Suntec REIT Annual Report for FY 2010

passion 

TO DELIVER 

SUNTEC REAL ESTATE INVESTMENT TRUST 

Annual Report 2010

PASSION TO DELIVER 

Suntec reit annual report 2010 

1 

About Suntec REIT 

Listed on 9 December 2004 on Singapore Exchange Securities Trading Limited (the “SGX-ST”), 

Suntec Real Estate Investment Trust ("Suntec REIT") is the first composite REIT in Singapore, owning 

income-producing real estate that is primarily used for retail and/or office purposes. 

As at 31 December 2010, Suntec REIT’s portfolio comprises office and retail properties in Suntec 

City, Park Mall, Chijmes, a one-third interest in One Raffles Quay and a one-third interest in 

Marina Bay Financial Centre Towers 1 and 2 and the Marina Bay Link Mall, all strategically located 

in the growth corridors of Marina Bay and the Civic and Cultural District within Singapore’s central 

business district. Suntec REIT also owns a 20 percent interest in Suntec Singapore International 

Convention & Exhibition Centre. 

Suntec REIT is managed by an external manager, ARA Trust Management (Suntec) Limited 

(the "Manager"). The Manager is focused on delivering regular and stable distributions to Suntec 

REIT’s unitholders, and to achieve long-term growth in the net asset value per unit of Suntec REIT, 

so as to provide unitholders with a competitive rate of return on their investment. 

About ARA Trust Management 

(Suntec) Limited 

The Manager is a wholly-owned subsidiary of ARA Asset Management Limited (“ARA”), a real 

estate fund management company listed on the Main Board of the SGX-ST, and is an affiliate of 

the multinational conglomerate Cheung Kong Group. 

ARA currently manages REITs listed in Singapore, Hong Kong and Malaysia with a diversified 

portfolio spanning the office, retail and industrial/office sectors, as well as private real estate 

funds investing in real estate in Asia. ARA also provides real estate management services, 

including property management services, convention & exhibition services and corporate 

finance advisory services. As at 31 December 2010, ARA's total assets under management was 

approximately S$16.9 billion. 

The Manager is responsible for the management and administration of Suntec REIT, as well as the 

implementation of Suntec REIT’s strategic long-term growth. 

Contents 

01 About Suntec REIT 

02 Mission Statement 

04 Year In Review 

06 Chairman’s Report 

08 Financial Highlights 

09 Unit Performance 

12 Board Of Directors 

18 Management Team 

24 Manager’s Report 

30 Property Portfolio 

50 Market Report 

52 Investor Communications 

54 Corporate Governance 

64 Financial Contents

2 



Our Mission 

Forging ahead to create, provide 

and deliver premium value to all 

stakeholders of Suntec REIT



3 

In another landmark year, Suntec REIT has 

demonstrated its strength and its 

passion to deliver. With the strategic investment 

in one of Singapore’s iconic commercial properties, 

Suntec REIT has successfully grown its portfolio 

of premier real estate assets to be 

one of Singapore’s largest commercial REITs. 

This marks a new milestone in our continuing 

growth and is a clear testament to our commitment 

in delivering long-term value for our unitholders.

4 



Year in Review 

S$7.0b 

ASSETS UNDER 

MANAGEMENT 

3.5m sq ft 

Portfolio NET 

LETTABLE AREA 

January 

2010 

February 


• Change of address of Unit 

Registrar. 

June 


• Issue of fifth tranche of 

34,500,362 deferred units. 

April 


July 


• Achieved distribution income 

of S$45.9 million for the period 

1 April 2010 to 30 June 2010. 

DPU for the quarter amounted 

to 2.528 cents. 


of S$47.8 million for the 

period 1 October 2009 to 

31 December 2009. Distribution 

per unit ("DPU") for the quarter 

amounted to 2.886 cents. 

• Advance distribution of 2.568 

cents pursuant to the private 

placement of 128,500,000 new 

units in Suntec REIT (“New 

Units”) at an issue price of 

S$1.19 per New Unit. 

• Unitholders approved all 

resolutions tabled at the Suntec 

REIT’s inaugural annual general 

meeting held on 15 April 2010. 

• Unitholders approved the 

resolution tabled at the Suntec 

REIT’s extraordinary general 

meeting held on 15 April 2010 

in relation to the form of the 

payment of the Manager's asset 

management fee. 



1 January 2010 to 31 March 2010. 

DPU for the quarter amounted 

to 2.513 cents. 

October 


• Suntec REIT conferred SIAS 

“Most Transparent Company” 

award 2010 (Runner-Up, 

REITs Category). 

• Suntec REIT secured S$700 million 

term loan facility. 

• Announced the proposed 

acquisition of a one-third interest 

in Marina Bay Financial Centre 

Towers 1 and 2 and the Marina Bay 

Link Mall (the “MBFC Properties”).



5 

98.8% 

office committed 

occupancy 

98.0% 

retail committed 

occupancy 



1 July 2010 to 30 September 

2010. DPU for the quarter 

amounted to 2.502 cents. 

December 


• Appointment of Mr. Chen 

Wei Ching, Vincent as 

Independent Director and 

audit committee member. 

November 


• Completion of the acquisition of 

a one-third interest in the MBFC 

Properties on 9 December 2010. 

• Issue of the last tranche of 

34,500,360 deferred units. 

• Moody's corporate family rating 

for Suntec REIT revised to Baa2, 

with Rating Outlook restored 

to Stable. 

• Unitholders approved the 

resolution tabled at the Suntec 

REIT’s extraordinary general 

meeting held on 26 November 

2010 in relation to the proposed 

acquisition of the MBFC Properties. 

• Launch of private placement 

of 313,000,000 new units in 

Suntec REIT (the “Private 

Placement”), which was 3.1 times 

oversubscribed. 

• Advance distribution of 

1.723 cents pursuant to 

the private placement of 

313,000,000 new units in 

Suntec REIT (“Placement Units”) 

at an issue price of S$1.37 per 

Placement Unit. 

• Change in Company Secretary.

6 

PASSION Suntec reit TO DELIVER 

Suntec annual reit report annual 2010report 2010 

With the distribution per unit of 9.859 cents for 

FY 2010, the average annual return for Suntec REIT 

unitholders was 14.7% since listing



7 

Chairman’s Report 

We have further strengthened our foothold in the Marina Bay 

precinct, underpinned by a strong 2.4 million sq ft office portfolio 

and 1.1 million sq ft retail portfolio strategically located in the 

heart of Singapore’s Central Business District 

Dear Unitholders, 

On behalf of the Board of ARA Trust 

Management (Suntec) Limited, the 

manager of Suntec REIT (the “Manager”), 

I am pleased to present the annual report 

of Suntec REIT for the financial year 

ended 31 December 2010 ("FY 2010"). 

2010 marked yet another significant 

year for Suntec REIT. During the year we 

acquired a one-third interest in the Marina 

Bay Financial Centre Towers 1 and 2 and 

the Marina Bay Link Mall (the “MBFC 

Properties”) and successfully secured more 

than S$2.2 billion of financing. 

With the strong recovery of the Singapore 

economy in 2010, Suntec REIT’s distribution 

income for FY 2010 was S$182.5 million, 

giving unitholders a distribution per unit 

of 9.859 cents or an annual yield of 6.6% 

for the year. 

Acquisition of an Iconic Landmark 

Development 

In December 2010, we acquired a onethird 

interest in the MBFC Properties at a 

purchase price of S$1,495.8 million with 

income support (the “MBFC Acquisition”). 

The net effective price was S$2,400 psf 

excluding income support. 

The Marina Bay Financial Centre is an 

iconic landmark development located in 

the heart of Singapore’s new business 

and financial district. With the MBFC 

Acquisition, we have further strengthened 

our foothold in the Marina Bay precinct, 

underpinned by a strong 2.4 million sq ft 

office portfolio and 1.1 million sq ft retail 

portfolio strategically located in the heart 

of Singapore’s central business district. 

In FY 2010, Suntec REIT has grown its assets 

under management from approximately 

S$5.2 billion to approximately S$7.0 

billion, to be one of Singapore’s largest 

commercial REITs. 

Prudent and Proactive Capital 

Management 

In October 2010, we entered into a S$700 

million term loan facility to refinance 

existing loans to further improve 

Suntec REIT’s overall financing cost and 

strengthened our debt maturity profile. 

In addition, Suntec REIT successfully raised 

S$1.5 billion for the financing of the 

acquisition of the MBFC Properties in 

December 2010. This comprised a S$1.1 

billion term loan facility and S$428.8 million 

raised through a private placement at a 

tight discount of 2.88% to the adjusted 

volume weighted average price. 

As at 31 December 2010, Suntec REIT’s 

total debt portfolio amounted to S$2.58 

billion, and our gearing ratio was 38.4% 

with an average all-in financing cost of 

3.49% for the year. 

Resilient Financial and Operating 

Performance 

The underlying income streams from our 

properties remained resilient. As at end 

FY 2010, we achieved strong committed 

portfolio occupancy of 98.8% for our 

office properties and 98.0% for our retail 

properties. In particular, Suntec City 

office occupancy recorded six straight 

quarters of growth since June 2009 to 

achieve a committed occupancy of 99.1% 

as at 31 December 2010. 

Notwithstanding the continuing 

challenges of the office and retail sectors, 

Suntec REIT achieved a distribution 

income of S$182.5 million for the year. 

With the distribution per unit of 9.859 

cents for FY 2010, the average annual 

return for Suntec REIT unitholders was 

14.7% since listing. 

Well-positioned amid Positive 

Outlook 

Going forward, the economic outlook 

for Singapore is expected to remain 

positive for 2011. The Ministry of Trade 

and Industry expects Singapore’s 2011 

economic growth to be between 4.0% 

and 6.0%, which will continue to support 

a steady recovery in the Singapore 

commercial property market. 

For 2011, with the strengthening office 

market, we expect the negative rental 

reversions of our office portfolio to 

bottom-out by the year-end. 

Barring any unforeseen circumstances, we 

expect to deliver the forecast distribution 

per unit for the financial year 2011 as 

stated in the circular to Suntec REIT 

unitholders dated 8 November 2010. 

Awards and Accolades 

During the year, Suntec REIT received 

a Runner-up Award for the “Most 

Transparent Company Award 2010” 

under the REITs category in the SIAS 

Investors’ Choice Awards 2010. This is the 

fifth year that Suntec REIT has achieved 

the award in recognition of its good 

corporate transparency practices. 

We have also achieved a Gold Award at 

the International GALAXY 2010 Awards 

competition for the Suntec REIT Annual 

Report 2009. 

In Appreciation 

I would like to convey my appreciation 

to the members of the Board for their 

invaluable contributions during the year 

and to welcome Mr. Chen Wei Ching, 

Vincent, who has joined the Board as an 

Independent Director with effect from 

1 October 2010. I would also like to thank 

the management team of the Manager 

for their hard work and dedication in 

the year in delivering the performance of 

the REIT. Last but not least, I am grateful 

to our unitholders, tenants, business 

partners and stakeholders for your 

strong support. 

Chiu Kwok Hung, Justin 

Chairman and Director 

28 February 2011

8 



Financial Highlights 

Consolidated Profit and Loss Statement for the Financial YEAR 2010 2009 

Gross Revenue S$249.5m S$253.1m 

Net Property Income S$193.1m S$192.2m 

Income Contribution from Jointly Controlled Entities 1 S$45.3m S$49.9m 

Income Available For Distribution S$182.5m S$189.6m 

Distribution Per Unit ("DPU") 2 9.86¢ 11.70¢ 

Fully Diluted DPU 3 9.61¢ 10.92¢ 

Notes: 

1 

Comprises other income, dividend income and interest income from the jointly controlled entities. 

2 

For financial year ("FY") 2009, DPU does not take into account 69,000,722 deferred units payable to Suntec City Development Pte Ltd, the remaining two equal instalments 

which have been issued on 9 June 2010 and 9 December 2010. 

3 

The deferred units totaling 207,002,170 units have been issued in six equal half-yearly instalments, with the first instalment issued on 9 June 2008 and the last instalment 

issued on 9 December 2010. The deferred units were issued at the Suntec REIT initial public offering price of S$1.00 per unit. The "Fully Diluted DPU" illustrates the pro-forma 

DPU assuming that all the deferred units had been issued on 9 December 2004. 

Consolidated Balance Sheet as at 31 Dec 2010 31 DEC 2009 

Investment Properties S$4,452.0m S$4,202.0m 

Interest In Jointly Controlled Entities 1 S$2,039.7m S$ 881.0m 

Total Assets S$6,652.1m S$5,169.9m 

Debt At Amortised Cost S$2,554.6m S$1,721.7m 

Total Liabilities S$2,667.4m S$1,842.0m 

Unitholders’ Funds S$3,984.6m S$3,327.9m 

Net Asset Value Per Unit S$1.80 S$1.78 

Debt-to-Asset Ratio 2 38.4% 33.3% 

Notes: 

1 

Arising from the acquisition of a one-third interest in One Raffles Quay through the purchase of the entire issued share capital of Comina Investment Limited in 2007, the 

acquisition of a 20 percent interest in Suntec Singapore International Convention & Exhibition Centre through the its wholly-owned subsidiary Suntec Harmony Pte. Ltd. 

in 2009 and the acquisition of a one-third interest in the Marina Bay Financial Centre Towers 1 and 2 and the Marina Bay Link Mall through the purchase of one-third of 

the issued share capital of BFC Development Pte. Ltd. in 2010. 

2 

Based on debt at amortised cost. Suntec REIT’s “Aggregate Leverage Ratio”, which refers to the ratio of the value of borrowings (inclusive of proportionate share of 

borrowings of jointly controlled entities) and deferred payments (if any) to the value of the Deposited Property in accordance with Appendix 2 of the Code on Collective 

Investments Schemes issued by the Monetary Authority of Singapore was 40.4% and 34.6% as at 31 December 2010 and 31 December 2009 respectively. 

STRONG GROWTH AND PERFORMANCE TRACK RECORD SINCE LISTING 

S$ b 

Assets Under Management 

S$ m 

Income Available for Distribution 

8.0 

7.0 

7.0 

200 

167.7 

189.6 

182.5 

6.0 

5.0 

4.0 

3.0 

2.0 

2.2 2.3 

3.2 

4.6 

5.4 

5.2 

150 

100 

50 

87.1 

99.8 

122.1 

1.0 

0 

Dec 04 Sep 05 Sep 06 Sep 07 Dec 08 Dec 09 Dec 10 

0 

FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010



9 

Unit Performance 

Unit Performance as at 1 2010 2009 2008 2007 2006 

Last Done Unit Price S$1.50 S$1.35 S$0.71 S$1.71 S$1.82 

Highest Unit Price S$1.56 S$1.37 S$1.69 S$2.10 S$1.82 

Lowest Unit Price S$1.23 S$0.495 S$0.575 S$1.55 S$1.08 

Market Capitalisation 2 (m) S$3,308 S$2,426 S$1,116 S$2,542 S$2,588 

Traded Volume for the Financial Year (m) 1,618 2,244 1,782 2,149 1,198 

Notes: 

1 

Unit performance statistics are for the financial years ended 31 December. 

2 

Based on 1,422 million units, 1,487 million units, 1,571 million units, 1,797 million units and 2,205 million units in issue as at 31 December 2006, 2007, 2008, 2009 

and 2010 respectively. 

Comparative Yield Statistics (%) 

for the Financial Year 2010 2009 2008 2007 2006 

Traded Yield (based on DPU 1 ) 6.57 8.67 15.53 4.95 4.15 

Traded Yield (based on Fully Diluted DPU 1,2 ) 6.40 8.09 13.84 4.33 3.59 

Singapore Government 10-Year Bond 3 2.71 2.66 2.05 2.68 3.05 

Notes: 

1 

Based on the last done unit price (as stated in the table above) and the full year DPU based on the period from 1 January to 31 December. Calculations were based on a DPU 

of 7.56 cents, 8.47 cents, 11.02 cents, 11.70 cents and 9.86 cents, and a Fully Diluted DPU of 6.53 cents, 7.40 cents, 9.83 cents, 10.92 cents and 9.61 cents for FY 2006, FY 2007, 

FY 2008, FY 2009 and FY 2010 respectively. 

2 

The deferred units totaling 207,002,170 units have been issued in six equal half-yearly instalments, with the first instalment issued on 9 June 2008 and the last instalment issued 

on 9 December 2010. The deferred units were issued at the Suntec REIT initial public offering price of S$1.00 per unit. The "Fully Diluted DPU" illustrates the pro-forma DPU 

assuming that all the deferred units had been issued on 9 December 2004. 

3 

As at 31 December for the respective financial years. 

As at 31 December 2010, Suntec REIT’s unit price stood at S$1.50, with a market capitalisation of S$3.3 billion. Suntec REIT’s 

FY 2010 DPU yield of 6.57% has also outperformed the Singapore Government 10-year bond yield at 2.71%. As at end 

FY 2010, Suntec REIT unitholders would have achieved an average annual return of 14.7% since listing. As one of Singapore’s 

most liquid listed REITs, the overall traded volume was 1,618 million units for the 12 months ended 31 December 2010. 

As at 31 December 2010, Suntec REIT is a constituent member of major global indices such as the FTSE NAREIT/EPRA Global 

Real Estate Index and the Global Property Research (GPR) 250 Index series. It is also a constituent of the FTSE Straits Times 

Mid Cap Index (“FSSTI Index”) and FTSE Straits Times Real Estate Index (“FSTRE Index”) in Singapore. Suntec REIT’s unit price 

performance has marginally outperformed both Singapore market indices in FY 2010, at 111% index value compared with 

110% and 108% for the FSSTI Index and FSTRE Index respectively as at 31 December 2010. 

Relative performance indices for the financial year 2010 

Index Value (base 100%) 

120% 

110% 

100% 

90% 

80% 

Dec 09 Jan 10 Feb 10 Mar 10 Apr 10 May 10 Jun 10 Jul 10 Aug 10 Sep 10 Oct 10 Nov 10 Dec 10 

Suntec REIT 

FSSTI Index 

FSTRE Index

10 


Suntec reit annual report 2010



11 

Dedicated to create lasting value 

and generate sustainable returns

12 



Board of Directors 

CHIU KWOK HUNG, JUSTIN 


Mr. Chiu Kwok Hung, Justin is the 

Chairman of the Manager. He is also the 

Chairman and Non-executive Director of 

ARA Asset Management Limited (“ARA”), 

the holding company of the Manager, 

the Chairman of ARA Asset Management 

(Fortune) Limited (the ”manager of 

Fortune REIT”) and the Chairman of ARA 

Asset Management (Prosperity) Limited 

(the ”manager of Prosperity REIT”). ARA 

is listed on Singapore Exchange Securities 

Trading Limited (the ”SGX-ST”), Fortune 

REIT is dual-listed on SGX-ST and the Main 

Board of The Stock Exchange of Hong 

Kong Limited (”SEHK”), and Prosperity 

REIT is listed on the Main Board of SEHK. 

Mr. Chiu is also a Director of ARA Fund 

Management (Asia Dragon) Limited as 

the manager of the ARA Asia Dragon 

Fund. Mr. Chiu is a member of the 11 th 

Shanghai Committee of the Chinese 

People's Political Consultative Conference 

of the People's Republic of China, a Fellow 

of The Hong Kong Institute of Directors, 

a Fellow of Hong Kong Institute of Real 

Estate Administrators and a member of 

the Board of Governors of Hong Kong 

Baptist University Foundation. 

