Chairman's Message

Dear Unitholders,

On behalf of the Board of ARA Trust Management (Suntec) Limited (“Board”), it is my pleasure to present to you the annual report of Suntec REIT for the financial year ended 31 December 2020 (“FY 2020”).

2020 was unprecedented, with the novel coronavirus (“COVID-19”) pandemic causing unforeseen disruptions to our daily lives and businesses. Throughout this challenging year, we worked closely with all our stakeholders to mitigate the impact caused by the pandemic. While our convention and retail businesses were most affected, this was mitigated by the resilient performance of our office portfolio in Singapore and Australia, as well as the income contribution from the newly acquired 21 Harris Street in Sydney and Olderfleet, 477 Collins Street in Melbourne, which received practical completion in end July 2020.

In December 2020, Suntec REIT made its maiden foray into the United Kingdom, with the acquisition of a 50.0% interest in two Grade A office buildings with ancillary retail (“Nova Properties”) located in the heart of Victoria, West End, London. This will further enhance the resilience, diversification and quality of our existing portfolio of high quality commercial assets.

FINANCIAL PERFORMANCE

Distributable income from operations in FY 2020 was S$209.2 million, S$27.5 million or 11.6% lower yearon- year. The rent assistance granted to retail tenants at Suntec City Mall, Marina Bay Link Mall and Southgate Complex and the absence of income contribution from Suntec Convention and as well as the absence of compensation from the Marina Bay Financial Centre Properties contributed to the decrease in distributable income from operations. This was mitigated by the better performance and contributions from the Australia office portfolio, stronger performance of One Raffles Quay as well as lower financing costs.

10.0% of the distributable income from operations amounting to S$10.3 million was retained in the first half of 2020, as we sought to achieve a balance between providing a reasonable return to unitholders, building a cash reserve and supporting our tenants. With signs of recovery in the retail business and the continued resilience of our office portfolio in Singapore and Australia, the S$10.3 million was fully distributed to unitholders in February 2021 together with the fourth quarter distribution.

Distribution per unit (“DPU”) of 7.402 cents for FY 2020 was 22.1% lower year-on-year due to the lower income from operations and the absence of capital distribution.

Ms Chew Gek Khim
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