SUNTEC Real Estate Investment Trust (Suntec Reit) is planning to buy about one million square feet worth of office units in the Suntec City Office Towers that it does not currently own, as part of its plans to increase its exposure to the office market here. ARA Trust Management (Suntec) Ltd, the manager of Suntec Reit, said over the weekend that it has launched an acquisition programme to buy these units. It has appointed Suntec City Development Pte Ltd as its agent to source for the acquisitions.
ARA will buy the strata office units in Suntec City Office Towers not presently owned by Suntec Reit. The trust currently owns about 1.24 million sq ft of strata office units in the office towers; the remaining 1.05 million sq ft of strata office units are owned by other subsidiary proprietors. ARA said the acquisitions will allow Suntec Reit to increase its exposure to the local office market and consolidate its core assets at Suntec City. ‘As a key beneficiary of the robust Singapore office property market, the enlarged portfolio post-acquisitions will provide further potential for improved income and value through organic rental growth,’ ARA said yesterday.
It also added that the programme is very preliminary at this stage, and that it will announce further details of the acquisitions as and when it is deemed appropriate. In the meantime, it is advising Suntec Reit unitholders to exercise caution when dealing in the units of Reit and to refrain from taking any action in respect of their units which may be prejudicial to their interests.
Suntec Reit in July reported distributable income of $24.4 million for the third quarter ended June 30, up 21.1 per cent from the year-ago period. Its gross revenue rose 32.7 per cent to $43.9 million. It said then that its main asset, Suntec City, benefited from higher rents due to increased office occupancy and higher revenue from atrium spaces, push carts, kiosks and media spaces.
Source : Business Times - 25 Sep 2006
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