Mr. Chiu has more than 30 years of 

international experience in real estate 

in Hong Kong and various countries 

and is one of the most respected 

professionals in the property industry 

in Asia. Mr. Chiu is an Executive Director 

of Cheung Kong (Holdings) Limited 

(“Cheung Kong”), a company listed on 

the Main Board of SEHK. He joined 

Cheung Kong in 1997 and has been an 

Executive Director since 2000, heading 

the real estate sales, marketing and 

property management teams. Prior to 

joining Cheung Kong, Mr. Chiu was with 

Sino Land Company Limited from 1994 

to 1997 and Hang Lung Development 

Company, Limited (now known as Hang 

Lung Group Limited) from 1979 to 1994 

responsible for the leasing and property 

management in both companies. Both 

Sino Land Company Limited and Hang 

Lung Group Limited are listed on the 

Main Board of SEHK. 

Mr. Chiu holds Bachelor degrees in 

Sociology and Economics from Trent 

University in Ontario, Canada. 

LIM HWEE CHIANG, JOHN 

Director 

Mr. Lim is a Director of the Manager. 

He is also the Group Chief Executive 

Officer and an Executive Director of 

ARA, the holding company of the 

Manager, which is listed on the SGX-ST. 

He has been the Group Chief Executive 

Officer and a Director of ARA since 

its establishment in 2002. He is also a 

Director of the manager of Fortune REIT, 

the manager of Prosperity REIT, Am ARA 

REIT Managers Sdn Bhd, the manager of 

Malaysia-listed AmFIRST REIT, ARA-CWT 

Trust Management (Cache) Limited, 

the manager of Singapore-listed Cache 

Logistics Trust and the Chairman of APM 

Property Management Pte. Ltd., Suntec 

Singapore International Convention 

& Exhibition Services Pte. Ltd and the 

management council of Management 

Corporation Strata Title Plan No. 2197 

(Suntec City). In addition, Mr. Lim is an 

Independent Director and member of 

the audit committee of Singapore-listed 

Teckwah Industrial Corporation Limited. 

He is also the Vice President of the Hong 

Kong-Singapore Business Association, 

the Senior Vice President of the Asian 

Public Real Estate Association, a council 

member of the Singapore Chinese 

Chamber of Commerce & Industry and a 

member of the Valuation Review Board 

of the Ministry of Finance of Singapore. 

Mr. Lim has close to 30 years of experience 

in real estate. Prior to founding ARA, 

from 1997 to 2002, he was an Executive 

Director of GRA (Singapore) Pte. Ltd., a 

wholly-owned subsidiary of Prudential 

(US) Real Estate Investors. From 1996 to 

1997, he founded and was the Managing 

Director of The Land Managers (S) 

Pte. Ltd., a Singapore-based property 

and consulting firm specialising in 

feasibility studies, marketing and leasing 

management in Singapore, Hong Kong 

and China. He was the General Manager 

of the Singapore Labour Foundation 

Management Services Pte. Ltd. from 

1991 to 1995, and was with DBS Land 

Limited (now part of CapitaLand 

Limited) from 1981 to 1990. 

Mr. Lim holds a Bachelor of Engineering 

(First Class Honours) in Mechanical 

Engineering, a Master of Science in 

Industrial Engineering, as well as a 

Diploma in Business Administration, 

each from the National University 

of Singapore.



13 

IP TAK CHUEN, EDMOND 

Director 

Mr. Ip Tak Chuen, Edmond is a Director of 

the Manager. He is also a Non-executive 

Director of ARA, the holding company 

of the Manager, and a Director of the 

manager of Fortune REIT. ARA is listed 

on SGX-ST and Fortune REIT is duallisted 

on SGX-ST and the Main Board 

of SEHK. 

Mr. Ip has been an Executive Director 

of Cheung Kong since 1993 and 

Deputy Managing Director since 2005, 

responsible for overseeing all financial 

and treasury functions of Cheung Kong 

and its subsidiaries, particularly in the 

fields of corporate and project finance. 

He has been an Executive Director of 

Cheung Kong Infrastructure Holdings 

Limited (“CK Infrastructure”) since 

its incorporation in 1996 and Deputy 

Chairman since 2003, and the Senior Vice 

President and Chief Investment Officer 

of CK Life Sciences Int’l., (Holdings) 

Inc. (“CK Life Sciences”) since 2002. He 

oversees matters relating to corporate 

finance, strategic acquisition and 

investment of both CK Infrastructure 

and CK Life Sciences. Mr. Ip is also a 

Non-executive Director of TOM Group 

Limited (“TOM”), AVIC International 

Holding (HK) Limited ("AVIC"), Excel 

Technology International Holdings 

Limited ("Excel"), Ruinian International 

Limited ("Ruinian") and Shougang 

Concord International Enterprises 

Company Limited ("Shougang"). 

Cheung Kong, CK Infrastructure, CK 

Life Sciences, TOM, AVIC, Ruinian and 

Shougang are listed on the Main Board 

of SEHK. Excel is listed on the Growth 

Enterprise Market (GEM) of SEHK. Prior 

to joining Cheung Kong, Mr. Ip held a 

number of senior financial positions 

in major financial institutions and 

has extensive experience in the Hong 

Kong financial market covering diverse 

activities such as banking, capital 

markets, corporate finance, securities 

brokerage and portfolio investments. 

Mr. Ip holds a Bachelor of Arts degree 

in Economics and a Master of Science 

degree in Business Administration. 

TAN KIAN CHEW 

Independent Director 

Mr. Tan is an Independent Director 

and Chairman of the audit committee 

of the Manager. He is currently the 

Group Chief Executive Officer of NTUC 

FairPrice. He served in the Republic 

of Singapore’s Navy from 1976 to 

1983 and held the position of head 

of naval operations from 1980 – 1983. 

He left the Navy to join the Singapore 

Government’s elite Administrative 

Service in 1983 and served in the 

Ministry of Trade and Industry. At that 

time he was also appointed to the 

board of directors of NTUC FairPrice 

Co-operative Ltd. In 1988, he was 

posted to the Prime Minister’s Office 

where he served as the Principal Private 

Secretary to the then Deputy Prime 

Minister, Mr. Ong Teng Cheong. 

Mr. Tan left the Administrative Service 

to join NTUC FairPrice in 1992 as its 

Assistant General Manager and was 

subsequently promoted to Chief 

Executive Officer in 1997. 

Mr. Tan obtained an Honours degree (First 

Class) in Mechanical Engineering from 

the University of Aston in Birmingham, 

UK. He has also completed the Advance 

Management Program at Harvard 

University in 2000. Mr. Tan was awarded 

a SAF (Overseas) Scholarship in 1972 

and was a recipient of the Singapore 

Public Administration Medal (Silver) 

in 1991.

14 



Board of Directors 

SNG SOW MEI (ALIAS POON SOW MEI) 


Mrs. Sng is an Independent Director 

and member of the audit committee of 

the Manager. Mrs. Sng, who has been 

appointed as the Independent Nonexecutive 

Director and member of the audit 

committee of Cheung Kong Infrastructure 

Limited, is also an Independent Director 

and member of the audit committee of 

the manager of Fortune REIT, the manager 

of Prosperity REIT, a Director of Hutchison 

Port Holdings Management Pte. Limited 

and a Director of INFA Systems Ltd, a 

subsidiary of Singapore Technologies 

Electronics Ltd. Since 2001, she has been 

the Senior Consultant (International 

Business) of Singapore Technologies 

Electronics Ltd. Concurrently she is the 

Advisor of InfoWave Pte Ltd. 

Prior to her appointments with Singapore 

Technologies Pte Ltd, where she was 

Director, Special Projects (North East Asia) 

in 2000 and a Consultant in 2001, Mrs. Sng 

was the Managing Director of CapitaLand 

Hong Kong Ltd for investment in Hong 

Kong and the region including Japan and 

Taiwan. In Hong Kong from 1983 to 1997, 

Mrs. Sng was the Centre Director and 

then Regional Director of the Singapore 

Economic Development Board and Trade 

Development Board respectively. She 

was Singapore’s Trade Commissioner in 

Hong Kong from 1990 to 1997. 

Mrs. Sng, with a Bachelor of Arts 

degree from the Nanyang University of 

Singapore, has wide experience in various 

fields of industrial investment, business 

development, strategic and financial 

management, especially in property 

investment and management. In 1996, 

Mrs. Sng was conferred the title of PPA(P) 

– Pingat Pentadbiran Awam (Perak), 

the Singapore Public Administration 

Medal (Silver). 

LIM LEE MENG 


Mr. Lim is an Independent Director and 

member of the audit committee of 

the Manager. He is currently a Senior 

Partner of RSM Chio Lim LLP, a member 

firm of RSM International. Mr. Lim 

is also an Independent Director of 

Teckwah Industrial Corporation Ltd 

(“Teckwah”), Datapulse Technology 

Limited (“Datapulse”), Tye Soon Ltd, 

Europtronic Group Ltd (“Europtronic”) 

and the manager of Fortune REIT. He 

also serves as the Chairman of the 

audit committee of each of Teckwah, 

Datapulse, Europtronic and the manager 

of Fortune REIT. 

Mr. Lim is a practising member of the 

Institute of Certified Public Accountants 

of Singapore, an associate member of 

the Institute of Chartered Secretaries 

and Administrators and a member of 

the Singapore Institute of Directors. 

He is also the Chairman of Yio Chu Kang 

Citizen Consultative Committee and the 

Chairman of the finance committee of 

Ang Mo Kio - Yio Chu Kang Town Council. 

Mr. Lim graduated from the Nanyang 

University of Singapore with a Bachelor of 

Commerce (Accountancy) degree in May 

1980. He also has a Master of Business 

Administration degree from the University 

of Hull (1992), a Diploma in Business Law 

from the National University of Singapore 

(1989) and an ICSA qualification from the 

Institute of Chartered Secretaries and 

Administrators. 

CHEN WEI CHING, VINCENT 


Mr. Chen is an Independent Director and 

member of the audit committee of the 

Manager. Mr. Chen has been managing 

his personal and family investments since 

1993, and has been an Independent 

Director of Transpac Industrial Holdings 

Ltd since 2003, currently serving as 

Chairman of the audit committee and 

Chairman of the nominating committee. 

Mr. Chen has more than 20 years of 

experience in the banking and finance 

industry, having spent 17 years with the 

First National Bank of Chicago, Bank 

of America, and Banque Francaise du 

Commerce Exterieur, and subsequently 

co-founded a financial consulting firm 

in 1988. 

Mr. Chen holds a Bachelor of Science 

degree in Industrial Engineering from 

Cornell University, and a Master of 

Business Administration degree from the 

University of Pennsylvania.



15 

CHOW WAI WAI, JOHN 

Non-executive Director 

Mr. Chow is a Non-executive Director 

of the Manager. He is currently the 

Managing Director of Hong Konglisted 

Winsor Properties Holdings 

Limited, which has operations in Hong 

Kong, China and Singapore. He is 

also the Managing Director of Winsor 

Industrial Corporation Limited, which 

has international operations spanning 

countries in the US, Europe and Asia, 

and he holds directorships in the various 

subsidiaries and associated companies of 

the Winsor companies. He is an Executive 

Director of Hong Kong-listed Wing Tai 

Properties Limited and is also a Nonexecutive 

Director of Hong Kong-listed 

Dah Sing Financial Holdings Limited. 

Mr. Chow has more than 30 years of 

experience in the property, textile and 

clothing businesses. He has served as 

Chairman of the Hong Kong Garment 

Manufacturers Association and as a 

member of the Textile Advisory Board of 

the Hong Kong Government. 

Mr. Chow received his Bachelor of Arts 

(Economics) degree from the University 

of British Columbia. 

YEO SEE KIAT 

Director and Chief Executive Officer 

Mr. Yeo is the Chief Executive Officer and 

an Executive Director of the Manager. 

Mr. Yeo has more than 30 years of 

experience in the real estate industry, 

managing and overseeing various projects 

with Hwa Hong Corporation Limited, The 

Wharf Group, Parkway Holdings Limited, 

and CapitaLand Limited. He has held 

senior management positions over the 

last 20 years. Mr. Yeo started his career 

in Turquand Young (now Ernst & Young) 

and was with the firm from 1976 to 1980. 

Mr. Yeo holds a Bachelor of Accountancy 

from the University of Singapore and a 

Graduate Diploma in Management 

Studies from the Singapore Institute of 

Management. He is also a fellow of the 

Institute of Certified Public Accountants 

of Singapore. 

Ma Lai Chee, Gerald 

Alternate Director 

Mr. Ma is an Alternate Director to Mr. Ip 

Tak Chuen, Edmond, a Director of the 

Manager and the manager of Fortune 

REIT. He is also a Director of AMTD 

Financial Planning Limited, iBusiness 

Corporation Limited, CK Communications 

Limited, Beijing Net-Infinity Technology 

Development Company Limited and 

mReferral Corporation (HK) Limited. 

He also serves as a Non-executive 

Director of the manager of Prosperity 

REIT, and is an Alternate Director to 

Mr. Dominic Lai, Non-executive Director 

of Hutchison Telecommunications Hong 

Kong Holdings Limited. 

Mr. Ma is currently Director, Corporate 

Strategy Unit and Chief Manager, 

Corporate Business Development at 

Cheung Kong. He has over 21 years 

of experience in banking, investment 

and portfolio management, real estate 

development and marketing, as well 

as managing IT related ventures and 

services. He is a member of the Hospitality 

Services Committee of Caritas Hong 

Kong and a member of the Finance 

Committee of The Scout Association of 

Hong Kong. He is also a member of the 

President’s Circle of the University of 

British Columbia, Canada (“UBC”) and a 

member of the Dean’s advisory board for 

the Faculty of Arts of UBC. 

Mr. Ma holds a Bachelor of Commerce 

degree in Finance and a Master of Arts 

degree in Global Business Management.

16 



driven to perform



17 

drive

18 

Suntec reit 

annual report 2010 

ARA Trust Management (Suntec) Limited 

Management Team 

Onsite photography at rooftop of Suntec Tower Four with One Raffles Quay 

and Marina Bay Financial Centre in the background.



19 

From left to right 

Janice Phoon - Manager, Asset Management 

Elaine Leong - Senior Accountant, Finance 

Tan Cheng Cheng - Assistant Manager, Finance 

Ng Ee San - Senior Manager, Finance 

Richard Tan - Director, Finance 

Yeo See Kiat - Chief Executive Officer 

Yip Kam Thai - Chief Operating Officer 

Marilyn Tan - Manager, Investor Relations 

Julia Koh - Manager, Special Projects 

Lim Kim Loon - Manager, Asset Management 

Chan Chuey Leng - Manager, Asset Management 

Jaclyn Chan - Senior Manager, Asset Management

20 




Management Team 

Yeo See Kiat 

Chief Executive Officer 

Mr. Yeo is responsible for the 

performance and direction of Suntec 

REIT. He leads his team of managers 

to achieve the key mission of creating, 

adding and delivering premium value to 

all stakeholders of Suntec REIT. 

With single-minded focus, he leads 

and supports his team of experienced 

professionals with a passion and drive 

to deliver. 

His experience is highlighted in the 

section on the Board of Directors. 

Yip Kam Thai 

Chief Operating Officer 

Mr. Yip assists the Chief Executive Officer 

on operational matters pertaining to 

Suntec REIT, including asset management, 

investment, investor relations and asset 

enhancement initiatives. 

Mr. Yip has been with the real estate 

industry since 1993, and has been with 

the ARA Group (“ARA”) since 2004. 

Within ARA, he has held various senior 

positions in the listed REITs and funds 

under management, including Executive 

Director of the manager of Fortune REIT, 

and Acting Chief Executive Officer of 

the manager of Prosperity REIT. Prior to 

his current appointment, he was based 

in Hong Kong as the Director and Head 

of Asset Management, as well as the 

China and Hong Kong Representative 

for the ARA Asia Dragon Fund. 

Mr. Yip holds a Bachelor of Science 

(Honours) Degree in Estate Management 

from the National University of Singapore. 

Richard Tan 

Director, Finance 

Mr. Tan heads the finance team and 

assists the Chief Executive Officer on all 

accounting, finance treasury and capital 

management functions for Suntec REIT. 

Mr. Tan has more than 30 years of 

financial management experience in 

the banking and IT industries. Prior to 

joining the Manager, Mr. Tan was a 

Vice President with Wearnes Group, 

and previous to that, he was Finance 

Director and Business Manager for 

South East Asia in Hewlett-Packard Sales 

& Marketing Division. 

Mr. Tan also held various senior 

positions both in the banking industry 

in Singapore and Hong Kong for 

over 18 years. He was the Regional 

Finance Director in Schroders and was 

the Country Operations Manager for 

American Express Bank Singapore and a 

Hong Kong-based investment bank. 

Mr. Tan holds a Bachelor of Accountancy 

Degree from the University of Singapore. 

Jaclyn Chan 

Senior Manager, Asset Management 

Ms. Chan is a member of the Asset 

Management team and assists the Chief 

Operating Officer in the monitoring of 

the performance of the assets within the 

existing portfolio, and in strategising 

and implementing asset enhancement 

initiatives. 

Ms. Chan has more than 20 years of real 

estate experience in areas of property 

management and maintenance, 

marketing and lease management 

of commercial and retail properties. 

Prior to joining the Manager, she was 

the Centre Manager of a shopping 

mall under the management of 

CapitaLand Retail Management Pte 

Ltd where she was responsible for 

the day-to-day management of the 

mall, including leasing, marketing, 

operations, asset enhancement and its 

financial performance. She previously 

held positions as Vice President of the 

Property Department at The Great 

Eastern Life Assurance Co Limited, 

Marketing Manager of SLF Management 

Services Pte Ltd and a Planner with the 

Development Control Division of Urban 

Redevelopment Authority. 

Ms. Chan holds a Bachelor of Science 



Ng Ee San 

Senior Manager, Finance 

Ms. Ng is a member of the Finance team, 

responsible for the finances of Suntec 

REIT and provides support in areas of 

secretariat compliance, taxation and 

treasury. 

Ms. Ng has more than 12 years of 

experience in accounting and finance. 


the Finance Manager at Ascott Residence 

Trust Management Limited, the Manager 

of Ascott Residence Trust. She was 

also previously an Accountant at Wing 

Tai Holdings Limited and The Hour 

Glass Limited, and had held various 

positions with PSA Corporation Limited 

and Deloitte And Touche. 

Ms. Ng holds a Bachelor of Accountancy 

(Accounting) Degree from Nanyang 

Technological University, Singapore, 

and is a Certified Public Accountant. 

Janice Phoon 

Manager, Asset Management 

Ms. Phoon is a member of the Asset 

Management team, responsible for 

overseeing and driving the performance 

of the office portfolio of Suntec REIT. 

Ms. Phoon has more than 15 years of 

experience in marketing and leasing. 


the Assistant Marketing Manager of 

Riverwalk Promenade Pte Ltd where she 

played a key role in marketing and leasing 

the TradeMart Singapore complex. 

Ms. Phoon holds a Bachelor of 

Commerce Degree in Marketing and 

Management from Murdoch University, 

Western Australia and a Diploma in 

Building Management from Ngee Ann 

Polytechnic, Singapore.



21 

Chan Chuey Leng 


Ms. Chan is a member of the Asset 


monitoring the performance of the retail 

assets and overseeing the advertising 

and promotional activities and branding 

initiatives of the retail portfolio. 

