Table of Contents
- Background
- Management of Suntec REIT
- Suntec REIT Share Price And Other Key Data (T82U.SI)
- Suntec REIT Annual Report Highlights
- Suntec REIT Key Statistics for 2021
- Current Asset Under Management (“AUM”): Countries and Assets
a. Singapore
b. Australia
c. United Kingdom - REITs vs Co-Investment Opportunities
Background
Suntec Real Estate Investment Trust (Suntec REIT) was founded in 2004 and subsequently became listed on the SGX-ST on the 9th of December in the same year. Suntec REIT owns income-generating properties in the office and retail sectors, making it Singapore’s first composite REIT. Suntec REIT’s property portfolio largely consists of real estate assets in Singapore, Australia and the United Kingdom, totalling up to S$11.5 billion.
Management of Suntec REIT
Suntec REIT is managed by ARA Trust Management Limited, a subsidiary of ARA Asset Management Limited. ARA manages both listed and unlisted REITs, private equity funds and credit funds across 28 countries and operates real estate management teams across each of its markets to manage its real estate portfolio.
ARA Trust Management Limited seeks to deliver consistent returns to its shareholders and achieve long-term capital growth to provide desirable return rates for investors. ARA plans to achieve these goals through:
- Proactive Asset Management
ARA leverages on the strong areas of their existing property portfolio to optimise property performance and increase property value. - Strategic Accretive Acquisition
ARA sources and selects high-quality income-generating office and retail properties located in strategic areas. - Prudent Capital Management
ARA takes steps to make the most out of their capital through efficient capital allocation by tracking changes in interest rates and exchange rates, maximising returns on their investments.
Suntec REIT Share Price and Other Key Data (T82U.SI)
Suntec REIT Annual Report Highlights
Financial Highlights for Suntec REIT’s 2019 Financial Year
Suntec REIT Key Statistics for 2021
| Key Statistics | |
|---|---|
| Book Value Per Share | 2.09 |
| Price to Book Ratio | 0.72 |
| Market Cap Value/M | 4,250 |
| Shares Outstanding/M | 2,820 |
| Occupancy Rate | 98.7% (Office) 99.1% (Retail) |
| WALE (by NLA) | 3.94 |
| Weighted Average Debt Maturity (years) | 3.1 |
| Beta (5Yr Monthly) | 0.77 |
Current Asset Under Management ("AUM") Countries and Assets
Singapore
Location: 3, 5, 6, 7, 8 and 9 Temasek Boulevard, 1 Raffles Boulevard, Singapore
Description: Suntec City is a composite office and retail property located in the Marina Centre in the CBD area of Singapore.
Suntec City is currently valued at S$5.6 billion, made up of 1.3 million square feet of office space, 0.9 million square feet of retail space and 0.3 million square feet of convention space. The property has a high occupancy rate of 97.0% in their retail space and 93.3% in their office space, generating up to S$30.2 million annually.
Location: 1 Raffles Quay, Singapore
Description: One Raffles Quay is a landmark commercial development located between Marina Bay and Raffles Place, in the heart of the Singapore CBD. The property is made up of two office towers - the 50-storey North Tower and the 29-storey South Tower. Suntec REIT owns One Raffles Quay as a 99-year leasehold property, expiring in 2100.
One Raffles Quay is valued at S$1.3 billion as of 30th September 2020. It’s total net lettable area of 0.4 million square feet has a committed occupancy rate of 98.4%, generating S$6.9 million annually. The property was purchased at S$941.5 million and Suntec REIT currently holds a 33.3% ownership stake of the property, shared with Hongkong Land and Keppel REIT.
Read also: Keppel REIT Overview
Marina Bay Financial Centre (MBFC) Properties
Location: 8 Marina Boulevard, Singapore
Description: MBFC Properties is a large office property, with a small proportion of retail space, located at the heart of Marina Bay in Singapore. The property was purchased at S$1.4958 billion and Suntec REIT currently holds a 33.3% ownership stake of the property, shared with Hongkong Land and Keppel REIT.
Based on the most recent valuation in 2019, MBFC Properties is valued at S$1.7 billion, with 0.5 million square feet of office space and 0.03 square feet of retail space generating S$13 million in net income contribution each year. Because of the large companies occupying the office space, it has a 100% occupancy rate, with a slightly lower retail occupancy rate of 97.4%.
Location: 9 Penang Road, Singapore
Description: 9 Penang Road is a newly developed Grade A commercial property located near Orchard Road, consisting of eight floors of office space and one storey of retail space, spread across its two ten-storey towers.
The property was purchased at S$245.1 million as a 99-year freehold property, of which Suntec REIT has a 30% ownership share, shared with Haiyi Holdings and SingHaiYi Group. The property is currently valued at S$276 million with a total net lettable area of 0.2 million square feet and a 98.2% occupancy rate.
