The manager of Suntec REIT, EST Trust Management, has proposed to issue $250 million fixed rate subordinated perpetual securities under its US$2 billion euro medium term securities programme, according to a bourse filing on June 10.

 

The perpetual securities will be perpetual in respect of which there is no fixed redemption date and will confer a right to receive distribution payments.

 

The rate of distribution for the perpetual securities from June 17, 2025 to June 17, 2030, or the first reset date is 4.48% per annum, and from the period from and including the first reset date and each reset date falling thereafter, the applicable reset rate of distribution.

 

This rate is equivalent to the prevailing five-year SORA-OIS plus the initial spread of 2.656%, subject to the benchmark discontinuation and replacement provisions set out in the pricing supplement.

 

The manager of the REIT says that the net proceeds arising from the issue of the perpetual securities will be used by Suntec REIT and its subsidiaries for refinancing of existing borrowings, including but not limited to the issuer&rsquo s $200 million fixed rate subordinated perpetual securities callable in October 2025, as well as general working capital and capital expenditure requirements of the group.

 

Its convention centre portfolio has yet to show signs of weakening as a result of the trade tariffs imposed by the US

 

[SINGAPORE] Office and retail tenants are expected to hold off on their expansion plans amid uncertainty over the impact of US tariffs, said the manager of Suntec real estate investment trust (Reit) : T82U -0.86%.

 

Speaking at the Reit&rsquo s financial results briefing for Q1 on Friday (Apr 25), Dawn Lai, chief operating officer of the manager, said that tenants have &ldquo become more cautious&rdquo as they are uncertain about the impact of the US&rsquo tariffs.

 

&ldquo We expect (expansionary tenants&rsquo ) decisions to be a bit more prolonged and delayed, and maybe they would decide to hold (expansion) off for a while,&rdquo she said.

 

Its rental reversion for office assets is projected to be between 1 and 5 per cent, while that for its retail assets has been pegged at between 5 and 10 per cent.

 

The unchanged guidance reflects the manager&rsquo s cautious outlook for the year.

 

Q1 results

The briefing was held a day after Suntec Reit posted its financial results for the first quarter ended Mar 31, 2025.

 

The Reit&rsquo s distribution per unit rose by 3.4 per cent to S$0.01563 for Q1, up from S$0.01511 in the same period a year earlier.

 

Revenue was up 3.4 per cent at S$113.5 million for the quarter, from S$109.8 million in the corresponding period in the previous year.

 

Distributable income also improved by 4.3 per cent due to the better performance and lower financing costs, it added.

 

The Reit&rsquo s Singapore office, retail and convention portfolios, as well as the UK portfolios, continued to deliver strong operating performances, noted the manager on Thursday.

 

Effect of tariffs to take time to show

Specific to Suntec Reit&rsquo s : T82U -0.86% office tenants, Lai said that decisions by tenants to relocate an office or to terminate a lease early will take time to be put into action.

 

&ldquo So we will probably not see the effect so soon,&rdquo she said.

 

She added that there continues to be inquiries for smaller office spaces under 5,000 square feet. The demand for smaller spaces is driven mainly by non-bank financial service firms such as wealth management and hedge fund companies.

 

Lower discretionary spending expected

As for its retail segment, the Reit manager said that retail sales is likely to stay subdued due to cautious consumer spending. Retailers are also projected to adopt a cautious expansion strategy amid the weaker economic outlook.

 

Chong Kee Hiong, the chief executive officer of the Reit manager, said that discretionary spending will be &ldquo the first to be hit&rdquo as a result of the tariffs.

 

For instance, consumers may cut back on items like apparel, or eat at food courts rather than restaurants.

 

Nevertheless, Chong said that the Singapore dollar could soften in the coming months, making it more expensive for consumers to spend overseas. This could have a positive effect on retail sales in Singapore in the coming months.

 

Convention centre&rsquo s performance to stay stable

In its outlook for the convention centre sector, the manager said that the uncertainty caused by the tariffs may force event organisers to tighten their budget for conferences. This may result in lower attendance for events.

 

However, Chong said that the manager has yet to observe any signs of the sector&rsquo s performance weakening due to the tariffs. No conference organiser has asked to delay or downsize their conferences because of the tariffs. There are also no signs, so far, that attendance would be affected, he said.

 

He expects performance for the Reit&rsquo s convention segment to remain stable this year.

Revenue is up 3.4% at S$113.5 million for the period

 

[SINGAPORE] Suntec Real Estate Investment Trust&rsquo s (Reit) distribution per unit (DPU) rose by 3.4 per cent to 1.563 Singapore cents for its first quarter ended Mar 31, 2025, from 1.511 cents in the same period a year earlier.

 

Revenue was up 3.4 per cent at S$113.5 million for the quarter, from S$109.8 million in the corresponding period in the previous year.

 

All properties &ndash except for 55 Currie Street, Adelaide &ndash registered stronger operating performance, said the manager in a business update on Thursday (Apr 24). Distributable income improved due to the better performance and lower financing costs, it added.

 

Net property income rose 5 per cent on the year to S$77.1 million for the quarter, from S$73.4 million.

 

Distributable income rose 4.3 per cent year on year to S$45.9 million, from S$44 million.

 

The distribution will be paid out on May 30, after the record date on May 5.

 

Chong Kee Hiong, chief executive of the manager, noted that its Singapore office, retail, and convention portfolios as well as the UK portfolios continued to deliver strong operating performances.

 

&ldquo Suntec Reit&rsquo s continual improvement in operating performance highlights the strong fundamentals of the properties,&rdquo he said. &ldquo In light of the global macroeconomic uncertainties, we remain focused on strengthening the operating performance of our properties.&rdquo

 

The manager of Suntec REIT has launched and priced $175 million 3.40% notes due 2031 for corporate purposes, refinancing of existing borrowings, financing/refinancing acquisitions among other reasons.

 

The notes will be issued under the US$2 billion Euro Medium Term Securities Programme established on Aug 15, 2013. DBS and UOB have been appointed as the joint lead managers for the issue of the notes. 

 

The notes are issued at an issue price of 100% of their principal amount in denominations of $250,000. They are expected to be issued on March 27, 2025 and will mature on March 27, 2031. 

 

The net proceeds will be used by Suntec REIT and its subsidiaries for general corporate purposes, refinancing of existing borrowings, financing or refinancing acquisition and/or investments and financing any asset enhancement works.

 

The issuance of the notes comes a month after the failed take over of the REIT by property tycoon Gordon Tang and his wife Celine, as their shareholding fell short of the 50% threshold as at the offer closing date on Feb 7. 

 

The offer was first made at $1.16 apiece on Dec 5, 2024, and later raised to $1.19 per unit. The offer closing date was postponed twice.