Ms. Chan has more than 15 years of 

experience in marketing and leasing 

of commercial, retail, industrial and 

residential properties. Prior to joining 

the Manager, she was the Marketing and 

Leasing Manager at Cathay Cineleisure 

International Pte Ltd. She was previously 

the Assistant Marketing Manager with 

Tuan Sing Holdings Limited and prior 

to that, was the Assistant Marketing 

Manager with Riverwalk Promenade 

Pte Ltd. 

Ms. Chan holds a Bachelor of Science 



Marilyn Tan 

Manager, Investor Relations 

Ms. Tan is responsible for overseeing the 

Investor Relations activities of Suntec 

REIT. This includes facilitating the timely 

communication of quality information to 

unitholders, potential investors and key 

stakeholders, and providing the Manager 

with key market updates. She also provides 

support to the Finance team. 

Ms. Tan has more than 10 years of work 

experience in the areas of investor 

relations and equities research in 

various sectors including the property 

sector. Prior to joining the Manager, she 

was an Associate Vice President with 

an independent research firm Amba 

Research Singapore, and had previously 

held an investor relations position with 

Keppel Land Limited. 

Ms. Tan holds a Bachelor of Business 

(Honours) Degree, (Financial Analysis) 

from Nanyang Technological University, 

Singapore. 

Lim Kim Loon 


Ms. Lim is a member of the Asset 


monitoring the performance of the 

retail assets, and in strategising and 

implementing asset enhancement 

initiatives. 

Ms. Lim has close to 15 years of real 

estate experience in areas of property 

management and maintenance, 

marketing and lease management of 

commercial and retail properties. Prior 

to joining the Manager, she was with 

CapitaLand Retail Management Pte 

Ltd where she was responsible for the 

day-to-day management of a shopping 

mall. Her responsibilities included 

the leasing, marketing, operations, 

asset enhancement and financial 

performance. She previously held 

positions as Manager of the Property 

Department at The Great Eastern Life 

Assurance Co Limited and Marketing 

Officer of SLF Management Services 

Pte Ltd. 

Ms. Lim holds a Bachelor of Science 



Julia Koh 

Manager, Special Projects 

Ms. Koh is a member of the Special 

Projects team who is involved in asset 

enhancement works, with more than 15 

years of working experience in Quantity 

Surveying and Project Management. 

Prior to joining the Manager, she 

was the Senior Project Executive at 

CapitaLand Retail Limited involving 

in the redevelopment of Clarke Quay, 

reconstruction of Sembawang Shopping 

Centre as well as the upgrading of 

LOT One Shoppers’ Mall. She was also 

the Senior Quantity Executive at Tiong 

Seng Contractor Limited involved in 

the construction of Guilin View 

Condominium. 

Ms. Koh holds a Diploma in Building 

(Quantity Surveying) from the Singapore 

Polytechnic. 

Tan Cheng Cheng 

Assistant Manager, Finance 

Ms. Tan is a member of the Finance 

team, assisting in managing the monthly 

accounts and preparation of financial 

statements and providing support 

in areas of secretariat compliance, 

taxation and treasury. 

Ms. Tan has more than 20 years of 

commercial/industrial experience. 

Prior to joining the Manager, she 

was the Accountant responsible for 

the finance operations of propertyrelated 

subsidiaries of United Industrial 

Corporation Limited. Ms. Tan also 

previously held finance positions in Euro- 

Asia Realty Pte Ltd, JDC Holdings (S) Pte 

Ltd and Singapore Shipping Corporation 

Pte Ltd. 

Ms. Tan holds an ACCA Certificate (UK) 

and is a Certified Public Accountant. 

Elaine Leong 

Senior Accountant, Finance 

Ms. Leong is a member of the Finance 

team, assisting in managing the monthly 

accounts and preparation of financial 

statements and providing support in 

areas of secretariat compliance, taxation 

and treasury. 

Ms. Leong has over 4 years of experience 

in accounting and finance. Prior to 

joining the Manager, she was the 

Accountant at Mapletree Investments 

Pte Ltd where she was responsible for 

the finance operations of its commercial 

property subsidiaries. She was also 

previously an Auditor with KPMG LLP. 

Ms. Leong holds a Bachelor of Business 

Management (Finance and Accounting) 

Degree from Singapore Management 

University and an ACCA Certificate (UK).

22 



Our single-minded focus 

to deliver premium value 

for our unitholders



23

24 



Manager’s Report 

YEAR IN REVIEW 

Suntec REIT achieved a distribution 

income of S$182.5 million and 

distribution per unit ("DPU") of 9.859 

cents in the year ended December 2010 

(“FY 2010”). In FY 2010, Suntec REIT 

acquired a one-third interest in the 

Marina Bay Financial Centre Towers 1 

and 2 and the Marina Bay Link Mall 

(the “MBFC Properties”), and secured 

a S$700 million term loan facility to 

prepay the S$575 million 3-year loan 

maturing in FY 2012, and to refinance 

part of the S$400 million club loan 

maturing in FY 2011. 

As at end FY 2010, Suntec REIT’s 

assets under management has grown 

to approximately S$7.0 billion, 

underpinned by a strong 2.4 million sq ft 

office portfolio and 1.1 million sq ft retail 

portfolio strategically located in the heart 

of Singapore’s central business district. 

FINANCIAL PERFORMANCE 

Suntec REIT achieved gross revenue of 

S$249.5 million in FY 2010, a marginal 

decline of 1.4% compared to the 

corresponding period in 2009 (“FY 2009”). 

Office revenue achieved for FY 2010 was 

S$117.7 million, a dip of 0.3% compared 

to FY 2009, whilst retail revenue achieved 

was S$131.8 million, which was 2.5% 

lower than in FY 2009. 

In terms of revenue contribution 

by asset, Suntec City contributed 

S$216.7 million in gross revenue in FY 

2010, whilst Park Mall and Chijmes 

contributed S$22.5 million and S$10.3 

million respectively. 

The net property income achieved in 

FY 2010 was S$193.1 million, up 0.4% 

compared to FY 2009. 

GROSS Revenue 

Contribution by Asset 

FY 2010 

Suntec City 86.9% 

Park Mall 9.0% 

Chijmes 4.1% 

Net Property Income 

Contribution by Asset 

FY 2010 

Suntec City 87.7% 

Park Mall 8.6% 

Chijmes 3.7% 

The income contribution from the jointly 

controlled entities achieved for FY 2010 

was S$45.3 million. This comprised the 

income contribution of S$40.6 million 

from the one-third interest in One Raffles 

Quay, S$2.2 million from the 20 percent 

interest in Suntec Singapore International 

Convention and Exhibition Centre and 

S$2.5 million from the one-third interest 

in the MBFC Properties which was 

acquired on 9 December 2010. 

The income available for distribution 

achieved for FY 2010 was S$182.5 

million, 3.8% lower year-on-year. The 

DPU achieved for FY 2010 amounted 

to 9.859 cents, which translated to an 

annual yield of 6.57% for the year. 

On 9 December 2010, Suntec REIT 

issued 34,500,360 units in Suntec REIT 

to Suntec City Development Pte Ltd, the 

last of six instalments of deferred units 

in Suntec REIT in part satisfaction of the 

purchase consideration for Suntec REIT’s 

initial portfolio of properties in its initial 

public offering. 

Property PORTFOLIO AUM 

On 9 December 2010, Suntec REIT 

successfully acquired a one-third interest 

in the MBFC Properties at a purchase 

price of S$1,495.8 million. The MBFC 

Properties were acquired with income 

support from the vendor amounting 

to S$113.9 million over a period of 60 

months, at a net property income yield 

of 4%. 

The MBFC Properties were valued at 

S$1,496 million and S$1,497 million by 

Knight Frank Pte Ltd and CB Richard Ellis 

(Pte) Ltd respectively. The valuations 

were based on the income capitalisation 

approach and discounted cash flow 

analysis. 

With the acquisition, Suntec REIT’s office 

portfolio net lettable area has increased 

from approximately 1.9 million sq ft 

to approximately 2.4 million sq ft, and 

its total assets under management 

(“AUM”) has increased to approximately 

S$7.0 billion as at 31 December 2010, 

up from approximately S$5.2 billion 

in the preceding year. The net asset 

value stood at S$1.804 per unit as at 

31 December 2010. 

Distribution per unIT FY 2010 FY 2009 

DPU 1 9.859 11.703 

Fully Diluted DPU 2 9.607 10.915 

Notes: 

1 

For FY 2009, DPU does not take into account 69,000,722 deferred units payable 

to Suntec City Development Pte Ltd, the remaining two equal instalments 

which were issued on 9 June 2010 and 9 December 2010. 

2 

The deferred units totaling 207,002,170 units were issued in six equal half 

yearly instalments, with the first instalment issued on 9 June 2008 and the 

rest semi-annually thereafter. The deferred units were issued at the Suntec 

REIT initial public offering price of S$1.00 per unit. The "Fully Diluted DPU" 

illustrates the pro-forma DPU assuming that all the deferred units had been 

issued on 9 December 2004. 

Property 31 Dec 31 DEC 

Valuation (S$m) 2010 2009 

Suntec City 1 3,980 3,750 

Park Mall 2 338 321 

Chijmes 1 134 131 

One Raffles Quay 3 1,023 934.9 

Suntec Singapore International 

Convention & Exhibition Centre 1 57.6 48 

MBFC Properties 4 1,511 – 

Total 7,043.6 5,184.9 

Notes: 

1 

Based on the valuation by Knight Frank Pte Ltd. Suntec Singapore International 

Convention & Exhibition Centre reflects the value of Suntec REIT's 20 percent 

interest in the property. 

2 

Based on the valuation by CB Richard Ellis (Pte) Ltd. 

3 

Based on the valuation by Colliers International Consultancy & Valuation 

(Singapore) Pte Ltd, reflecting the value of Suntec REIT's one-third interest in 

One Raffles Quay. 

4 

Based on the valuation by Knight Frank Pte Ltd, reflecting the value of Suntec 

REIT's one-third interest in the MBFC Properties.



25 

Assets Under Management 

DEBT MATURITY PROFILE 

S$ b 

S$ m 

8.0 

900 

800 

700 

600 

500 

400 

300 

200 

100 

0 

7.0 

6.0 

5.0 

4.0 

3.0 

2.0 

1.0 

2.3 

3.2 

4.6 

5.4 

5.2 

7.0 

132.5 

FY 2011 

25 

200 


50 

270 

350 


773.5 


331.5 

350 


100 


0 

Sep 05 

Sep 06 Sep 07 Dec 08 Dec 09 Dec 10 

FY 2011 - S$132.5m MTN 

FY 2012 - S$25m MTN 

FY 2012 - S$200m Term loan 

FY 2013 - S$50m Bi-lateral loan 

FY 2013 - S$270m Convertible loan 

FY 2013 - S$350m (from S$700m loan facility) 

FY 2014 - S$773.5m (from S$1.1b loan facility) 

FY 2015 - S$331.5m (from S$1.1b loan facility) 

FY 2015 - S$350m (from S$700m loan facility) 

FY 2016 - S$100m Term loan 

CAPITAL STRUCTURE 

Suntec REIT’s total debt stood at 

S$2,582.5 million, with a debt-toassets 

ratio and aggregate leverage of 

38.4% and 40.4% respectively as at 31 

December 2010. The average all-in cost 

of Suntec REIT’s debt portfolio for FY 

2010 was 3.49%. 

On 4 October 2010, Suntec REIT entered 

into a S$700 million term loan facility 

to prepay the S$575 million 3-year loan 

maturing in FY 2012, and to refinance 

part of the S$400 million club loan 

maturing in FY 2011. The new loan 

facility is secured by Suntec City Mall, 

and comprises a S$350 million 3-year 

loan and a S$350 million 5-year loan, at 

a blended all-in interest margin of 1.5% 

from a panel of nine banks. 

The S$700 million term loan facility was 

obtained at a lower interest margin 

which has further improved Suntec REIT’s 

overall financing cost and strengthened 

its debt maturity profile. 

On 9 December 2010 Suntec REIT raised 

approximately S$1.5 billion for the 

financing of the acquisition of the MBFC 

Properties. This comprised a S$1.105 

billion term loan facility entered into 

with Citibank, DBS Bank and Standard 

Chartered Bank, and gross proceeds 

of S$428.8 million raised through a 

private placement of 313 million new 

units in Suntec REIT at an issue price 

of S$1.37 per new unit in Suntec REIT 

(“Private Placement”) carried out on 

29 November 2010. The Private 

Placement was 3.1 times oversubscribed, 

and was priced at a discount of 4.02% to 

the volume weighted average price of 

S$1.4274 per unit in Suntec REIT and 

2.88% to the adjusted volume weighted 

average price of S$1.4106 per unit in 

Suntec REIT for trades done for the full 

market day on 26 November 2010. 

The placement units were issued on 

9 December 2010 and 100% of the net 

proceeds of approximately S$417.9 

million have been used to partly finance 

the acquisition of the MBFC Properties. 

Such use is in accordance with the 

stated use and in accordance with the 

percentage of the net proceeds of the 

private placement allocated to such use. 

On 15 December 2010, Moody’s 

Investors Service carried out a rating 

review of Suntec REIT subsequent to 

the completion of the acquisition of the 

MBFC Properties, and revised Suntec 

REIT’s corporate family rating to Baa2, 

and unsecured debt rating to Baa3. 

Moody’s has also restored Suntec REIT’s 

rating outlook to stable. 

Suntec REIT holds derivative financial 

instruments to hedge its interest rate 

risk exposure. The fair value derivative 

for FY 2010, which was included as 

Financial Derivatives in total assets and 

total liabilities were S$1.2 million and 

S$9.0 million respectively. The net fair 

value derivative represented 0.196% 

of the net assets of Suntec REIT as at 


Note: 

1 

The adjusted volume weighted average price was 

computed based on the volume weighted average 

price of all trades in the Suntec REIT units on Singapore 

Exchange Securities Trading Limited (the “SGX-ST”) 

on the full market day on 26 November 2010 and 

subtracting an advanced distribution for the period 

1 October 2010 to 8 December 2010 of approximately 

1.677 cents per unit in Suntec REIT. This advanced 

distribution of approximately 1.677 cents per Unit 

was based on the Manager’s pro-rated estimate of 

Suntec REIT’s revenue and expenses for the quarter 

ending 31 December 2010, and the amount was an 

estimate based on information then available to 

the Manager as at 29 November 2010. The actual 

advanced distribution amounted to 1.723 cents.

26 



STRONG PORTFOLIO 

OCCUPANCY 

Suntec REIT’s asset portfolio performance 

continued to remain strong. As at 

31 December 2010, the committed 

occupancy of Suntec City office improved 

further to 99.1% compared to 95.3% 

in the year before, whilst Park Mall 

office maintained its full occupancy. The 

committed occupancy of Suntec City 

Mall stood at 97.9% as at 31 December 

2010, whilst the Park Mall and Chijmes 

achieved committed occupancy of 100% 

and 99.5% respectively. 

For the jointly controlled entities, One 

Raffles Quay achieved full committed 

occupancy, whilst the committed 

occupancy for the MBFC Properties stood 

at 96.5% as at 31 December 2010. As such, 

Suntec REIT’s office and retail portfolio 

achieved an overall committed occupancy 

of 98.8% and 98.0% respectively as at 


Since the inception of the Suntec strata 

office acquisition programme in October 

2006, the Manager has acquired a total 

of 73,561.2 sq ft at a cost of about 

S$136.3 million. 

COMMITTED OCCUPANCY As AT As AT As AT As AT As AT 

dEC 09 MAR 10 JUN 10 SEP 10 DEC 10 

Suntec City: 

- Office 95.3% 95.5% 96.6% 98.1% 99.1% 

- Retail 97.6% 96.4% 98.3% 98.0% 97.9% 

Park Mall: 

- Office 100% 100% 100% 97.5% 100% 

- Retail 100% 100% 100% 100% 100% 

Chijmes 100% 100% 100% 90.0% 99.5% 

One Raffles Quay 100% 100% 100% 100% 100% 

MBFC Properties – – – – 96.5% 

Office Portfolio Occupancy 96.8% 96.9% 97.6% 98.5% 98.8% 

Retail Portfolio Occupancy 98.1% 97.2% 98.7% 97.6% 98.0%



27 

LEASING ACHIEVEMENTS 

IN FY 2010 

For the office portfolio, a total of 

884,012 sq ft of new, renewal and 

replacement leases were secured in 

FY 2010. 

With the steady recovery of the 

Singapore office market and in tandem 

with the strengthening committed 

occupancy of Suntec City Office during 

the year, renewal and replacement 

leases at Suntec City Office Towers 

were secured at an average of between 

S$7.34 psf per month and S$8.16 psf per 

month in the year, up from the trough 

of between S$7.11 psf per month and 

S$7.30 psf per month in the second half 

of 2009. 

leasing activities - office Tenants NLA (sq Ft) 

Renewal leases 96 674,284 

Replacement leases 75 209,728 

New leases – – 

Total 171 884,012 

leasing activities - RETAIL Tenants NLA (sq Ft) 

Renewal leases 135 184,695 

Replacement leases 87 102,586 

New leases 2 2,618 

Total 224 289,899 

committed average passing rents - suntec city mall, park mall and chijmes 

For the retail portfolio, a total of 

289,899 sq ft of new, renewal and 

replacement leases were secured in 

FY 2010. 

S$ psf pm 

12.00 

11.00 

10.71 10.67 

10.63 10.48 

The performance of the retail portfolio 

was relatively stable during the year. 

The average committed passing rents 

for Suntec City Mall, Park Mall and 

Chijmes stood at S$10.48 psf per 

month, S$7.45 psf per month and 

S$10.63 psf per month respectively as 

at 31 December 2010. 

10.00 

9.00 

8.00 

7.00 

6.00 

7.46 

10.92 10.75 

7.45 

Mar 10 

Dec 09 

10.99 10.89 

7.44 

Jun 10 

10.95 10.70 

7.44 

Sep 10 

7.45 

Dec 10 

Park Mall 

Chijmes 

Suntec City Mall

28 



Higher revenue from 

other income initiatives 

Suntec REIT’s revenue from other income 

initiatives, namely atrium rentals for 

events and exhibitions, media sales and 

pushcart rentals achieved approximately 

S$7.2 million in FY 2010. 

OTHER INCOME 

S$ m 

8.0 

6.0 

4.0 

3.0 

6.0 

6.2 

7.0 

6.5 

7.2 

2.0 

0 






FY 2010



29 

ONE-STOP SHOPPING, DINING 

AND ENTERTAINMENT AT 

SUNTEC CITY MALL 

Many shoppers head to Suntec City 

Mall as a one-stop destination for 

shopping, dining and entertainment 

all year-round. As one of Singapore’s 

largest shopping mall with events and 

offerings for everyone, Suntec City 

Mall played host to key events such 

as the Singapore Heritage Festival in 

August 2010 graced by Mr. Lui Tuck Yew, 

Minister for the Ministry of Information, 

Communications and the Arts, Suntec 

City Mall’s celebration of the Singapore 

Food Festival entitled “Ready, Set, Dine 

in Style”, BMW’s “Joy” campaign, which 

featured Asia’s first ever 3D interactive 

building projection at Suntec City in 

showcasing BMW’s brand and product 

range, and the exciting promotions 

leading up to the 2010 Formula 1 

Singtel Singapore Grand Prix night race 

held in September, among others. 

The monthly themed promotions, in 

conjunction with key events such as 

Chinese New Year, Valentine’s Day, the 

Great Singapore Sale, National Day, 

Children’s Day and Christmas were very 

well-received by shoppers. 