Australia
Read also: Investing in Australian Residential Real Estate
Location: 177 Pacific Highway, North Sydney, NSW 2060, Australia
Description: 177 Pacific Highway is a Grade A commercial property located in Sydney’s CBD. It is a freehold property wholly owned by Suntec REIT, purchased at S$457.5 million. The 31-storey building has a total net lettable area of 0.4 million square feet with a 100% occupancy rate. The property generates S$8.8 million in net property income annually and is currently valued at S$621.5 million.
Location: 21 Harris Street, Pymont NSW 2009, Australia
Description: 21 Harris Street is a Grade A office property located 2 kilometres from Sydney’s CBD. The newly developed 9-storey building has a total net lettable area of 0.2 million square feet, which has a committed occupancy rate of 68.7%.
The property was purchased at S$257.4 million as a freehold property, in which Suntec REIT has a 100% ownership interest, and is currently worth S$302.4 million after 18 months. The property generates an annual net property income of S$2.3 million.
Location: 40 and 60 City Road, 3 Southbank Avenue, Southbank, Melbourne, VIC 3006, Australia
Description: Southgate Complex is an integrated development property located along the Yarra River in Melbourne.
It consists of two Grade A office towers, the 25-storey HWT Centre and the 30-storey IBM Tower, as well as a 3-storey retail area and a 1,026 lot car park. The 0.35 million square feet of office space has a 100% occupancy rate, while the 0.05 million square feet of retail space has a 91.7% occupancy rate.
Suntec REIT purchased a 50% ownership interest in the freehold property for S$299.8 million. Southgate Complex is currently worth S$391.5 million as of the latest valuation on 31st December 2019, and makes an annual net income contribution of S$2.7 million.
Olderfleet, 477 Collins Street
Location: 477 Collins Street, Melbourne, VIC 3000, Australia
Description: Olderfleet is a 39-storey premium-grade office building located in the Melbourne CBD with key transportation connections to the rest of the city, with development completing in July 2020.
Suntec REIT purchased a 50% ownership stake in the freehold property in 2017 for A$414.2 million, with Mirvac holding the other half of the ownership. The property is currently valued at S$420.8 million. The 0.3 million square feet of office space has a 97.2% occupancy rate, producing S$3.0 million in net property income annually.
Location: 55 Currie Street, Adelaide, SA 5000, Australia
Description: 55 Currie Street is a 12-storey Grade A office property in Adelaide’s CBD, just 5 minutes from Adelaide railway station. 55 Currie Street is made up of 0.3 million square feet of office space, which has a 91.7% committed occupancy rate, generating S$3.0 million in net property income annually.
Suntec REIT purchased the freehold property in 2019 at a purchase price of S$138.9 million. They currently hold 100% ownership of the property, which is valued at S$145.8 million.
United Kingdom
Location: Nova Estate, Buckingham Palace Road and Bressenden Place, London SW1
Description: Nova Properties is an office and retail property located in London’s West End, near important landmarks such as Buckingham Palace and Westminster Abbey. The property is made up of two Grade A office buildings with ancillary retail spaces within.
Nova Properties’ 0.3 million square feet of combined retail and office space has a 100% committed occupancy rate. First purchased at £430.6 million, the asset is a leasehold property, with its lease expiring in 3062. Nova Properties is currently valued at S$776.1 million, with Suntec REIT holding 50% ownership of the property, making this their first property investment in the UK, with Landsec holding the other 50% ownership.
Read also: Investing in the UK Real Estate Market
REITs vs Co-Investment Opportunities
Large assets are often less accessible for investing in as an individual investor. Therefore, REITs and co-investment options both provide an opportunity for investors to invest in larger properties, making such investments more accessible. Both REITs and co-investments can provide returns in the form of dividends, paid out at specified times throughout the investment.
Read also: REITs or Real Estate Co-Investments?
However, REITs are a form of indirect investment since these investors invest in the REIT rather than directly investing in the property. As a result, they have little control over which properties their investments are going towards in a REIT. REITs investors also do not have much influence over the management or performance of the property.
Read also: An Overview of Investing in REITs
With co-investments as a form of direct investment, Accredited Investors are given the opportunity to invest in larger real estate assets by pooling their funds with other investors, often through a co-investment platform. Each investor selects which individual properties to invest in and have full flexibility on risk decisioning and investment quantums when constructing their real estate portfolio through the co-investment platform.
As such, investors are more directly involved in the decision making process for their own investments and can get access to institutional real estate assets which are not as accessible to individual investors. Through diversification, an investor is able to reduce the risk on his overall real estate investment portfolio.
Read also: Real Estate Co-Investment – The New Alternative
RealVantage is a real estate co-investment platform which seeks to provide investors with access to international property investments through co-investments. With RealVantage, investors are able to leverage on the team’s expert knowledge of the market and make wise investments, driven by carefully crafted investment strategies. Investors may invest directly in a thoroughly vetted selection of properties, while also enjoying hassle-free asset management services.
Find out more about real estate co-investment opportunities at RealVantage. Visit our team, check out our story and investment strategies.
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