Suntec City to undergo S$410m revamp

Suntec Real Estate Investment Trust (Suntec REIT) has announced a S$410 million asset enhancement initiative (AEI) for its flagship asset, Suntec City.

The AEI is scheduled to start in mid-2012, and will comprise a S$230 million capital expenditure in remaking Suntec City Mall and a further S$180 million on Suntec Singapore International Convention and Exhibition Centre (Suntec Singapore).

Suntec REIT holds an effective interest of 60.8 per cent in Suntec City. On completion in mid-2015, the development will offer almost 1 million sq ft of retail lettable space.

In a statement released on Monday, the REIT manager said Suntec City Mall’s net property income is expected to increase by 33 per cent or S$23 million. This would represent a 10.1 per cent return on investment for unit holders and an 84 per cent increase in capital value over capital expenditure.

Mr Yeo See Kiat, Chief Executive Officer of ARA Trust Management (Suntec) Ltd, which manages Suntec REIT, said: “During the execution of the AEI works, we would use part of the sales proceeds from Chijmes to mitigate the temporary dip in DPU.”

Last week, Suntec REIT announced that it entered into a property sale agreement with PRE 8 Investments Pte Ltd for the sale of Chijmes at a price of S$177 million or S$2,218 psf on net lettable area.

Source : Channel NewsAsia – 31 Oct 2011

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