The grand finals of the annual Suntec 

Dance Competition was held on 

11 September 2010, and the champions 

of the open group category, “The 

Ohayguys!” represented Singapore in 

the seventh annual World Supremacy 

Battlegrounds 2010 Dance Competition 

in Melbourne, Australia. “The Ohayguys!” 

beat 17 other groups from across 

Australia, New Zealand, Singapore and 

Indonesia and clinched first place in the 

open category international rankings in 

the competition. 

Representatives from the management 

of Suntec City also participated in 

the torch relay run in the Singapore 

2010 Journey of Youth Olympic Flame 

(“JYOF”) during the inaugural Singapore 

Youth Olympic Games (“YOG”). The 

JYOF spans seven international cities 

including Singapore, beginning from 

the lighting of the flame and handover 

ceremony in Olympia, Greece, to the 

cities of Berlin, Dakar, Mexico City, 

Auckland, Seoul and Singapore. The 

Singapore leg encompassed a sixday 

305 km round-island relay route 

across 22 venues, with as many as 2,400 

torchbearers who exemplified the values 

of Excellence, Friendship and Respect in 

celebration of the spirit of the YOG.

30 



Property Portfolio 

HIGH QUALITY COMMERCIAL ASSETS 

STRATEGICALLY LOCATED IN SINGAPORE’S 

PRIME DISTRICT 

Suntec REIT’s portfolio comprises prime commercial 

properties in Suntec City, Park Mall, Chijmes, a one-third 

interest in One Raffles Quay and a one-third interest 

in Marina Bay Financial Centre Towers 1 and 2 and the 

Marina Bay Link Mall (the "MBFC Properties"), all located 

within Singapore’s growth precincts, namely Marina Bay 

and the Civic and Cultural District. 

Spanning a total net lettable area ("NLA") of about 

3.5 million sq ft, the properties derive a steady stream of 

income from a well-diversified pool of strong office and 

retail tenants. The committed occupancy of Suntec REIT’s 

office and retail portfolio stood at 98.8% and 98.0% 

respectively as at 31 December 2010. 

PORTFOLIO PROPERTIES - STATISTICS 

As at 31 December 2010 

Net Lettable Area (sq ft): 3,500,422 

- Office 2,418,119 

- Retail 1,082,303 1 

Number of Tenants (actual): 753 

- Office 255 

- Retail 498 

Valuation (S$ million) 7,043.6 2 

Committed Occupancy (%) 

- Office 98.8 

- Retail 98.0 

Notes: 

1 

Includes 20 percent interest in the retail net lettable area in Suntec Singapore 

International Convention & Exhibition Centre. 

2 

Includes the valuation of Suntec REIT’s 20 percent interest in Suntec Singapore 

International Convention & Exhibition Centre, the valuation of Suntec REIT’s 

one-third interest in One Raffles Quay and the valuation of Suntec REIT’s 

one-third interest in the MBFC Properties.



31 

Vibrant Tenant mix 

Suntec REIT’s office portfolio leases 

are well diversified across 14 business 

sectors. 63.9% of the total gross office 

revenue for December 2010 was 

attributed to the major business sectors 

of Banking, Insurance and Financial 

Services, and Technology, Services and 

Consultancy. The top 10 tenants of the 

office portfolio contributed 26.7% of 

Suntec REIT’s total gross revenue for the 

month of December 2010, and occupied 

an area representing 46.3% of the REIT’s 

total office portfolio net lettable area. 

For the retail portfolio, 53.1% of the 

total gross retail revenue for December 

2010 was attributable to the major 

business sectors of Food and Beverage, 

and Fashion. The top 10 tenants of the 

retail portfolio contributed 7.7% of 

Suntec REIT’s total gross revenue for the 

month of December 2010, and occupied 

an area representing 35.5% of the REIT’s 

total retail portfolio net lettable area. 

OFFICE PORTFOLIO 

Business Sector Analysis (By Gross Rental Income 1 ) 


RETAIL PORTFOLIO 



Legal 2.6% 

Real Estate and Property Services 2.3% 

Trading 14.3% 

Manufacturing 0.5% 

Shipping and Freight Forwarding 4.1% 

Others 1.0% 

Government and Government-Linked Offices 3.4% 

Banking, Insurance and Financial Services 48.0% 

Technology, Services and Consultancy 15.9% 

Beauty / Health 0.9% 

Clinics / Laboratories 0.5% 

Consultancy / Services 5.1% 

Institutions / Schools 1.0% 

Travel / Leisure 0.4% 

1 

Includes one-third interest in One Raffles Quay and one-third interest in 

Marina Bay Financial Centre Towers 1 and 2. 

Electronics / Technology 3.0% 

Fashion 22.1% 

Food and Beverage 31.0% 

Gifts and Speciality / Books / Hobbies / Toys 4.6% 

Homeware and Home Furnishings 8.2% 

Hypermarket 5.4% 

Jewellery and Watches 3.6% 

Leisure and Entertainment / Sports and Fitness 5.6% 

Beauty and Healthcare 4.1% 

Others 4.1% 

Services / Educational 8.3% 

1 

Includes one-third interest in One Raffles Quay, one-third interest in 

the Marina Bay Link Mall and 20 percent interest in Suntec Singapore 

International Convention & Exhibition Centre.

32 



Property Portfolio 

OFFICE PORTFOLIO - TOP 10 TENANTS BY GROSS RENTAL INCOME 1 


Tenant business Sector nla % of % of Total 

(sq ft) Office Monthly 

nla gross Rental 

income 

Standard Chartered Bank Banking, Insurance and Financial Services 171,249 7.4 4.9 

Barclays Bank PLC Banking, Insurance and Financial Services 150,072 6.5 4.7 

UBS AG Banking, Insurance and Financial Services 233,053 10.0 3.9 

BHP Billiton Marketing (Asia) Pte Ltd Others - Steel & Energy 76,884 3.3 3.7 

Nomura Singapore Limited Banking, Insurance and Financial Services 84,286 3.6 2.2 

Deutsche Bank Aktiengesellschaft Banking, Insurance and Financial Services 93,249 4.0 1.9 

Info-Communications Development Government and Government-Linked Offices 98,738 4.3 1.5 

Authority of Singapore (IDA) 

Oracle Corporation Singapore Pte Ltd Technology, Services and Consultancy 78,997 3.4 1.3 

Macquarie Capital Securities Banking, Insurance and Financial Services 25,109 1.1 1.3 

(Singapore) Pte. Limited 

ABN AMRO Asia Pacific Pte Ltd Banking, Insurance and Financial Services 63,389 2.7 1.3 

Total 1,075,026 46.3 26.7 

Note: 

1 

Includes one-third interest in One Raffles Quay and one-third interest in Marina Bay Financial Centre Towers 1 and 2. 

RETAIL PORTFOLIO - TOP 10 TENANTS BY GROSS RENTAL INCOME 1 


Tenant business Sector nla % of % of Total 

(sq ft) RETAIL Monthly 

nla gross Rental 

income 

Carrefour Singapore Pte Ltd Hypermarket 137,404 13.2 2.0 

Rock Productions Pte Ltd Services / Educational 66,377 6.4 1.3 

FJ Benjamin Lifestyle Pte Ltd Fashion 13,859 1.3 0.8 

Lei Garden Restaurant Pte Ltd Food and Beverage 15,705 1.5 0.7 

RSH (Singapore) Pte Ltd Fashion 24,763 2.4 0.6 

Suntec Food & Leisure Pte Ltd Food and Beverage 27,008 2.6 0.6 

True Fitness Pte. Ltd. Services / Educational 29,708 2.8 0.5 

Jay Gee Enterprises (Pte.) Ltd Fashion 13,030 1.2 0.4 

Furniture & Furnishings Pte Ltd Homeware and Home Furnishings 20,584 2.0 0.4 

X-tra Designs Pte Ltd Homeware and Home Furnishings 22,298 2.1 0.4 

Total 370,736 35.5 7.7 

Note: 

1 

Includes one-third interest in One Raffles Quay, one-third interest in the Marina Bay Link Mall and 20 percent interest in Suntec Singapore International Convention & 

Exhibition Centre.



33 

Lease Expiry Profile 

In FY 2010, approximately 884,000 sq ft 

of office space was renewed and 

signed, including a pre-commitment of 

approximately 275,630 sq ft of office 

leases expiring in FY 2011. Therefore as 

at end FY 2010, 6.8%, 19.3% and 18.3% 

of the total office portfolio net lettable 

area are due to expire in FY 2011, 

FY 2012 and FY 2013 respectively, whilst 

54.4% is due to expire in FY 2014 and 

beyond. 

For the retail portfolio, as at end 

FY 2010, 25.5%, 30.3% and 27.0% of the 

total retail portfolio net lettable area are 

due to expire in FY 2011, FY 2012 and FY 

2013 respectively, whilst 15.2% is due to 

expire in FY 2014 and beyond. 

OFFICE PORTFOLIO 

RETAIL PORTFOLIO 

Lease Expiry Profile 1 




% 

50 

40 

43.3 

39.0 

% 

50 

40 

35 

30 

25 

35 

30 

25 

32.3 

25.5 

29.8 

27.0 

20 

15 

20 

15 

10 

5 

0 

8.9 

6.8 


17.3 19.3 

FY 2012 FY 2013 

17.4 18.3 15.4 

13.1 


% of Total Monthly Gross Office Rental Income 

% of Total Office NLA (sq ft) 

FY 2015 & 

Beyond 

10 

5 

0 


28.6 30.3 


% of Total Monthly Gross Retail Rental Income 

% of Total Retail NLA (sq ft) 

7.6 9.1 


1.7 

6.1 


Beyond 

1 

Includes one-third interest in One Raffles Quay and one-third interest in 

Marina Bay Financial Centre Towers 1 and 2. 

1 

Includes one-third interest in One Raffles Quay, one-third interest in 

the Marina Bay Link Mall and 20 percent interest in Suntec Singapore 

International Convention & Exhibition Centre.



35 

suntec city 

Suntec City is an iconic integrated commercial development located 

within the central business district of Singapore, within walking 

distance from the landmark Esplanade – Theatres by the Bay and in 

close proximity to the upcoming Downtown@Marina Bay. 

Developed by a consortium of successful business leaders from 

Hong Kong with a vision of making the complex “The Business 

Capital of Asia”, Suntec City is a landmark development which 

comprises five Grade A office towers, a world-class convention and 

exhibition centre, and one of Singapore’s largest shopping mall, 

all of which are interlinked by street level plazas and underground 

walkways. The world-famous Fountain of Wealth which sits in the 

heart of Suntec City, embodies an abundance of life and an endless 

variety of bustling activity. 

Suntec REIT owns 57% of Suntec City Office and 100% of Suntec 

City Mall, and in 2009, it acquired a 20 percent interest in Suntec 

Singapore International Convention and Exhibition Centre. Easily 

accessible by car and public transport networks, Suntec City houses 

a total of 3,073 carparks over two basement levels, and is directly 

linked to the Esplanade Station and Promenade Station on the new 

Circle MRT line, which has been operational since 17 April 2010. 

suntec city - PROPERTY STATISTICS 


Location 

3, 5, 6, 7, 8 and 9 Temasek Boulevard, 

Singapore 

Title Leasehold 99 years from 1989 

Total Net Lettable Area (sq ft) 2,123,083 

– Office 1,297,317 

– Retail 825,766 1 

Number of Tenants (actual) 519 

Car Park Lots 3,073 2 

Purchase Price (S$) 2,268 million 3 

Market Valuation (S$) 4,038 million 4 

Gross Revenue (S$) 

Net Property Income (S$) 

(31 December 2009: 3,798 million) 

216.7 million 5,6 (2009: 219.3 million) 

169.3 million 6 (2009: 167.9 million) 

Committed Occupancy (%) 98.6 1 (31 December 2009: 96.8) 

Notes: 

1 

Includes 20 percent interest in the retail net lettable area in Suntec Singapore International 

Convention & Exhibition Centre. 

2 

Owned and managed by the Management Corporation Strata Title Plan No. 2197 (MCST). 

3 

Includes the purchase price of 73,561.2 sq ft of strata office space amounting to S$136.3 million, 

and the investment of S$25 million for a 20 percent interest in the Suntec Singapore 

International Convention & Exhibition Centre. 

4 

Includes the value of a 20 percent interest in the Suntec Singapore International Convention 

& Exhibition Centre of S$57.6 million. 

5 

Comprises gross rental income of S$208.4 million and other income of S$8.3 million. 

6 

Excludes gross revenue and net property income from the 20 percent interest in the Suntec 

Singapore International Convention & Exhibition Centre. 

The Manager’s objective for Suntec City is to enhance the properties 

into one of Singapore’s leading retail and office properties.

36 



suntec city office 

Suntec REIT owns a net lettable area of 1,297,317 sq ft in Suntec 

City Office Towers, comprising strata units in Towers One, Two and 

Three, and all strata units in Towers Four and Five. Towers One 

to Four are 45-storey buildings of column-free floor space, whilst 

Tower Five is an 18-storey building with huge floor plates of up to 

28,000 sq ft. 

With quality buildings fronting the Marina Bay skyline and 

complemented by a wealth of amenities from the integrated 

shopping mall, Suntec City Offices draw a good stream of diverse 

multinational firms ranging from sectors such as Banking, Insurance 

and Financial Services, Technology, Services and Consultancy, 

Trading, Shipping and Freight Forwarding. 

diverse Tenant mix 

As at 31 December 2010, 29.7% of the total gross office revenue 

for the month of December 2010 was attributed to the Technology, 

Services and Consultancy sector, followed by 22.7% and 16.0% from 

the Banking, Insurance and Financial Services sector and the Trading 

sector respectively. 

In terms of net lettable area, as at 31 December 2010, 26.7% of 

Suntec City’s office net lettable area for the month of December 2010 

was attributed to the Technology, Services and Consultancy sector, 

followed by 26.5% and 14.8% from the Banking, Insurance and 

Financial Services sector and the Trading sectors respectively. 

The top 10 office tenants of Suntec City Office contributed 17.1% of 

Suntec City’s total gross revenue for the month of December 2010, 

representing 38.8% of the Suntec City office net lettable area owned 

by Suntec REIT. 


Based on the committed leases as at 31 December 2010, 10.0%, 

30.8% and 29.0% of Suntec City’s total office net lettable area is 

due to expire in FY 2011, FY 2012 and FY 2013 respectively, whilst 

29.3% is due to expire in FY 2014 and beyond. 


Business Sector Analysis (By Gross Rental Income) 





% 

40 

35 

30 

25 

20 

15 

10 

5 

0 

Legal 1.8% 


Trading 16.0% 

Manufacturing 1.1% 

Shipping and Freight Forwarding 8.1% 

Others 1.0% 

Government and Government-Linked Offices 6.8% 



Consultancy / Services 9.7% 

14.3 

10.0 


30.2 30.8 


29.4 29.0 

% of Monthly Gross Office Rental Income 

% of Office NLA (sq ft) 

28.2 

25.0 


1.1 1.1 


Beyond



37

38 



suntec city mall 

Suntec City Mall is one of Singapore’s largest malls and a leading 

shopping destination, with more than 370 retail establishments 

offering a unique one-stop shopping, dining, recreation and 

entertainment experience for many. It caters to the needs of the 

working population from the five office towers within Suntec 

City and office buildings in the vicinity, the daily flow of tourists 

and locals, as well as the vast network of local and international 

delegates who convene at Suntec Singapore International 

Convention & Exhibition Centre for exhibitions, seminars and 

conferences. 

Comprising 821,392 sq ft of net lettable retail space across three 

levels and a basement, Suntec City Mall is segmented into four 

thematic mall zones namely Galleria, the Tropics, the Fountain 

Terrace and the Entertainment Centre, each offering a variety of 

goods and services to appeal to the different market segments. 

In addition, there are five specialty zones, namely Happy Kidz, 

Tasty Treatz, e-life@Suntec, MPG and Galleria, which target various 

customer profiles and provide greater appeal to shoppers through 

a wider range of brands and enhanced shopping ambience. 

The exciting new tenants introduced into Suntec City Mall during 

the year included restaurants such as Ootoya, Killiney Café, Seoul 

Yummy and Gurney Drive; fashion boutiques Samuel & Kevin, Red 

2 and Bossini, and concept shops such as The Travel Store, Jivetime, 

Times the Bookstore, Flexa Shop, Furniture & Furnishings and 

Groove Dance School, amongst others. 

Vibrant Tenant mix 

As at 31 December 2010, 53.5% of the total gross retail revenue for the 

month of December 2010 was attributed to the Fashion and Food and 

Beverage sectors, and the remaining from other varied sectors such 

as the services / educational, hypermarket, leisure and entertainment 

and electronics sectors. 

In terms of net lettable area, as at 31 December 2010, 19.6% of Suntec 

City Mall’s net lettable area for the month of December 2010 was 

attributed to the Food and Beverage sector, followed by 17.3% and 

16.5% from the Hypermarket sector and Leisure and Entertainment/ 

Sports and Fitness sector respectively. 

The top 10 retail tenants of Suntec City Mall contributed 11.9% of 

Suntec City’s total gross revenue for the month of December 2010, 

representing 40.2% of the mall’s total net lettable area. 


Based on the committed leases as at 31 December 2010, 21.6%, 

31.3% and 28.1% of Suntec City’s total retail net lettable area is 

due to expire in FY 2011, FY 2012 and FY 2013 respectively, whilst 

16.9% is due to expire in FY 2014 and beyond. 

suntec city RETAIL 

Business Sector Analysis (By Gross Rental Income) 


suntec city RETAIL 



% 

40 

35 

30 

25 

20 

15 

10 

5 

0 


Fashion 28.0% 



Homeware and Home Furnishings 1.0% 

Hypermarket 6.9% 


Leisure and Entertainment / Sports and Fitness 7.2% 

Beauty and Healthcare 4.1% 

Others 4.8% 


31.1 

21.6 


28.5 

31.3 


30.6 

28.1 


% of Monthly Gross Retail Rental Income 

% of Retail NLA (sq ft) 

9.1 11.0 0.7 


5.9 


Beyond



39

40 





41 

suntec singapore 

international convention 

& exhibition centre 

Suntec Singapore International 

Convention and Exhibition Centre 

(“Suntec Singapore”) is a world-class 

venue located at the heart of Asia’s 

most integrated meetings, conventions 

and exhibitions hub. With more than 

one million sq ft of versatile floor space 

over six levels, this award-winning 

facility can cater to events from 10 to 

20,000 persons, offering direct access to 

5,200 hotel rooms, 1,000 retail outlets, 

300 restaurants within close proximity 

to Singapore’s entertainment and 

cultural attractions. 

Suntec REIT holds a 20 percent interest 

in Suntec Singapore through its whollyowned 

subsidiary. 

Since 1995, Suntec Singapore has hosted 

close to 15,000 events within its premier 

convention facility, including key 

notable events such as the World Trade 

Organization Ministerial Meetings 

in 1995, the Annual Meetings of the 

Board of Governors of the International 

Monetary Fund and World Bank Group 

in 2006 and the APEC Leaders Week 

in 2009. It served as one of the largest 

sporting venues for the inaugural Youth 

Olympic Games in 2010. 

