Refinancing tops Suntec Reit agenda

Posted by luxuryasiahome on October 31, 2008
Q4 distribution income surges 44.5% to $43.9m
WITH credit concerns looming over the market, refinancing is now top of the agenda for Suntec Real Estate Investment Trust (Reit).
‘While we have no major financing needs in the next 12 months, we are keenly aware of the current global financing crisis and liquidity crunch,’ said Yeo See Kiat, CEO of Suntec Reit manager ARA Trust Management (Suntec).
‘Refinancing of our $700 million CMBS loan due in December 2009 is one of our key priorities.’
For FY2009, Suntec Reit has debts of $40 million, $85 million and $700 million maturing in April, May and December respectively. Its gearing ratio at Sept 30 was 31.9 per cent.
But refinancing should not pose a major problem, Mr Yeo said. ‘We have got a good partner in Cheung Kong. The financial institutions know who we are.’
ARA Trust Management (Suntec) is linked to Cheung Kong Group, a major Hong Kong conglomerate.
Mr Yeo was addressing financing concerns at a briefing on Suntec Reit’s results for its fourth quarter ended Sept 30.
It reported a 44.5 per cent year-on-year surge in distribution income to $43.9 million. This drove a 34.6 per cent jump in distribution per unit (DPU) to 2.854 cents.
With an annualised DPU of 11.353 cents, Suntec Reit’s distribution yield was 17.6 per cent based on the closing unit price of 64.5 cents on Oct 29.
According to Suntec Reit, its office portfolio continued to enjoy positive rental reversion during the quarter. The committed occupancy rate at Sept 30 was 99.3 per cent.
Suntec Reit has acquired about 61,500 sq ft of Suntec City strata-titled office space, but is likely to put such growth on hold given today’s business climate, Mr Yeo said.
Also shelved is the redevelopment of Park Mall, he added.
The project could be postponed for one to two years and reviewed when conditions change.
Suntec Reit’s retail portfolio enjoyed an occupancy rate of 99.6 per cent at Sept 30.
Suntec City Mall, Park Mall and Chijmes all saw higher committed passing rents compared with a year earlier.
Investors pushed Suntec Reit’s unit price up 4.5 cents yesterday to close at 69 cents.
Source : Business Times - 31 Oct 2008