Further Expansion In London
Analysts: Jonathan Koh, CFA   Tel: (65) 6590 6620

  • Acquisition of The Minster Building. Suntec REIT has acquire a 100% interest in The Minster Building, a Grade A 999-year leasehold office building with ancillary retail located in the heart of City of London, for an agreed value of £353.0m (S$667.2m). It has committed occupancy of 96.7%. The property provide income yield of 4.5% and has long WALE of 12.3 years. It is a multi-tenanted office building with a diversified tenant mix anchored on Technology, Media & Telecommunications (31.9% of NLA), Financial Services (35.6% of NLA) and Real Estate Services (13.9% of NLA). The acquisition comes with 2-year income guarantee for vacant spaces (3% of NLA) and retail spaces (12% of NLA) and 1-year income guarantee for co-working spaces (13% of NLA).
  • The acquisition is funded by divestments proceeds (S$280m), GBP loan (£175m equivalent to S$330.8m) and perpetual securities (S$70m). It is estimated to provide DPU and NAV accretions of 3.6% and 0.7% respectively for pro forma FY20. The acquisition is expected to be completed in Jul 21.
  • Divestment of strata titles at Suntec City Office. Suntec REIT has divested 78,491sf of strata units at Suntec City Office (1.9% of share value in the entire Suntec City Development) for S$197.0m or S$2,510psf. The exit net property income yield was attractive at 3.1%. It will recognised net gain on divestment of S$13.9m. The divestment is expected to be completed in 3Q21.