Suntec Singapore has received numerous 

international, regional and local 

accolades and awards since its inception, 

in recognition of its high standards 

of service excellence, dedication and 

passion. In 2010, it has garnered 

the “Asia’s Leading Meetings and 

Conference Centre” award at the World 

Travel Awards 2010, “Best Convention 

and Exhibition Centre” award at the 

TTG Travel Awards 2010, “Silver Award 

– Best Overseas Conference Centre” 

at the Meetings and Incentive Travel 

Award 2010 and “Best Convention and 

Exhibition Centre” & “Best MICE Sales 

Team” awards at the CEI Asia Industry 

Awards 2010.

42 





43 

Park Mall 

Park Mall is an integrated office, lifestyle and home furnishing mall 

situated within the Orchard Road shopping belt. It is located next 

to Dhoby Ghaut MRT interchange station, a key transit hub for 

many commuters shuttling between the North-South line and the 

North-East line, and the new Circle MRT Line. Park Mall comprises 

a 15-storey office cum retail complex and has been conceptualised 

and launched as a premier furniture and lifestyle shopping mall. 

Major tenants at Park Mall's offices include Nu Skin Enterprise 

Singapore Pte Ltd, NUS Extension, Altron Education Group and Star 

Cruise Pte Ltd whilst major tenants at Park Mall's retail area include 

Furniture & Furnishings Pte Ltd, X-tra Designs Pte Ltd, Furniture 

Club Holdings Pte Ltd and OB Singapore Operations. 

As part of the future asset enhancement plan for Park Mall, the 

Manager acquired from the Singapore Government two strips of 

land along Penang Road in July 2007 and in March 2008 amounting 

to approximately 14,167 sq ft for amalgamation with Park Mall, 

at a total acquisition cost of S$15.1 million. The purchase prices of 

the two strips of land are based on the development charges rates 

issued by the Singapore Government. Together, the two strips of 

land will create an additional floor area of about 65,510 sq ft for 

the property, and increase the total permissible gross floor area 

for Park Mall to approximately 449,155 sq ft. 

PARK MALL - PROPERTY STATISTICS 


Location 9 Penang Road, Singapore 238459 


Total Net Lettable Area (sq ft) 

- Office 126,043 

- Retail 143,916 

269,959 (existing Park Mall area) 

Permissible Gross Lettable Area 

from acquired land (sq ft) 65,454 


Car Park Lots 346 

Purchase Price (S$) 245.1 million 1 

Market Valuation (S$) 

338 million 

(31 December 2009: 321 million) 




16.7 million (2009: 17.2 million) 

Committed Occupancy (%) 100.0 (31 December 2009: 100.0) 

Notes: 

1 

Includes the purchase price of 1,316.2 sq m of land along Penang Road amounting to 

S$15.1 million. 

2 


The Manager’s objective for Park Mall is to continue to optimise the 

current business returns and to position Park Mall for the future.

44 





45 

CHIJMES 

Chijmes is an award-winning gazetted national monument 

recognised by UNESCO as an Asia Pacific Culture Heritage 

Conservation development with two historic buildings, Caldwell 

House and the Chijmes Hall. A premier dining and entertaining 

establishment in the heart of Singapore’s Civic and Cultural District, 

Chijmes offers a variety of culinary delights, as well as a unique 

venue for selective performances and special events. 

The key annual events held at Chijmes include the Spanish Flamenco 

Festival, the Chijmes Jazz Festival, as well as live screenings of 

the English Premier League and UEFA Euro Cup soccer matches 

by tenants. Chijmes also played host to patrons of Singapore’s 

Formula One Grand Prix night race held in late September with a 

range of promotional activities and entertainment. 

Major tenants at Chijmes include Lei Garden Restaurant Pte Ltd, 

SFBI (Asia Pacific) Pte Ltd, Maracana Group Pte. Ltd. and Prime 

Cuisine Pte. Ltd. 

chijmes - PROPERTY STATISTICS 


Location 30 Victoria Street, Singapore 187996 


Net Lettable Area (sq ft) 79,794 



Purchase Price (S$) 

Market Valuation (S$) 



128 million 

134 million 

(31 December 2009: 131 million) 




Note: 

1 


The Manager’s objective for Chijmes is to continue to make it an exciting 

destination for all, and to enhance its value for our stakeholders.

46 





47 

ONE RAFFLES QUAY 

One Raffles Quay is a prime landmark commercial development 

located in Singapore’s central business district comprising a 

50-storey office tower (the “North Tower”), a 29-storey office tower 

(the “South Tower”), an underground link to the Raffles Place MRT 

station with excellent connectivity and accessibility along the 

North-South and East-West MRT lines, a sheltered plaza serving as 

a drop-off point and a hub car park with 713 car park lots. 

Designed by internationally renowned architectural firm Kohn 

Pedersen Fox Associates of New York, its state-of-the-art building 

services and management systems cater to the needs of global 

financial tenants. 

One Raffles Quay has a large and diversified tenant base comprising 

26 office tenants and five retail tenants. The major office tenants 

include ABN AMRO Asia Pacific Pte Ltd, Barclays Bank PLC, Credit 

Suisse (Singapore) Limited, Deutsche Bank Aktiengesellschaft, Ernst 

& Young Services Pte. Ltd. and UBS AG. 

In equal partnership with reputable property companies 

Hongkong Land and K-REIT Asia, Suntec REIT holds a one-third 

interest in One Raffles Quay through the acquisition of the entire 

issued share capital of Comina Investment Limited, a special 

purpose company holding one-third of the issued share capital of 

One Raffles Quay Pte Ltd, the developer and owner of the property. 

A prestigious iconic prime grade ‘A’ office development with long 

term growth potential, One Raffles Quay is well-positioned to 

capitalise on the future growth of the Marina Bay area, given its 

proximity to Marina Bay. 

One raffles quay - PROPERTY STATISTICS 





Legal 5.3% 


Others 1.6% 



Clinics / Laboratories 0.3% 



Location One Raffles Quay, Singapore 048583 



Net Lettable Area 1 (sq ft) 445,120 



Purchase Price 1 (S$) 

Market Valuation 1 (S$) 

Net Property Income 2 (S$) 

941.5 million 

1,023 million 

(31 December 2009: 934.9 million) 



Notes: 

1 

Reflects one-third interest. 

2 

Comprises other income, dividend income and interest income from the jointly controlled 

entity net of all taxes. 

Strong Tenant mix 

As at 31 December 2010, 90.2% of the total gross revenue for the 

month of December 2010 was attributed to the Banking, Insurance and 

Financial Services sector. 

1 





% 

90 

80 

70 

60 

50 

40 

30 

20 

10 

0 

6.2 3.3 1.5 1.1 


% of Monthly Gross Rental Income 

% of NLA (sq ft) 

1 


9.1 7.9 

1.8 1.4 


81.4 86.3 


& Beyond 


Based on the committed leases as at 31 December 2010, 13.7% of 

One Raffles Quay’s total net lettable area is due to expire during the 

period from FY 2011 to FY 2014, whilst 86.3% is due to expire in FY 

2015 and beyond. 

The Manager’s objective for One Raffles Quay is to 

generate sustainable growth from its interest in the 

property for Suntec REIT unitholders.

48 





49 

MBFC Properties 

The Marina Bay Financial Centre is a prime landmark commercial 

development strategically located in the heart of Marina Bay. 

Designed by the internationally renowned architectural firm Kohn 

Pedersen Fox Associates of New York, Phase 1 of the development 

comprises a 33-storey office tower (“Tower 1”), a 50-storey office 

tower (“Tower 2”), Marina Bay Residences, the Marina Bay Link 

Mall which consists of approximately 94,464 sq ft of net lettable 

area for retail use including the ground levels of Tower 1 and 

Tower 2 and the Ground Plaza, and 695 car park lots. There is an 

underground link from Marina Bay Link Mall to the Raffles Place 

MRT Station, and is directly connected to the future Downtown 

MRT Station when it is operational around 2013. 

The MBFC Properties has a premier tenant base, with major office 

tenants including American Express International, Bank Pictet, 

Barclays Capital, BHP Billiton, ICAP, Macquarie Capital Securities, 

Murex Southeast Asia Pte Ltd, Nomura Singapore and Standard 

Chartered Bank. 

In equal partnership with reputable property companies Hongkong 

Land and Keppel Land Limited, Suntec REIT holds a one-third 

interest in the MBFC Properties through the acquisition of 

one-third of the issued share capital of BFC Development Pte. Ltd. 

The MBFC Properties comprises the office and retail properties 

under Phase 1 but does not include the Marina Bay Residences. 

The Marina Bay Sands Integrated Resort, Singapore Flyer, Gardens 

by the Bay, Esplanade Theatres, international and boutique hotels, 

residential apartments and waterside food and beverage outlets 

are all within close proximity. 

MBFC PROPERTies - PROPERTY STATISTICS 


Location 8 Marina Boulevard, Singapore 018981 



Net Lettable Area 1 (sq ft) 582,466 



Purchase Price 1 (S$) 

1,495.8 million 

Market Valuation 1 (S$) 1,511.0 million (30 September 2010: 

1,496 million (CB Richard Ellis (Pte) Ltd); 

1,497 million (Knight Frank Pte Ltd)) 

Net Property Income 2 (S$) 

2.3 million 

Committed Occupancy (%) 96.5 

Notes: 

1 


2 

For the period of 9 December to 31 December 2010. Comprises other income and interest 

income from the jointly controlled entity net of all taxes. 

strong Tenant mix 

As at 31 December 2010, 69.1% of the total gross revenue for the 

month of December 2010 was attributed to the Banking, Insurance and 

Financial Services sector. 


Based on the committed leases as at 31 December 2010, 3.8% of the 

total net lettable area of the MBFC Properties is due to expire during 

the period from FY 2011 to FY 2014, whilst 92.7% is due to expire in 

FY 2015 and beyond. 

mBFC Properties 



Legal 2.4% 


Trading 18.5% 




Fashion 0.5% 





Services/Educational 1.5% 

Others 0.2% 

1 


mBFC Properties 



% 

100 

90 

80 

70 

60 

50 

40 

30 

20 

10 

0 

0.5 0.5 


0.0 

0.0 


% of Monthly Gross Rental Income 

% of NLA (sq ft) 

1 


4.1 2.9 0.4 0.4 


95.0 92.7 


& Beyond 

The Manager’s objective for the MBFC Properties is 

to generate sustainable growth from its interest in 

the property for Suntec REIT unitholders.

50 



Market Report 

The Singapore Office Market 

Overview 

The office market turned around in 

2010, after suffering a fall of 46% to 

51% in rental values in the city centre 

in 2009. Business sentiments improved 

significantly in 2010 with strong economic 

growth. The financial services sector grew 

by 12.2% while the business services 

sector expanded by 5.9% in 2010, more 

than the 4.3% growth in each sector in 

2009. Companies in these two sectors are 

major occupiers of office space. 

Occupiers grew more confident in securing 

new space and renewing leases, leading 

to a strong recovery in demand. Besides 

existing businesses taking up more 

space, new entrants increased in number 

spanning across various industries such 

as the tourism, oil and gas, IT, legal and 

financial services. There is strong interest 

in new or soon-to-be completed office 

blocks by occupiers who are looking to 

consolidate and expand their office space. 

Outlook 

With economic growth forecast of 4% to 

6% for 2011, the office sector is expected to 

be on the upward trend. The government 

expects the services sector to contribute as 

much as two-thirds of GDP growth in 2011. 

Demand for office space will continue to be 

strong with many firms intending to hire to 

supplement their business expansion plans. 

Nevertheless, with a slower economic 

growth expected in 2011 and a significant 

amount of new space completing in 

the year, the pace of rental increase is 

expected to be more moderate at about 

9%-12%. A substantial 3.0 million sq 

ft of office space is estimated to be 

completed in 2011, mainly in Marina 

Bay and Raffles Place (Figure 2). The net 

increase in supply is however expected 

to be lower at about 2.2 million sq ft 

due to the removal of some existing 

buildings for redevelopment. 

Downward pressure on the occupancy 

rates of older secondary buildings 

is expected as occupiers move to 

the better quality buildings that are 

being vacated. Hence there could be 

a 2- speed rental growth trend due to 

strong demand for newer office space 

while landlords seek to retain tenants 

in the older office developments with 

competitive rents. 

As the slow economic growth in the 

US and Europe is still holding back 

widespread expansion among occupiers 

whose headquarters are based in these 

major economies, the upside potential is 

for rents to grow faster than forecasted 

should these economies grow more 

strongly than expected. 

As a result of the upturn in demand which 

outstripped the 2.4 million sq ft of net 

increase in supply in 2010, average office 

occupancy rates were on an upward trend 

throughout 2010. The average islandwide 

office occupancy rate rose from 91.7% in 

Q4 2009 to 95.4% in Q4 2010. In Raffles 

Place, the average office occupancy rate 

grew from 90.5% in Q4 2009 to 96.7% in 

Q4 2010. 

The completion of Marina Bay Financial 

Centre (MBFC) in 2010 more than doubled 

the office stock at Marina Bay. However, 

occupancy at Marina Bay remained 

high due to the new space being precommitted 

before completion. 

Figure 1 

Average office gross rental values 

$ per sq ft per month 

20.0 

18.0 

16.0 

14.0 

12.0 

10.0 

8.0 

6.0 

4.0 

2.0 

0.0 

Raffles Place Grade A 

2001 

2002 

2003 

Marina Centre 

2004 

2005 

Shenton Way/Bobinson Rd/Cecil St 

2006 

2007 

2008 

Source: DTZ Research, February 2011 

2009 


Prime offices led the increase in rents in 

2010 as occupiers took the opportunity 

to lock in attractive rents at the bottom 

of the cycle. The average prime gross rent 

in Raffles Place, which bottomed at $7.80 

per sq ft per month in the first quarter of 

2010, rose 1.3% in Q2 2010. The pace of 

increase accelerated in the second half of 

the year, by 6.3% in Q3 2010 and 7.1% in 

Q4 2010. By end 2010, prime office gross 

rents in Raffles Place have risen 13.9% 

year-on-year to $9.00 per sq ft per month. 

For the whole of 2010, rents in the city 

centre rebounded by 8.3% to 13.9%, as 

the economy expanded at a record high 

rate of 14.5% (Figure 1). 

Figure 2 

Source: URA, DTZ Research, February 2011 

office development pipeline by location (2011-2015) 

Marina Bay 

Raffles Place 

Shenton Way/Bobinson Rd/Cecil St 

Others 

sq ft (000s) 

3,200 

2,800 

2,400 

2,000 

1,600 

1,200 

800 

400 

0.0 

2011 

2012 2013 2014 2015



51 

The Singapore Retail Market 

Overview 

With demand still adjusting to supply 

conditions in the industry, rental 

performance in the retail sector was 

generally mixed in 2010. 

Rents in the other city areas outside 

Orchard/Scotts Road saw the largest drop 

in 2010, due to a flood of new retail 

offerings from developments such as The 

Shoppes at Marina Bay Sands and Marina 

Bay Link Mall. Average fixed gross rents 

for first-storey prime retail space in this 

micromarket fell 2% year-on-year (YOY) 

to $23.90 per sq ft per month in Q4 2010 

(Figure 3). 

Malls in the Orchard/Scotts Road area 

fared slightly better. After a significant 

release of 1.5 million sq ft of new retail 

space in the Orchard/Scotts Road area in 

2009 and 2010, supply there is headed 

for a breather in 2011 and 2012. The 

average fixed gross rent of prime firststorey 

space in Orchard/Scotts Road 

edged higher by 0.3% YOY to $39.80 per 

sq ft per month in Q4 2010 after staying 

flat for three quarters. 

As suburban malls have stable catchment 

demand, rents there are more resilient 

as compared to the malls in the Orchard/ 

Scotts Road and other city areas. The 

average fixed gross rents in suburban 

malls moved up by a stronger 0.6% YOY in 

Q4 2010 to $33.70 per sq ft per month. 

Outlook 

While the mood is upbeat, retailers are 

increasingly concerned about rising costs. 

Retail sales will also be affected by the 

continued strength of the Singapore 

dollar, which could affect tourist spending 

and result in a higher incidence of 

Singaporeans travelling overseas. More 

Singaporeans are also turning to shopping 

through the Internet. 

Competition in the retail scene will remain 

intense as consumers are spoilt with more 

retail choices. Nevertheless, with little new 

supply expected in 2011 and 2012 along 

the premier Orchard Road/Scotts Road 

shopping belt, prime rents are expected to 

increase by 2%-3.0% in 2011. 

Rents in other city areas are also expected 

to improve in 2011, as spillover traffic 

from the Marina Bay Sands integrated 

resort have been observed in nearby malls 

particularly those with high accessibility 

via the mass transit lines. 

Figure 3 

Average retail gross fixed rental values 

Orchard/Scotts Rd 

$ per sq ft per month 

45 

40 

35 

30 

Other city areas 

In contrast, rents at suburban malls are 

expected to rise more moderately as more 

than half of the 3 million sq ft of new 

supply of new retail space will be in the 

suburban areas (Figure 4). 

Suburban areas 

Source: DTZ Research, February 2011 

With the retail sales index excluding sales 

of motor vehicles up 5.6% in 2010 and 

tourist receipts surging 49% in the same 

period to a record $18.8bn, the retail 

sector will continue to benefit from the 

growth of regional economies as well 

as the integrated resorts, which have 

boosted tourist arrivals significantly. 

The robust economic performance has also 

led to a tight labour market. According to 

data from the Ministry of Manpower, 

real wages had risen by an average of 

2.5% YOY for the first nine months of 

2010. Higher spending power and low 

unemployment, which fell to 2.2% in 

2010 from 3.0% 2009, are bolstering 

domestic consumption. 

25 

20 

Figure 4 

2001 

2002 

2003 

2004 

2005 

2006 

2007 

retail development pipeline by location (2011-2015) 

Orchard/Scotts Rd 

Other city areas 

Suburban areas 

sq ft (000s) 

1,000 

800 

600 

400 

200 

2008 

2009 


Source: URA, DTZ Research, February 2011 

0.0 

2011 

2012 2013 2014 2015

52 



Investor Communications 

The Manager is committed towards 

upholding the utmost standards of 

accountability to Suntec REIT’s 

unitholders. It achieves this through 

good corporate transparency practices, 

maintaining an active channel of 

communication for investors, analysts 

and other stakeholders to access 

accurate and timely information on 

Suntec REIT, and in working towards 

fostering good long-term relationships 

with its stakeholders. 

The senior management team of the 

Manager has held regular meetings 

and conference calls with institutional 

investors throughout the year. Our 

participation in various key regional 

equity and property conferences has 

also enabled us to remain accessible to 

investors and the opportunity to provide 

key strategic and performance updates 

on Suntec REIT. The Manager also held 

the inaugural annual general meeting 

of Suntec REIT unitholders in April 

2010, and two extraordinary general 

meetings in April 2010 and November 

2010, all of which were well-attended 

by retail investors. It was an opportune 

time for senior management to actively 

engage retail investors in their enquiries 

and discussions about Suntec REIT. 

The Manager conducts regular postresults 

analyst and media briefings 

every six months subsequent to the 

release of the first-half and full-year 

financial results. There is extensive 

coverage on Suntec REIT, with research 

coverage by analysts from 19 local 

and foreign brokerage firms to date, 

providing a global reach to unitholders 

and potential investors worldwide. 

In recognition of its good corporate 

transparency practices, Suntec REIT 

was conferred a Runner-up Award 

for the “Most Transparent Company 

Award 2010” under the REITs category 

in the SIAS Investors’ Choice Awards 

2010. This is the fifth year that Suntec 

REITs has received the award for 

corporate transparency. Suntec REIT 

has also won a Gold Award for the 

Suntec REIT Annual Report 2009 under 

the REIT-Industrial/Office category 

at the International GALAXY 2010 

Awards competition. The award is in 

recognition of the values of creativity, 

effectiveness, performance and 

success exemplified in professional 

communications. 

