earnings streams”, the bourse declaration noted.
The manager included that Singapore’s industrial property market “continues to be favourable”, supported by limited brand-new supply and tight vacancy rates. It will certainly continue to explore chances to strengthen Suntec REIT’s exposure in the city-state.
This comes with a profile reconstitution to lower foreign exposure, starting with Australia, develop its focus on the growing Singapore profile and enhance its capital framework.
Meanwhile, Suntec Reit maintains a 50% risk in 477 Collins Road, a 39-storey, premium-grade workplace project called Olderfleet, in Melbourne’s CBD.
Suntec Reit are going to be launching formal sales efforts for 3 property commercial real properties in Australia, consisting of 177 Pacific Freeway and 21 Harris Street in Sydney, and 477 Collins Street in Melbourne.
Chong Kee Hong, CEO of Suntec Reit’s manager, said the successful divestment of the assets will lower the Reit’s aggregate leverage ratio to below 40%, delivering better flexibility for future acquisitions, unit buy-backs and/or funding distributions.
