Suntec City Mall makeover fails to work wonders for Suntec REIT

Final rents failed to meet targets.

The completion of Suntec City Mall’s makeover unfortunately coincided with a downturn in Singapore’s retail market, with stabilized rents missing Suntec REIT’s original target.

According to Barclays, rents at Suntec City Mall stood at $12.03psf pm in Q3, which is 4.4% below Suntec’s original target of $12.59psf pm.

Although rents were marginally lower than target, overall committed occupancy in Q3 was sequentially higher at 96.4%, from 95.3% in Q2 and 93.6% in Q1. Suntec City Mall Phase 3 started operating in June 2015.

While rents at Suntec City Mall are falling, the same could not be said for the REIT’s office segment. Suntec City Office Towers were more resilient, with leases secured at an average rent of $9.21psf pm, up from $9.14psf pm in Q2. With passing rent of about $8 for its Suntec City Office, the manager remains positive on rent reversions for the rest of 2015.