The Suntec REIT website is regularly 

updated with current financial and 

corporate information on Suntec REIT, 

including press releases, announcements, 

corporate earnings results and other key 

information. Users can access the website 

at www.suntecreit.com to download 

these reports. 

UNITHOLDER ENQUIRIES 

For more information on Suntec REIT 

and its operations, please contact the 

Manager, ARA Trust Management 

(Suntec) Limited via the following: 

Telephone: +65 6835 9232 

Fax: +65 6835 9672 

Email: enquiry@suntecreit.com 

Website: www.suntecreit.com 

PROPOSED 2011/2012 

CALENDAR 

April 2011 

• Annual General Meeting 

• Announcement of the first 

quarter results 

May 2011 

• Books closure date to determine 

the first quarter distribution 

entitlement 

• The first quarter distribution 

July 2011 

• Announcement of the second 

quarter and half-year results 


the second quarter distribution 

entitlement 

August 2011 

• The second quarter distribution 

October 2011 

• Announcement of the third 

quarter results 

November 2011 


the third quarter distribution 

entitlement 

• The third quarter distribution 

January 2012 

• Announcement of the fourth 

quarter and full year results 

February 2012 


the fourth quarter distribution 

entitlement 

• The fourth quarter distribution

PASSIOn to deliver 


53 

Corporate 

Governance 

Corporate Governance 54 

Financial Contents 

REPORT OF THE TRUSTEE 64 

STATEMENT BY THE MANAGER 65 

INDEPENDENT AUDITORS’ REPORT 66 

BALANCE SHEETS 67 

STATEMENTS OF TOTAL RETURN 68 

DISTRIBUTION STATEMENTS 69 

STATEMENTS OF MOVEMENTS 

IN UNITHOLDERS’ FUNDS 71 

PORTFOLIO STATEMENTS 72 

CONSOLIDATED STATEMENT OF CASH FLOWS 75 

NOTES TO THE FINANCIAL STATEMENTS 76 

STATISTICS OF UNITHOLDINGS 111 

ADDITIONAL INFORMATION 113 

Notice of Annual General Meeting 114 

CORPORATE DIRECTORY 117 

PROXY FORM 119

54 

Passion to Deliver 


Corporate Governance 

ARA Trust Management (Suntec) Limited, as the Manager of Suntec REIT (the “Manager”), has adopted an overall corporate 

governance framework designed to meet best practice principles. The Manager also recognises that an effective corporate 

governance culture is critical to its performance and consequently, the success of Suntec REIT, which it manages. In particular, 

the Manager has an obligation to act honestly, with due care and diligence, and in the best interest of Suntec REIT unitholders 

(“Unitholders”). 

The following segments describe the Manager’s main corporate governance policies and practices. They encompass proactive 

measures for avoiding situations of conflict and potential conflict of interest, including prioritising the interests of the 

Unitholders over the Manager’s, ensuring that applicable laws and regulations are complied with, and that the Manager’s 

obligations under the Trust Deed (as defined below) are properly and efficiently carried out. The Manager confirms that it has 

adhered to the principles and guidelines as set out in the Code of Corporate Governance 2005 (the “Code”) where applicable, 

and has specified and explained areas of non-compliance. 

THE MANAGER OF SUNTEC REIT 

The Manager has general powers of management over the assets of Suntec REIT. The Manager’s main responsibility is to manage 

Suntec REIT’s assets and liabilities in the best interest of Unitholders. 

The primary role of the Manager is to set the strategic direction of Suntec REIT and make recommendations to HSBC Institutional 

Trust Services (Singapore) Limited, as trustee of Suntec REIT (the “Trustee”), on the acquisition, divestment and enhancement of 

assets of Suntec REIT in accordance with its stated investment strategy. 

Other main functions and responsibilities of the Manager include: 

1. using its best endeavours to ensure that the business of Suntec REIT is carried out and conducted in a proper and efficient 

manner and to conduct all transactions with or for Suntec REIT at arm’s length and on normal commercial terms. 

2. preparing property reports on a regular basis, which may contain forecasts on net income, capital expenditure, sales 

and valuations, explanations of major variances to previous forecasts, written commentary on key issues and underlying 

assumptions on inflation, annual turnover, occupancy costs and any other relevant assumptions. The purpose of these 

reports is to monitor and explain the performance of Suntec REIT’s assets. 

3. ensuring compliance with the applicable provisions of the Securities and Futures Act, Chapter 289, of Singapore and 

all other relevant legislation, the Listing Manual of the Singapore Exchange Securities Trading Limited (the “SGX-ST”) 

(the "Listing Manual"), the Code on Collective Investment Schemes ("CIS Code") issued by Monetary Authority of 

Singapore (“MAS”), including the Property Funds Appendix, the Trust Deed (as amended), the tax ruling dated 15 June 

2004 issued by the Inland Revenue Authority of Singapore and all relevant contracts. 

4. attending to all regular communications with Unitholders. 

5. supervising the Property Managers which provide property management, lease management, marketing and 

marketing co-ordination services in relation to Suntec REIT’s properties pursuant to the respective property 

management agreements. 

Suntec REIT, constituted as a trust, is externally managed by the Manager and accordingly, it has no personnel of its own. 

The Manager appoints experienced and well-qualified management to handle its day-to-day operations. The Manager is 

appointed in accordance with the terms of the Trust Deed dated 1 November 2004 as amended by a First Supplemental Deed 

dated 25 January 2006, a Second Supplemental Deed dated 20 April 2006, a Third Supplemental Deed dated 30 July 2007, a 

Fourth Supplemental Deed dated 11 October 2007, a Fifth Supplemental Deed dated 29 September 2008, a Sixth Supplemental 

Deed dated 14 April 2010 and a First Amending and Restating Trust Deed dated 7 September 2010 (collectively, the “Trust Deed”). 

The Trust Deed outlines certain circumstances under which the Manager can be removed by notice in writing given by the 

Trustee in favour of a corporation appointed by the Trustee, upon the occurrence of certain events, including the Unitholders 

by a resolution passed by a simple majority of Unitholders, present and voting at a meeting of Unitholders, duly convened and 

held in accordance with the provisions of the Trust Deed. 

On 8 October 2010, the Manager was granted a Capital Markets Services Licence (“CMS Licence”) by the MAS to carry out real 

estate investment trust ("REIT") management activities as required under the new licensing regime for REIT managers.



55 


THE BOARD’S CONDUCT OF AFFAIRS 

Principle 1 

Every company should be headed by an effective Board to lead and control the company. The Board is 

collectively responsible for the success of the company. The Board works with Management to achieve this and 

the Management remains accountable to the Board. 

The Board of Directors of the Manager (the “Board”) is entrusted with responsibility for the overall management of the 

Manager. The Board is responsible for the overall corporate governance of the Manager including establishing goals for 

managing and monitoring the achievement of these goals. The Board is also responsible for the strategic business direction and 

risk management of Suntec REIT. All Board members participate in matters relating to corporate governance, business operations 

and risks, financial performance and the nomination and appointment of directors. The Board has established a framework for 

the management of the Manager and Suntec REIT, including a system of internal controls and a risk management process. 

The Board meets regularly to review the Manager’s key activities. Board meetings are held once every quarter (or more often if 

necessary) to discuss and review the strategies and policies of Suntec REIT, including any significant acquisitions and disposals, 

the annual budget, the financial performance of Suntec REIT against a previously approved budget and to approve the release 

of quarterly, half year and full year results. The Board also reviews the risks to the assets of Suntec REIT and acts upon any 

comments from the auditors of Suntec REIT. Where necessary, additional Board meetings would be held to address significant 

transactions or issues. The Articles of Association of the Manager permits Directors’ participation in meetings by way of teleconference 

or video conference. 

Four Board meetings were held during the financial year ended 31 December 2010 (“FY 2010”). 

The Board has adopted a set of internal controls which it believes is adequate and appropriate delegation of authority has 

been provided to Management of the Manager (“Management“) to facilitate operational efficiency and which includes, 

among other things, approval limits for capital expenditure and operating of bank accounts. Apart from matters that 

specifically require approval from the Board, the Board approves transactions exceeding certain threshold limits, while 

delegating authority for transactions below those limits. 

Changes to regulations, policies and accounting standards are monitored closely. Where the changes have an important impact 

on Suntec REIT and its disclosure obligations, the Directors are briefed either during a Board meeting, at specially convened 

sessions or via circulation of Board papers. Relevant updates, news releases issued by the SGX-ST and the Accounting and 

Corporate Regulatory Authority (“ACRA”) will also be circulated to the Board for information. 

Newly appointed Directors to the Board are briefed on the business activities of Suntec REIT and its strategic directions. 

BOARD COMPOSITION AND GUIDANCE 

Principle 2 

There should be a strong and independent element on the Board, which is able to exercise objective judgement 

on corporate affairs independently, in particular, from Management. No individual or small group of individuals 

should be allowed to dominate the Board’s decision making. 

The Board presently comprises ten members, four of whom are independent. The Chairman of the Board is Mr. Chiu Kwok 

Hung, Justin. 

The composition of the Board is determined using the following principles: 

1. the Chairman of the Board should be a Non-executive Director; 

2. the Board should comprise Directors with a broad range of commercial experience including expertise in fund management 

and the property industry; and 

3. at least one-third of the Board should comprise Independent Directors. 

The composition of the Board is reviewed regularly to ensure that the Board has the appropriate mix of expertise and experience.

56 




The Board welcomed a new member in 2010. Mr. Chen Wei Ching, Vincent joined the Board in October 2010 as an Independent 

Director and was appointed a member of the audit committee and designated committee. Mr. Chen brings with him more than 

20 years experience in the banking and finance industry. 

The Board is of the view that its current composition of persons who as a group provide the necessary core competencies, 

is adequate and that the current Board size is appropriate, taking into consideration the nature and scope of Suntec REIT’s 

operations. 

Profiles of the Directors and other relevant information are set out on Pages 12 to 15 of this Annual Report. 

At least one-third of the Board comprises Independent Directors. This enables Management to benefit from their objective 

perspective of issues that are brought before the Board. A healthy exchange of ideas and views between the Board and 

Management through regular meetings and updates will enhance the management of Suntec REIT. This, together with a clear 

separation of roles between Chairman and Chief Executive Officer (“CEO”), provide a healthy and professional relationship 

between the Board and Management. 

Non-executive Directors contribute to the Board process by maintaining and reviewing Management’s performance against 

goals and objectives. Their views and opinions provide alternative perspectives to Suntec REIT’s business. 

When reviewing Management proposals or decisions, the Non-executive and Independent Directors bring objective and 

unbiased judgement to bear on business activities and transactions involving conflict of interest and other complexities. 

DESIGNATED COMMITTEE 

The designated committee (“DC”) was constituted by the Board on 26 October 2010 to assist in the discharge of its responsibilities 

and it comprises the following members: 

• Mr. Chow Wai Wai, John 

Chairman 

• Mr. Tan Kian Chew 

Member 

• Mr. Chen Wei Ching, Vincent 

Member 

• Ms. Seow Bee Lian, Cheryl 

Member* 

*Ms. Seow is the Group Finance Director of ARA Asset Management Limited. 

The DC has adopted a written terms of reference. Its primary duty is to assist the Board: 

1. in reviewing Management’s proposal on the structure of financing and refinancing strategies for recommendation to the 

Board for approval; and 

2. in reviewing and approving Management’s proposal on hedging strategies, financing and re-financing arrangements and 

transactions involving derivative instruments for hedging purposes. 

The DC would also undertake other reviews and projects as may be requested by the Board.



57 


MEETING ATTENDANCE 

The matrix of Board members’ participation in meetings of the Board and its Board Committees and attendance thereat for 

FY 2010 are as follows: 

Board Meeting 

Audit Committee 

Meetings 

Designated Committee 

Meetings 

Board Members 

Participation 

Attendance/ 

Number of 

Meetings 

Participation 

Attendance/ 

Number of 

Meetings 

Participation 

Attendance/ 

Number of 

Meetings 

Mr. Chiu Kwok Hung, 

Chairman 4/4 NA NA NA NA 

Justin 

Mr. Lim Hwee Chiang, 

Member 4/4 NA NA NA NA 

John 

Mr. Ip Tak Chuen, 

Member 4/4 NA NA NA NA 

Edmond (Alternate 

Director – Mr. Ma Lai Chee, 

Gerald) 

Mr. Tan Kian Chew Member 4/4 Chairman 5/5 Member 1/1 

Mrs. Sng Sow-Mei 

Member 4/4 Member 5/5 NA NA 

(alias Poon Sow Mei) 

Mr. Lim Lee Meng Member 4/4 Member 5/5 NA NA 

Mr. Chen Wei Ching, 

Vincent 

Mr. Chow Wai Wai, 

John 

Member 1/1 Member 2/2 Member 1/1 

Member 4/4 NA NA Chairman 1/1 

Mr. Yeo See Kiat Member and CEO 4/4 CEO NA CEO NA 

CHAIRMAN AND CHIEF EXECUTIVE OFFICER 

Principle 3 

There should be a clear division of responsibilities at the top of the company – the working of the Board and the 

executive responsibility of the company’s business – which will ensure a balance of power and authority, such that 

no one individual represents a considerable concentration of power. 

The roles of Chairman and CEO are separate and held by Mr. Chiu Kwok Hung, Justin and Mr. Yeo See Kiat respectively. 

The Chairman leads the Board and ensures that its members work together with Management in a constructive manner to 

address strategies, business operations and enterprise issues. The CEO has full executive responsibilities over the business 

direction and operational decisions of managing Suntec REIT. 

BOARD MEMBERSHIP AND PERFORMANCE 

Principle 4 

Principle 5 

There should be a formal and transparent process for the appointment of new directors to the Board. 

There should be a formal assessment of the effectiveness of the Board as a whole and the contribution by each 

director to the effectiveness of the Board. 

As the Manager is not itself a listed entity, the Manager does not consider it necessary for the Board to establish a nominating 

committee. The Manager believes that contributions from each Director go beyond his/her attendance in meetings of the 

Board and its Board Committees and are reflected in the long term success of Suntec REIT. The Board performs functions that a 

nominating committee would perform, namely, tabling nominations to the Board, reviewing the structure, size and composition 

of the Board and reviewing the independence of Board members.

58 




In reviewing and recommending the appointment of new Directors, the Board takes into consideration the current Board size 

and mix, and the principles outlined earlier in this statement. The Board also reviews the candidate’s ability to contribute to the 

proper guidance of the Manager in its management of Suntec REIT. 

The independence of Directors is reviewed upon appointment and thereafter annually by the Board. 

Reviews of Board performance as appropriate are informal. Renewal or replacement of Board members do not necessarily 

reflect their contributions to-date, but may be driven by the needs of Suntec REIT and its business. The Manager believes that 

Board performance would be better reflected and evidenced by proper guidance, diligent oversight and able leadership and 

support that it lends to the Management to steer Suntec REIT’s performance under favourable or challenging market conditions. 

Ultimately, the interests of Suntec REIT will be safeguarded and reflected by maximisation of Unitholder’s value. 

ACCESS TO INFORMATION 

Principle 6 

In order to fulfil their responsibilities, Board members should be provided with complete, adequate and timely 

information prior to Board meetings and on an on-going basis. 

Management provides complete, adequate and timely information to the Board on Board affairs and issues that require the 

Board’s decision. Explanatory background information relating to matters to be brought before the Board, budgets, and copies 

of relevant disclosure documents are usually provided. In relation to budgets, any material variance between projections and 

actual results are disclosed and explained to the Board. 

The CEO keeps Board members abreast of key developments affecting Suntec REIT as well as material transactions so that the 

Board is kept fully aware of the affairs of Suntec REIT. All Directors have separate and independent access to Management, 

the Company Secretary, internal and external auditors at all times. 

The Company Secretary attends all Board meetings and assists the Board in ensuring that Board procedures and all other 

rules and regulations applicable to the Manager are complied with. The Company Secretary works with the Chairman to ensure 

that information flows within the Board and its Board Committees and between senior management and the Non-executive 

Directors. The Company Secretary will assist with professional development and training for Directors when required to do so. 

The appointment and the removal of the Company Secretary shall be reviewed by the Board. 

The Manager has in place procedures to enable Directors, whether as a group or individually, to obtain independent 

professional advice as and when necessary, in furtherance of their duties, at the Manager’s expense. The appointment of such 

independent professional advisors is subject to approval by the Board. 

REMUNERATION MATTERS 

Principle 7 

Principle 8 

Principle 9 

There should be a formal and transparent procedure for developing policy on executive remuneration and 

for fixing the remuneration packages of individual directors. No director should be involved in deciding his 

own remuneration. 

The level of remuneration should be appropriate to attract, retain and motivate the directors needed to run the 

company successfully but companies should avoid paying more than is necessary for this purpose. A significant 

proportion of executive directors’ remuneration should be structured so as to link rewards to corporate and 

individual performance. 

Each company should provide clear disclosure of its remuneration policy, level and mix or remuneration, and the 

procedure for setting remuneration in the company’s annual report. It should provide disclosure in relation to its 

remuneration policies to enable investors to understand the link between remuneration paid to directors and key 

executives, and performance. 

All directors and employees of the Manager are remunerated by the Manager, and not Suntec REIT.



59 


ACCOUNTABILITY 

Principle 10 

The Board should present a balanced and understandable assessment of the company’s performance, position 

and prospects. 

The Board seeks to keep Unitholders updated on Suntec REIT’s financial performance, position and prospects through quarterly 

and annual financial reports as well as timely announcements on developments in its businesses. Quarterly results are released 

to Unitholders within 45 days of the reporting period while the full year results are released to Unitholders within 60 days of the 

financial year end. In presenting the financial reports, the Board aims to provide a balanced and understandable presentation 

of Suntec REIT’s financial performance, position and prospects. 

Management provides the Board with a continual flow of relevant information on the performance on a timely basis in order 

that the Board may effectively discharge its duties. 

AUDIT COMMITTEE 

Principle 11 

The Board should establish an Audit Committee with written terms of reference which clearly set out its authority 

and duties. 

The Board has established an audit committee ("AC") to assist in the discharge of its responsibilities. 

The AC comprises four Independent Directors, namely: 

• Mr. Tan Kian Chew 

• Mrs. Sng Sow-Mei (alias Poon Sow Mei) 

• Mr. Lim Lee Meng 

• Mr. Chen Wei Ching, Vincent 

Chairman 

Member 

Member 

Member 

The AC members have professional expertise and experience in financial and business management fields. The Board is of the 

view that members of the AC are appropriately qualified, with the necessary accounting and financial management expertise. 

Five AC meetings were held in FY 2010. 

In keeping with best practices in corporate governance, the Board has established that a majority of members of the AC 

(including the Chairman) shall be Independent Directors. 

The role of the AC is to monitor and evaluate the effectiveness of the Manager’s internal controls. The AC also reviews the quality 

and reliability of information prepared for inclusion in financial reports and any formal announcements relating to Suntec REIT’s 

financial performance. The AC is responsible for the nomination of external auditors and for reviewing the adequacy of existing 

audits in respect of cost, scope and performance. The AC meets with the external auditors and the internal auditors, without the 

presence of Management, at least once annually. 

