Suntec City Phase 3 fails to live up to its predecessors' strength

Rents fell short of targets.

Suntec City Phase 3 failed to live up to the leasing strength of its predecessors, with committed passing rents falling slightly short of management's targets.

Barclays noted that Suntec City Phase 3 achieved committed rents of $12.15 psf pm (on a stabilised basis) which was 3.5% short of its original target of S$12.59.

Its occupancy rate stood at 93.6%, compared to 100% for Phase 1 and 99.4% for Phase 2.

“Suntec City Phase 3 progressed slowly on competition and consolidation by retailers to cope with increasing business and manpower costs. Stabilised rents have also come off from the initial targeted S$12.59psf pm to S$12.15. We do not see much growth beyond FY17 after Suntec City’s makeover, and think that maintaining the stabilised average rent of S$12.15psf pm of Suntec City mall may be challenging given its big size and competition from nearby and suburban malls,” said Barclays.