My first foray into REITs was to purchase Suntec Reits. During the early Mar 09, sentiments were at all time lows and I was really seeking to purchase defensive equities to hedge myself during an economic downturn. With some guidance from my stock broker as well as some personal research, I started with 2 lots of Suntec Reits.
This first post on Suntec REIT is to give a reader a basic understanding of the Suntec REIT business model.
Introduction
Suntec REIT deals mainly with office and retail properties. The properties under its belt include Suntec City Mall, Suntec City Office Towers, Park Mall, Chjimes an Raffles Quay. As of March 2009, Suntec REIT has $5.4 billion of assets under management, comprising approximately 1.9 million sq ft of office space and 1.0 million sq ft of retail space.
Accessible location being its key advantage.
The attractiveness of the properties managed by Suntec REITs is that the properties are all located in the Central Business District. Park Mall is located along Orchard Road, right next to Dohby Ghaut MRT and the NEL as well. Chjimes is a retail, F&B outlet that is recognised as a UNESCO site and has strong heritage value. Suntec City is Singapore 2nd largest retail mall and has 1.3 million Prime grade A office space of 1.3 mil ft. Finally, One Raffles Quay is locate at the Heart of CBD and has excellent connectivity to Raffles Place MRT and it has strong tenant base comprising of international and local blue chip financial institutions.
The business structure of SUNTEC REIT is as follows:
Ever since its inception, Suntec REIT has produced consistent growth in its distribution per unit and this is a sign that the business model is sustainable and scalable.
That is all for the first post on Suntec REIT. The next post will discuss about macro and business outlook for the REIT and highlights some of the key challenges facing the compay in the short term.
No comments:
Post a Comment