Suntec REIT Q2 DPU slips, to buy 50% in prime Melbourne property

Suntec will acquire a 50 percent stake in Olderfleet, 477 Collins Street.

Suntec REIT
Suntec REIT website.

Suntec Real Estate Investment Trust on Wednesday reported a 0.3 percent drop in its quarterly distribution per unit and said it would buy half-share in a prime property in Australia from Mirvac Group for A$414.17 million.

Suntec will acquire a 50 percent stake in Olderfleet, 477 Collins Street, a freehold land and office tower under development.

Property developer Mirvac will continue as co-owner of the 40-storey tower, located along Melbourne's prime commercial address, Collins Street, Suntec REIT said in a statement.

The deal, which will be fully funded by debt, will expand Suntec REIT's footprint in the Asia-Pacific region, boost distributable income and enhance geographical diversification.

Suntec's distribution per unit fell to 2.49 cents in the second quarter compared to 2.50 cents in the corresponding period last year.

Total revenue gained 11 percent to $87.3 million in the three months ended June 30.

"Our assets in Australia, 177 Pacific Highway and Southgate Complex contributed to our robust performance this quarter," Chief Executive Officer Chan Kong Leong said.

Suntec's Singapore office portfolio achieved an overall committed occupancy of 98.8 percent as at 30 June, 2017.

Shares of the company lost 0.26 percent to S$1.925 on the Singapore Exchange.