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The London property is The Minster Building – an 11-storey Grade A office development that comes with ancillary retail space. It was built in 1990 and refurbished in 2018. Photo: Savills Singapore
Suntec REIT has agreed to divest a portfolio of strata units at Suntec City Office for $197 million and acquire a Grade A office building in London for £353 million (S$667.2 million).
In an SGX filing, the REIT revealed that the Suntec City Office strata units are being divested at an 8.9% premium over the $180.9 million independent valuation for the 78,491 sq ft space, and that its net gain on the divestment stands at $13.9 million.
“The net property income yield was 3.1%,” it added.
The sale of the Suntec City office portfolio – comprising one floor at Suntec Tower 1 as well as five floors at Suntec Tower 2 – was brokered by Savills Singapore.
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Meanwhile, the London property is The Minster Building – an 11-storey Grade A office development that comes with ancillary retail space. It was built in 1990 and refurbished in 2018.
Chong Kee Hiong, Chief Executive Officer of the REIT’s manager, shared that the building has an “income yield of 4.5% and long weighted average lease expiry of 12.3 years”.
It has an overall committed occupancy of 96.7%, with the office component 96.2% leased to quality office tenants from diversified sectors, while the ancillary retail space is fully leased.
“The Grade A office development is a strategic fit with Suntec REIT’s existing portfolio and will enhance the resilience, diversification and income stability of Suntec REIT’s portfolio,” said Chong.
He added that the divestment of the Suntec City Office strata units, the recent sale of 9 Penang Road and the acquisition of The Minster Building “is the result of our active portfolio management to enhance unitholders’ value”.
“The proceeds from divestments and the recent perpetual securities issuance have improved our financial flexibility and enabled us to pursue growth opportunities for high quality and accretive assets in good locations,” he said.
After the divestment and acquisition, Suntec REIT’s assets under management will increase from $11.5 billion to $11.7 billion across 10 properties in the United Kingdom, Australia and Singapore.
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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this story, email: victorkang@propertyguru.com.sg
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