In FY 2010, the AC had met with the internal and external auditors without the presence of Management. The internal 

and external auditors had confirmed that they had full access to and had received the full co-operation and support 

of Management.

60 




The AC has adopted a written terms of reference defining its scope of authorities and responsibilities which include: 

1. reviewing external and internal audit reports to ensure that where any deficiency in internal controls has been identified, 

appropriate and prompt remedial action is taken by Management; 

2. monitoring procedures in place to ensure compliance with applicable legislation, the Listing Manual and the Property 

Funds Appendix; 

3. reviewing and approving the financial statements and auditors’ report; and 

4. monitoring procedures established to regulate Related Party Transactions (as defined below), including ensuring 

compliance with the provisions of the Listing Manual relating to transactions between the Trustee and an “interested 

person’’, and the provisions of the Property Funds Appendix relating to transactions between the Trustee and an 

“interested party’’ (both such types of transactions constituting "Related Party Transactions"). 

The AC is authorised to investigate any matters within its terms of reference. It is entitled to full access to and co-operation by 

Management and has full discretion to invite any Director or executive officer of the Manager to attend its meetings. The AC 

has full access to resources to enable it to discharge its functions fully. 

The AC has also conducted a review of all non-audit services provided by the external auditors and is satisfied that the nature 

and extent of such services will not prejudice the independence and objectivity of the external auditors. 

The AC, with the concurrence of the Board, has recommended the re-appointment of KPMG LLP as the external auditors of 

Suntec REIT at the forthcoming annual general meeting. 

Whistle-Blowing Policy 

The Board has put in place a Whistle-Blowing programme for Suntec REIT whereby staff may in confidence, raise their concerns 

about possible improprieties in matters of financial reporting or such other matters. 

The objective of the Whistle-Blowing programme is to ensure that arrangements are in place for the independent 

investigation of such concerns and for appropriate follow-up actions to be taken. There were no reports of whistle-blowing 

received in FY 2010. 

INTERNAL CONTROLS AND AUDIT 

Principle 12 

Principle 13 

The Board should ensure that the Management maintains a sound system of internal controls to safeguard the 

Unitholders’ investments and the company’s assets. 

The company should establish an internal audit function that is independent of the activities it audits. 

The Manager has put in place a system of internal controls, procedures and processes to safeguard Suntec REIT’s assets and 

Unitholders’ interests as well as to manage risk. 

The internal audit function of the Manager is out-sourced to BDO Consultants Pte Ltd, a member firm of BDO International 

Limited. The AC is satisfied that the internal auditor has met the standards set by internationally recognised professional bodies 

including the Standards for the Professional Practice of Internal Auditing set by The Institute of Internal Auditors. The internal 

auditor reports directly to the AC on audit matters. The AC also reviews and approves the annual internal audit plan as well as 

the internal audit reports and effectiveness of the actions taken by Management on the recommendations made by the internal 

auditor in this respect. 

The AC is of the view that the internal auditor has adequate resources to perform its functions and has, to the best of its ability, 

maintained its independence from the activities that it audits. 

Based on AC's review, the Board is satisfied that there are adequate internal controls including financial, operational, compliance 

controls and risk management systems in the Manager.



61 


COMMUNICATION WITH UNITHOLDERS 

Principle 14 

Principle 15 

Companies should engage in regular, effective and fair communication with shareholders. 

Companies should encourage greater Unitholder participation at AGMs and allow Unitholders the opportunity 

to communicate their views on various matters affecting the company. 

The Listing Manual requires that a listed entity discloses to the market matters that would likely have a material effect on the 

price of the entity’s securities. The Manager upholds a strong culture of continuous disclosure and transparent communication 

with Unitholders and the investing community. The Manager’s disclosure policy requires timely and full disclosure of all material 

information relating to Suntec REIT by way of public releases or announcements through the SGX-ST via SGXNET at first instance 

and subsequently, by way of release on Suntec REIT’s website at www.suntecreit.com. 

The Manager also conducts regular briefings for analysts and media representatives, which will generally coincide with the 

release of Suntec REIT’s results. During these briefings, Management will review Suntec REIT’s most recent performance as well 

as discuss the business outlook for Suntec REIT. In line with the Manager’s objective of transparent communication, briefing 

materials are released through the SGX-ST via SGXNET and also made available at Suntec REIT’s website. 

Unitholders are informed of meetings through notices accompanied by annual reports or circulars sent to them. Unitholders 

are invited at such meetings to put forth any questions they may have on the motions to be debated and decided upon. If any 

Unitholder is unable to attend, he/she is allowed to appoint up to two proxies to vote on his/her behalf at the meeting through 

proxy forms sent in advance. 

Members of the Board of Directors together with the AC and the external auditors will be in attendance at these meetings 

to address questions from Unitholders. 

DEALINGS IN SUNTEC REIT UNITS 

The Board has adopted an internal compliance code of conduct to provide guidance to its Directors, key officers and employees 

in respect of dealings in Suntec REIT's units ("Units"). 

In general, the Manager’s policy encourages Directors and employees of the Manager to hold Units, but prohibits them from 

dealing in such Units: 

1. during the period commencing one month before the public announcement of Suntec REIT’s annual, semi-annual and 

quarterly results and (where applicable) any property valuations, and ending on the date of announcement of the 

relevant results or property valuations; and 

2. at any time whilst in possession of price-sensitive information. 

Directors and employees of the Manager are discouraged from dealing in Units on short-term considerations. 

In addition, the Manager has given an undertaking to the MAS that it will announce to the SGX-ST the particulars of its 

unitholdings in Suntec REIT and any changes thereto within two business days after the change. The Manager has also 

undertaken that it will not deal in Units during the period commencing one month before the public announcement of 

Suntec REIT’s annual, semi-annual and quarterly results and (where applicable) any property valuations, and ending on the date 

of announcement of the said information. 

RISK ASSESSMENT AND MANAGEMENT OF BUSINESS RISK 

Effective risk management is a fundamental part of Suntec REIT’s business strategy. Recognising and managing risk is central 

to the business and in protecting Unitholders’ interests and value. Suntec REIT operates within overall guidelines and specific 

parameters set by the Board. Each transaction is comprehensively analysed to understand the risks involved and appropriate 

controls and measures are put in place before the Manager proceeds to execute these transactions. Key risks, process owners, 

risk factors, mitigating actions and risk indicators are continually identified, assessed and monitored by Management as part 

of Suntec REIT’s enterprise risk management framework and is documented in the risk profile maintained by the Manager and 

reviewed by the Board. 

The Board meets quarterly or as often as necessary to review the financial performance of Suntec REIT against a previously 

approved budget. The Board also reviews the risks to the assets of Suntec REIT and acts upon any comments of the auditors of 

Suntec REIT. In assessing business risks, the Board considers the economic environment and property industry risks. Management 

meets regularly to review the operations of Suntec REIT and discuss continuous disclosure issues.

62 




DEALING WITH CONFLICT OF INTEREST 

The Manager has instituted the following procedures to deal with potential conflict of interest issues which the Manager may 

encounter in managing Suntec REIT: 

1. the Manager will be a dedicated manager to Suntec REIT and will not manage any other REIT which invests in the same 

type of properties as Suntec REIT. 

2. all executive officers will be employed by the Manager. 

3. all resolutions in writing of the Directors of the Manager in relation to matters concerning Suntec REIT must be approved 

by all the Directors. 

4. at least one-third of the Board shall comprise Independent Directors. 

5. in respect of matters in which a Director of the Manager or his associates have an interest, direct or indirect, the interested 

Director will abstain from voting. In such matters, the quorum must comprise a majority of Directors of the Manager and 

must exclude such interested Directors. 

6. under the Trust Deed, (i) the Manager and its associates are prohibited from voting at or being part of a quorum for any 

meeting of Unitholders convened to approve any matter in which the Manager or any of its associates has a material 

interest and (ii) for so long as ARA Trust Management (Suntec) Limited is the Manager of Suntec REIT and Cheung Kong 

(Holdings) Limited and/or Mr. Lim Hwee Chiang, John are controlling shareholders (as defined in the Listing Manual) of 

ARA Trust Management (Suntec) Limited, Cheung Kong (Holdings) Limited and its associates, or Mr. Lim Hwee Chiang, 

John and his associates are prohibited from being part of a quorum or voting at any meeting of Unitholders convened 

to consider a matter in respect for which Cheung Kong (Holdings) Limited or its associates or, as the case may be, Mr. Lim 

Hwee Chiang, John or his associates, has a material interest. 

7. it is also provided in the Trust Deed that if the Manager is required to decide whether or not to take any action against any 

person in relation to any breach of any agreement entered into by the Trustee with a related party of the Manager, the 

Manager shall be obliged to consult with a reputable law firm (acceptable to the Trustee) which shall provide legal advice 

on the matter. If the said law firm is of the opinion that the Trustee has a prima facie case against the party allegedly in 

breach under such agreement, the Manager shall be obliged to take appropriate action in relation to such agreement. 

The Directors of the Manager have a duty to ensure that the Manager so complies. Notwithstanding the foregoing, 

the Manager shall inform the Trustee as soon as it becomes aware of any breach of any agreement entered into by the 

Trustee with a related party of the Manager, and the Trustee may take such action as it deems necessary to protect the 

rights of Unitholders and/or which is in the interests of Unitholders. Any decision by the Manager not to take action 

against a related party of the Manager shall not constitute a waiver of the Trustee’s right to take such action as it deems 

fit against such related party. 

DEALING WITH RELATED PARTY TRANSACTIONS 

Review Procedures for Related Party Transactions 

In general, the Manager has established internal control procedures to ensure that all Related Party Transactions will be 

undertaken on an arm’s length basis and under normal commercial terms and will not be prejudicial to the interests of Suntec 

REIT and Unitholders. As a general rule, the Manager must demonstrate to the AC that such transactions satisfy the foregoing 

criteria, which may entail obtaining (where practicable) quotations from independent parties not related to the Manager, or 

obtaining one or more valuations from independent professional valuers (in accordance with the Property Funds Appendix). 

In addition, the following procedures will be undertaken: 

1. transactions (either individually or as part of a series or if aggregated with other transactions involving the same 

related party during the same financial year) equal to or exceeding S$100,000 in value but below 3.0% of the value of 

Suntec REIT’s latest audited net tangible assets will be subject to review by the AC at regular intervals;



63 


2. transactions (either individually or as part of a series or if aggregated with other transactions involving the same related 

party during the same financial year) equal to or exceeding 3.0% but below 5.0% of the value of Suntec REIT’s latest 

audited net tangible assets will be subject to the review and prior approval of the AC. Such approval shall only be given if 

the transactions are on normal commercial terms and are consistent with similar types of transactions made by the Trustee 

with third parties which are unrelated to the Manager; 

the Manager will, in compliance with Rule 905 of the Listing Manual, announce any related party transaction if such 

transaction, either individually or when aggregated with other related party transactions entered into with the same 

related party during the same financial year, is 3.0% or more of Suntec REIT’s latest audited net tangible assets; and 

3. transactions (either individually or as part of a series or if aggregated with other transactions involving the same related 

party during the same financial year) equal to or exceeding 5.0% of the value of Suntec REIT’s latest audited net tangible 

assets will be reviewed and approved prior to such transactions being entered into, on the basis described in the preceding 

paragraph, by the AC which may, as it deems fit, request advice on the transaction from independent sources or advisers, 

including the obtaining of valuations from independent professional valuers. Further, under the Listing Manual and the 

Property Funds Appendix, such transactions would have to be approved by the Unitholders at a meeting of Unitholders. 

Where matters concerning Suntec REIT relate to transactions entered into or to be entered into by the Trustee with a related 

party of the Manager or Suntec REIT, the Trustee is required to consider the terms of such transactions to satisfy itself that such 

transactions are conducted on arm’s length basis and on normal commercial terms, are not prejudicial to the interest of Suntec 

REIT and the Unitholders, and are in accordance with all applicable requirements of the Property Funds Appendix and/or the 

Listing Manual relating to the transaction in question. Further, the Trustee has the ultimate discretion under the Trust Deed to 

decide whether or not to enter into a transaction involving a related party of the Manager or Suntec REIT. If the Trustee is to sign 

any contract with a related party of the Manager or Suntec REIT, the Trustee will review the contract to ensure that it complies 

with the requirements relating to interested party transactions in the Property Funds Appendix (as may be amended from time 

to time) and the provisions of the Listing Manual relating to interested person transactions (as may be amended from time to 

time) as well as such other guidelines as may from time to time be prescribed by the MAS and the SGX-ST to apply to REITs. 

For so long as Cheung Kong (Holdings) Limited and/or Mr. Lim Hwee Chiang, John are controlling shareholders (as defined in 

the Listing Manual) of the Manager and the Manager is the manager of Suntec REIT, all transactions between Suntec REIT and 

the said controlling shareholders and/or their associates shall be considered as interested person transactions and the provisions 

of the Listing Manual relating to interested person transactions as well as such other guidelines as may from time to time be 

prescribed by the SGX-ST shall apply to such transactions. 

Role of the AC for Related Party Transactions and Internal Control Procedures 

All Related Party Transactions will be subject to regular periodic reviews by the AC. The Manager’s internal control procedures 

are intended to ensure that Related Party Transactions are conducted on an arm’s length basis and under normal commercial 

terms and are not prejudicial to Unitholders. 

The Manager maintains a register to record all Related Party Transactions (and the bases, including any quotations from 

unrelated parties and independent valuations obtained to support such bases, on which they are entered into), which are 

entered into by Suntec REIT. The Manager will incorporate into its internal audit plan a review of all Related Party Transactions 

entered into by Suntec REIT. The AC shall review the internal audit reports to ascertain that the guidelines and procedures 

established to monitor Related Party Transactions have been complied with. In addition, the Trustee will also have the right 

to review such audit reports to ascertain that the Property Funds Appendix has been complied with. The AC will periodically 

review all Related Party Transactions to ensure compliance with the Manager’s internal control procedures and with the relevant 

provisions of the Listing Manual and the Property Funds Appendix. The review will include the examination of the nature of the 

transaction and its supporting documents or such other data deemed necessary by the AC. 

If a member of the AC has an interest in a transaction, he is required to abstain from participating in the review and approval 

process in relation to that transaction. 

The Manager will disclose in Suntec REIT’s annual report the aggregate value of Related Party Transactions conducted during 

the relevant financial year.

64 



Report of the Trustee 

HSBC Institutional Trust Services (Singapore) Limited (the “Trustee”) is under a duty to take into custody and hold the assets 

of Suntec Real Estate Investment Trust (the “Trust”) and its subsidiaries (the “Group”) in trust for the holders (“Unitholders”) 

of units in the Trust (the “Units”). In accordance with the Securities and Futures Act, Chapter 289, of Singapore, its subsidiary 

legislation, and the Code on Collective Investment Schemes, the Trustee shall monitor the activities of ARA Trust Management 

(Suntec) Limited (the “Manager”) for compliance with the limitations imposed on the investment and borrowing powers as set 

out in the trust deed dated 1 November 2004 (as amended) (the “Trust Deed”) between the Manager and the Trustee in each 

annual accounting period and report thereon to Unitholders in an annual report. 

To the best knowledge of the Trustee, the Manager has, in all material respects, managed the Trust during the period covered 

by these financial statements, set out on pages 67 to 110 in accordance with the limitations imposed on the investment and 

borrowing powers set out in the Trust Deed. 

For and on behalf of the Trustee, 

HSBC Institutional Trust Services (Singapore) Limited 

Anthony Wade Lewis 

Authorised Signatory 

Singapore 

4 March 2011



65 

Statement by the Manager 

In the opinion of the directors of ARA Trust Management (Suntec) Limited, the accompanying financial statements set out on 

pages 67 to 110, comprising the Balance Sheets, Statements of Total Return, Distribution Statements, Statements of Movements 

in Unitholders’ Funds, Portfolio Statements, Statement of Cash Flows and Notes to the Financial Statements are drawn up so 

as to present fairly, in all material respects, the financial position of Suntec Real Estate Investment Trust (the "Trust") and its 

subsidiaries (the "Group") as at 31 December 2010, the total return, distributable income, movements in Unitholders’ funds 

and cash flows of the Group and the total return, distributable income and movements in Unitholders’ funds of the Trust for 

the financial year then ended in accordance with the recommendations of Statement of Recommended Accounting Practice 7 

Reporting Framework for Unit Trusts issued by the Institute of Certified Public Accountants of Singapore and the provisions of 

the Trust Deed. At the date of this statement, there are reasonable grounds to believe that the Trust will be able to meet its 

financial obligations as and when they materialise. 

For and on behalf of the Manager, 


Lim Hwee Chiang, John 

Director 

Yeo See Kiat 

Director and Chief Executive Officer 

Singapore 

4 March 2011

66 



Independent Auditors' Report 

Unitholders of Suntec Real Estate Investment Trust 

(Constituted under a Trust Deed in the Republic of Singapore) 

We have audited the accompanying financial statements of Suntec Real Estate Investment Trust (the “Trust”) and its subsidiaries 

(the “Group”), which comprise the Balance Sheets and Portfolio Statements of the Group and the Trust as at 31 December 2010, 

and the Statement of Total Return, Distribution Statement, Statement of Movements in Unitholders’ Funds and Statement of 

Cash Flows of the Group and the Statement of Total Return, Distribution Statement and Statement of Movements in Unitholders' 

Funds of the Trust for the year then ended, and a summary of significant accounting policies and other explanatory information, 

as set out on pages 67 to 110. 

Manager’s responsibility for the financial statements 

The Manager of the Trust is responsible for the preparation and fair presentation of these financial statements in accordance 

with the recommendations of Statement of Recommended Accounting Practice 7 Reporting Framework for Unit Trusts issued by 

the Institute of Certified Public Accountants of Singapore, and for such internal control as the Manager of the Trust determines 

is necessary to enable the preparation of financial statements that are free from material misstatements, whether due to fraud 

or error. 

Auditors’ responsibility 

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance 

with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform 

the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. 

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. 

The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of 

the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control 

relevant to the Trust’s preparation and fair presentation of the financial statements in order to design audit procedures that are 

appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust’s internal 

control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting 

estimates made by the Manager of the Trust, as well as evaluating the overall presentation of the financial statements. 

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 

Opinion 

In our opinion, the consolidated financial statements of the Group and the Statement of Total Return, Distribution Statement 

and Statement of Movements in Unitholders' Funds of the Trust present fairly, in all material respects, the financial position of 

the Group and of the Trust as at 31 December 2010 and the total return, distributable income, movements in Unitholders’ funds 

and cash flows of the Group, and the total return, distributable income and movements in Unitholders' funds of the Trust for 

the year then ended in accordance with the recommendations of Statement of Recommended Accounting Practice 7 Reporting 

Framework for Unit Trusts issued by the Institute of Certified Public Accountants of Singapore. 

