Suntec Reit to divest three Australian assets, focus more on Singapore

Located inside 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 managed by the Reit.

The divestments of the Australian assets are supported by “boosting conditions in Australia’s funding markets and proceeded capitalists’ interests in high-quality, well-leased assets with secure income streams”, the bourse filing noted.

Suntec Reit will be launching official sales initiatives for three freehold business properties in Australia, comprising 177 Pacific Freeway and 21 Harris Street in Sydney, and 477 Collins Street in Melbourne.

Coastal Cabana showflat location

Chong Kee Hong, CEO of Suntec Reit’s manager, said the effective divestment of the assets will decrease the Reit’s aggregate leverage ratio to below 40%, delivering higher versatility for future procurements, unit buy-backs and/or capital distributions.

The supervisor included that Singapore’s industrial real estate market “stays favourable”, sustained by limited brand-new supply and limited vacancy prices. It will certainly continue to explore possibilities to strengthen Suntec REIT’s presence in the city-state.

This is part of a portfolio reconstitution to decrease foreign presence, starting with Australia, develop its emphasis on the expanding Singapore profile and boost its resources structure.

Meanwhile, Suntec Reit keeps a 50% risk in 477 Collins Street, a 39-storey, premium-grade workplace project called Olderfleet, in Melbourne’s CBD.

Under the divestment strategy, the manager claims the Reit will concentrate more on Singapore, provided the nation’s macroeconomic and political security and the relative strength of the Singapore dollar, specifically amid economic unpredictability and high rising cost of living.

According to a Sept 21 bourse data, the divestment plan follows a strategic assessment accomplished by the Reit after an adjustment in its sponsor.

” This would certainly also lower the incomes drag developing from the high-interest rate environment in Australia and enhance the Reit’s interest plans ratio.”