Screenshot from Suntec REIT Financial Result cover slide.
Suntec REIT reported its FY2025 results with a 13.6% year-on-year increase in distribution per unit (DPU), despite slight declines in committed office occupancies across Singapore (-0.5%), Australia (-0.3%), and the UK (-2.6%). The retail side, mainly led by Suntec City Mall, saw a 1.2% rise in retail occupancy, boosting gross revenue by 2.9% and net property income by 2.1%.
On the capital management front, the REIT reduced its aggregate leverage from 42.4% to 41.5%, increased its interest coverage ratio from 1.9x to 2.1x, and lowered all-in financing costs from 4.06% to 3.71%, aided by lower Q4 2025 interest rates. Net asset value declined slightly from SGD 2.05 to SGD 2.03 due to lower Australian property valuations.
The Bedokian’s Take
Although lower finance costs were not the primary factor, they still contributed noticeably to the rise in DPU. Reviewing the statements of total return, post-tax returns increased by approximately SGD 44,141,000 between FY 2024 and FY 2025 (from SGD 136,154,000 to SGD 180,295,000). Out of this, around SGD 22,625,000 (from SGD 154,588,000 to SGD 177,213,000) was linked directly to reduced finance costs.
The impact of declining interest rates is gradual because much of the debt was taken out when rates were higher. With an overall decrease in Suntec REIT's finance costs of about 35 basis points, it seems we are starting to see the initial effects of the rate reductions initiated by the U.S. Federal Reserve in September 2024. Depending on the nature of their debt structures—whether fixed or floating—other REITs may experience increased DPUs when they release their financial results in the near future. This trend could indicate the beginning of a broader REIT recovery.
Disclosure
The Bedokian is vested in Suntec REIT
All figures are derived from Suntec REIT Financial Result for 2H and Financial Year ended 31 Dec 2025 (dated 22 Jan 2026).
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