KPMG LLP 

Public Accountants and 

Certified Public Accountants 

Singapore 

4 March 2011



67 

Balance Sheets 


GroUP 

trust 

Note 2010 2009 2010 2009 

$’000 $’000 $’000 $’000 

Non-current assets 

Plant and equipment 4 10 45 10 45 

Investment properties 5 4,452,000 4,202,000 4,452,000 4,202,000 

Intangible asset 6 100,029 36,124 100,029 36,124 

Interest in jointly controlled entities 7 2,039,680 880,953 1,474,791 344,946 

Investments in subsidiaries 8 – – 535,506 511,329 

Financial derivatives 9 416 1,762 416 1,762 

6,592,135 5,120,884 6,562,752 5,096,206 

Current assets 

Financial derivatives 9 762 – 762 – 

Trade and other receivables 10 6,685 17,794 6,587 34,469 

Cash and cash equivalents 11 52,493 31,228 51,909 31,228 

59,940 49,022 59,258 65,697 

Total assets 6,652,075 5,169,906 6,622,010 5,161,903 

Current liabilities 

Interest-bearing borrowings 12 404,585 – 404,585 – 

Trade and other payables 13 41,103 35,381 41,103 35,381 

Financial derivatives 9 8,756 1,581 8,756 1,581 

Current portion of security deposits 22,452 23,374 22,452 23,374 

Provision for taxation 2,032 6,210 2,032 6,210 

478,928 66,546 478,928 66,546 

Non-current liabilities 

Interest-bearing borrowings 12 2,150,059 1,721,722 2,150,059 1,721,722 

Non-current portion of security deposits 38,239 38,239 38,239 38,239 

Financial derivatives 9 216 15,542 216 15,542 

2,188,514 1,775,503 2,188,514 1,775,503 

Total liabilities 2,667,442 1,842,049 2,667,442 1,842,049 

Net assets 3,984,633 3,327,857 3,954,568 3,319,854 

Represented by: 

Unitholders’ funds 3,984,633 3,327,857 3,954,568 3,319,854 

Units in issue (’000) 16 2,205,128 1,797,300 2,205,128 1,797,300 

Net asset value per Unit (S$) 17 1.804 1.779 1.790 1.775 

The accompanying notes form an integral part of these financial statements.

68 



Statements of Total Return 

YEAR ENDED 31 December 2010 

GroUP 

trust 

Note 2010 2009 2010 2009 

$’000 $’000 $’000 $’000 

Gross revenue 18 249,479 253,138 260,911 264,327 

Property expenses 19 (56,389) (60,903) (56,389) (60,903) 

Net property income 193,090 192,235 204,522 203,424 

Other income 20 22,410 26,170 22,410 26,170 

Finance income 21 25,263 16,707 22,702 16,383 

Finance expense 21 (81,165) (72,739) (81,165) (72,739) 

Net finance costs (55,902) (56,032) (58,463) (56,356) 

Amortisation of intangible asset 6 (20,895) (24,759) (20,895) (24,759) 

Asset management fees 22 (27,932) (27,328) (27,932) (27,328) 

Professional fees (539) (617) (539) (617) 

Trustee’s fees (868) (878) (868) (878) 

Audit fees (252) (252) (252) (252) 

Other charges 23 (1,020) (572) (1,016) (572) 

Net income before share of profit 

of jointly controlled entities 108,092 107,967 116,967 118,832 

Share of profit/(loss) of jointly 

controlled entities 7 30,937 (73,322) – – 

Net income 139,029 34,645 116,967 118,832 

Net change in fair value of investment properties 248,715 (150,847) 248,715 (150,847) 

Total return for the year before tax 387,744 (116,202) 365,682 (32,015) 

Income tax expense 24 (2,029) (2,723) (2,029) (2,723) 

Total return for the year after tax 385,715 (118,925) 363,653 (34,738) 

Earnings per Unit (cents) 25 

Basic 20.337 (6.867) 19.174 (2.006) 

Diluted 19.152 (6.867) 18.078 (2.006) 




69 

Distribution Statements 

year ended 31 December 2010 

GroUP 

trust 

2010 2009 2010 2009 

$’000 $’000 $’000 $’000 

Amount available for distribution to Unitholders 

at the beginning of the year 47,689 44,229 47,689 44,229 

Net income before share of profit of jointly 

controlled entities 108,092 107,967 116,967 118,832 

Net tax adjustments (Note A) 64,982 73,191 67,539 73,515 

Taxable income 220,763 225,387 232,195 236,576 

Add: Tax exempt dividend income (Note B) 11,432 11,189 – – 

Less: Income tax (Note C) (2,029) (2,723) (2,029) (2,723) 

Amount available for distribution to Unitholders 230,166 233,853 230,166 233,853 

Distributions to Unitholders: 

Distribution of 2.164 cents per Unit for period 

from 1/10/2008 to 8/12/2008 – (33,418) – (33,418) 


from 9/12/2008 to 31/12/2008 – (10,957) – (10,957) 


from 1/1/2009 to 31/3/2009 – (46,341) – (46,341) 


from 1/4/2009 to 8/6/2009 – (35,999) – (35,999) 


from 9/6/2009 to 30/6/2009 – (11,711) – (11,711) 


from 1/7/2009 to 30/9/2009 – (47,738) – (47,738) 


from 1/10/2009 to 21/12/2009 (41,969) – (41,969) – 


from 9/12/2009 to 21/12/2009 (139) – (139) – 


from 22/12/2009 to 31/12/2009 (5,728) – (5,728) – 


from 1/1/2010 to 31/3/2010 (45,366) – (45,366) – 


from 1/4/2009 to 8/6/2010 (34,881) – (34,881) – 





(185,367) (186,164) (185,367) (186,164) 

Income available for distribution to 

Unitholders at end of the year 44,799 47,689 44,799 47,689 


70 



Distribution Statements 

Year ended 31 December 2010 

GroUP 

trust 


$’000 $’000 $’000 $’000 

Note A 

Net tax adjustments comprise: 

Non-tax deductible items: 

- Amortisation of intangible asset 20,895 24,759 20,895 24,759 

- Amortisation of transaction costs 29,580 14,057 29,580 14,057 

- Asset management fees paid/payable in Units 22,345 21,863 22,345 21,863 

- Interest income (2,561) (1,997) – (1,997) 

- Net (gain)/loss arising from remeasurement of derivatives (7,566) 12,121 (7,566) 12,121 

- Professional fees 254 192 254 192 

- Trustee’s fees 868 878 868 878 

- Other items 1,167 1,318 1,163 1,642 

Net tax adjustments 64,982 73,191 67,539 73,515 

Note B 

This relates to the dividend income received from One Raffles Quay Pte Ltd and Suntec Harmony Pte. Ltd.. 

Note C 

This relates to income tax on the income support received by the Group and the Trust under the Deeds of Income Support 

entered into with Cavell Limited and Choicewide Group Limited, the vendors of the one-third interest in One Raffles Quay 

Pte Ltd and BFC Development Pte. Ltd. respectively. 




71 

Statements of Movements in Unitholders’ Funds 

year ended 31 December 2010 

GroUP 

trust 


$’000 $’000 $’000 $’000 

Balance at the beginning of the year 3,327,857 3,455,998 3,319,854 3,363,808 

Operations 


Net increase/(decrease) in net assets 

resulting from operations 385,715 (118,925) 363,653 (34,738) 

Net movement in hedging reserve – 5,344 – 5,344 

Unitholders’ transactions 

Creation of Units: 

- asset management fees paid in Units 16,017 16,533 16,017 16,533 

- acquisition fee paid in Units 14,958 470 14,958 470 

- private placement of Units 428,810 152,915 428,810 152,915 

Units to be issued: 

- asset management fees payable in Units 6,328 5,330 6,328 5,330 

Unit issue expenses (9,685) (3,644) (9,685) (3,644) 

Distributions to Unitholders (185,367) (186,164) (185,367) (186,164) 

Net increase/(decrease) in net assets resulting 

from Unitholders’ transactions 271,061 (14,560) 271,061 (14,560) 

Net assets at end of the year 3,984,633 3,327,857 3,954,568 3,319,854 


72 



Portfolio Statements 


Group 

R E reMAINING Percentage 

DESCRIPTION TENURE OF TERM OF TERM of eXISTING Committed CARRYING of Total Net 

OF PROPERTY lAND LEASE LEAse loCATION USE Occupancy RATE vALUE Assets 

2010 2009 2010 2009 2010 2009 

% % $’000 $’000 % % 

Investment properties in Singapore 

Suntec City Mall Leasehold 99 years 78 years 3 Temasek Commercial 97.9 97.6 1,525,000 1,501,000 38.3 45.1 

Boulevard 

Suntec City Leasehold 99 years 78 years 5 - 9 Temasek Commercial 99.1 95.3 2,455,000 2,249,000 61.6 67.6 

Office Towers Boulevard 

Park Mall Leasehold 99 years 58 years 9 Penang Road Commercial 100.0 100.0 338,000 321,000 8.5 9.6 

CHIJMES Leasehold 99 years 80 years 30 Victoria Street Commercial 99.5 100.0 134,000 131,000 3.3 3.9 

Investment properties, at valuation 4,452,000 4,202,000 111.7 126.2 

Interest in jointly controlled entities (Note 7) 2,039,680 880,953 51.2 26.5 

6,491,680 5,082,953 162.9 152.7 

Other assets and liabilities (net) (2,507,047) (1,755,096) (62.9) (52.7) 

Net assets 3,984,633 3,327,857 100.0 100.0 




73 



Trust 

R E reMAINING Percentage 

DESCRIPTION TENURE OF TERM OF TERM of eXISTING Committed CARRYING of Total Net 

OF PROPERTY lAND LEASE LEAse loCATION USE Occupancy RATE vALUE Assets 

2010 2009 2010 2009 2010 2009 

% % $’000 $’000 % % 

Investment properties in Singapore 

Suntec City Mall Leasehold 99 years 78 years 3 Temasek Commercial 97.9 97.6 1,525,000 1,501,000 38.6 45.2 

Boulevard 

Suntec City Leasehold 99 years 78 years 5 - 9 Temasek Commercial 99.1 95.3 2,455,000 2,249,000 62.1 67.7 

Office Towers Boulevard 

Park Mall Leasehold 99 years 58 years 9 Penang Road Commercial 100.0 100.0 338,000 321,000 8.6 9.7 

CHIJMES Leasehold 99 years 80 years 30 Victoria Street Commercial 99.5 100.0 134,000 131,000 3.3 3.9 

Investment properties, at valuation 4,452,000 4,202,000 112.6 126.5 

Interest in jointly controlled entities (Note 7) 1,474,791 344,946 37.3 10.4 

Investments in subsidiaries (Note 8) 535,506 511,329 13.5 15.4 

6,462,297 5,058,275 163.4 152.3 

Other assets and liabilities (net) (2,507,729) (1,738,421) (63.4) (52.3) 

Net assets 3,954,568 3,319,854 100.0 100.0 

Note: 

Suntec City Office Towers comprise 15 strata lots in Suntec City Office Tower One, 7 strata lots in Suntec City Office Tower Two, 76 strata lots in Suntec City Office Tower Three and 

all the strata lots in Suntec City Office Towers Four and Five. 

Park Mall comprises a 15-storey with basement shopping cum office building. 

CHIJMES comprises four retail blocks, two basement levels and a chapel. 


74 





The carrying amounts of the investment properties as at 31 December 2010 and 31 December 2009 were based on independent 

valuations undertaken by Knight Frank Pte Ltd (“Knight Frank”) and CB Richard Ellis (“CBRE”). The independent valuers have 

appropriate professional qualifications and recent experience in the location and category of the properties being valued. 

vAluation 

DESCRIPTION vAluer vAluation method 2010 2009 

OF PROPERTY $’000 $’000 

Suntec City Mall Knight Frank Investment method and discounted 1,525,000 1,501,000 

(2009: Knight Frank) cash flow analysis 

Suntec City Knight Frank Investment method and discounted 2,455,000 2,249,000 

Office Towers (2009: Knight Frank) cash flow analysis 

Park Mall CBRE Capitalisation of income approach and 338,000 321,000 

(2009: CBRE) discounted cash flow analysis 

CHIJMES Knight Frank Investment method and discounted 134,000 131,000 

(2009: Knight Frank) cash flow analysis 

Investment properties comprise commercial properties that are leased to external customers. Generally, the leases contain an 

initial non-cancellable period of three years. Subsequent renewals are negotiated with the lessee. Contingent rents recognised 

upon receipt in the Statements of Total Return of both the Group and the Trust amounted to $1,033,000 (2009: $690,000). 




75 

Consolidated Statement of Cash Flows 

YEAR ENDED 31 December 2010 

GROUP 

2010 2009 

$’000 $’000 

Cash flows from operating activities 

Net income 139,029 34,645 

Adjustments for: 

Allowance for doubtful receivables 430 2,186 

Amortisation of intangible asset 20,895 24,759 

Asset management fees paid/payable in Units 22,345 21,863 

Depreciation of plant and equipment 38 53 

Loss on disposal of plant and equipment 4 – 

Net finance costs 55,902 56,032 

Share of (profit)/loss of jointly controlled entities (30,937) 73,322 

Operating income before working capital changes 207,706 212,860 

Changes in working capital: 

Trade and other receivables 466 (865) 

Trade and other payables 4,401 1,382 

Cash flows from operating activities 212,573 213,377 

Income tax paid (6,207) – 

Net cash flows from operating activities 206,366 213,377 

Cash flows from investing activities 

Acquisition of interest in a jointly controlled entity (1,414,713) – 

Adjustment to investment in a jointly controlled entity 790 133 

Amount due from jointly controlled entities – (21,325) 

Capital expenditure on investment properties (1,285) (847) 

Dividend income received 11,610 10,450 

Interest received 15,656 14,930 

Purchase of intangible asset (84,800) – 

Purchase of plant and equipment (7) (6) 

Repayment of loan from a jointly controlled entity 300,000 – 

Cash flows used in investing activities (1,172,749) 3,335 

Cash flows from financing activities 

Distributions to Unitholders (185,367) (186,164) 

Interest paid (76,110) (77,818) 

Proceeds from interest-bearing loans 1,805,000 914,000 

Proceeds from issue of units, net of expenses 419,125 149,442 

Repayment of interest-bearing loans (975,000) (1,039,000) 

Cash flows from financing activities 987,648 (239,540) 

Net increase/(decrease) in cash and cash equivalents 21,265 (22,828) 

Cash and cash equivalents at beginning of the year 31,228 54,056 

Cash and cash equivalents at end of the year 52,493 31,228 

Significant Non-Cash Transactions 

There were the following significant non-cash transactions during the year: 

(a) 

15,725,881 (2009: 24,680,603) Units were issued or will be issued to the Manager by the Group, amounting to approximately 

$22,345,000 (2009: $21,863,000) at unit prices ranging from $1.330 to $1.504 (2009: $0.586 to $1.307) as satisfaction of 

asset management fees payable in Units in respect of the year ended 31 December 2010. 

(b) 10,266,300 (2009: 431,074) Units were issued to the Manager, amounting to approximately $14,958,000 (2009: $470,000) 

at $1.457 per Unit (2009: $1.090 per Unit) as satisfaction of the acquisition fee paid on the acquisition of the one-third 

interest in BFC Development Pte. Ltd. (2009: 20% interest in Harmony Investors Group Limited). 


76 



Notes to the Financial Statements 

These notes form an integral part of the financial statements. 

The financial statements were authorised for issue by the Manager and the Trustee on 4 March 2011. 

1 General 

Suntec Real Estate Investment Trust (the “Trust”) is a Singapore-domiciled unit trust constituted pursuant to the trust deed 

dated 1 November 2004 (as amended) (the “Trust Deed”) entered into between ARA Trust Management (Suntec) Limited 

(the “Manager”) and HSBC Institutional Trust Services (Singapore) Limited (the “Trustee”). The Trust Deed is governed by 

the laws of the Republic of Singapore. The Trustee is under a duty to take into custody and hold the assets of the Trust in 

trust for the holders (“Unitholders”) of units in the Trust (the “Units”). 

the Trust was formally admitted to the Official List of the Singapore Exchange Securities Trading Limited (the “SGX-ST”) 

on 9 December 2004 and was included in the Central Provident Fund (“CPF”) Investment Scheme on 9 December 2004. 

the principal activity of the Trust and its subsidiaries (the “Group”) is to invest in income producing real estate and real 

estate related assets, which are used or substantially used for commercial purposes, with the primary objective of achieving 

an attractive level of return from rental income and for long-term capital growth. 

the consolidated financial statements relate to the Trust and its subsidiaries and the Group’s interest in jointly 

controlled entities. 

the Trust has entered into several service agreements in relation to management of the Trust and its property operations. 

The fee structures of these services are as follows: 

(i) 

Property management fees 

APM Property Management Pte Ltd (“APM”), the property manager of Suntec City Mall and Suntec City Office Towers, 

is entitled to receive 3.0% per annum of gross revenue for provision of lease management services, marketing and 

marketing co-ordination services and property management services. In addition, where the aggregate of all (1) 

licence fees; (2) media sales; and (3) other advertising and promotion income derived from the property for each 

financial year exceeds $5,520,000, APM is entitled to receive a commission of 10.0% of the said licence fees, media 

sales and other advertising and promotion income which exceeds $5,520,000 for each financial year. 

APAC Investment Management Pte Ltd, the property manager of Park Mall and CHIJMES is entitled to receive 3.0% 

per annum of gross revenue for provision of lease management, property management, marketing and marketing 

co-ordination services. 

The property management fees are payable monthly in arrears. 

(ii) 

Asset management fees 

Pursuant to the Trust Deed, asset management fees comprise the following: 

(a) 

(b) 

a base fee not exceeding 0.3% per annum of the value of the Deposited Property (being all the assets of 

the Trust (including all its Authorised Investments) as defined in the Trust Deed) of the Trust or such higher 

percentage as may be approved by an Extraordinary Resolution of a meeting of Unitholders; and 

an annual performance fee equal to a rate of 4.5% per annum of the Net Property Income (as defined in the 

Trust Deed) of the Trust and any Special Purpose Vehicles (as defined in the Trust Deed) for each financial 

year, or such lower percentage as may be determined by the Manager in its absolute discretion or such higher 

percentage as may be approved by an Extraordinary Resolution at a meeting of Unitholders.



77 


1 General (continued) 

(ii) 

Asset management fees (continued) 

Based on the current agreement between the Manager and the Trustee, the base fee is agreed to be 0.3% per annum 

of the value of the Deposited Property. 

For a period of seven years commencing from the listing of the Units on the SGX-ST, 80.0% of the asset management 

fees payable to the Manager will be paid in the form of Units issued at the volume weighted average traded price 

for a unit for all trades on the SGX-ST on the ordinary course of trading on the SGX-ST for the last ten Business 

Days (as defined in the Trust Deed) of the relevant period in which the management fees accrue, and 20.0% of the 

management fees will be paid in the form of cash. Thereafter, the asset management fees shall be in the form of 

Units and/or cash as the Manager may elect. The portion of the asset management fees payable in the form of Units 

will be made on a quarterly basis, in arrears. The portion of the asset management fees payable in cash will be made 

on a monthly basis, in arrears. If Unitholders’ prior approval for the payment of the asset management fees in the 

form of Units is required but not obtained, then the payment to the Manager for the asset management fees shall 

be made in the form of cash. 

The Manager is also entitled to receive an acquisition fee at the rate of 1.0% of the acquisition price and a divestment 

fee of 0.5% of the sale price on all future acquisition or disposal of properties. 

(iii) 

Trustee’s fee 

Pursuant to the Trust Deed, the Trustee’s fee shall not exceed 0.25% per annum of the value of the Deposited 

Property (subject to a minimum sum of $9,000 per month) or such higher percentage as may be approved by an 

Extraordinary Resolution of a meeting of Unitholders. 

Based on the current agreement between the Manager and Trustee, the Trustee’s fee is agreed to be: 

(a) 

(b) 

(c) 

0.03% per annum on the first $250 million of the Deposited Property; 

0.02% per annum on the next $250 million of the Deposited Property; and 

0.015% per annum on the balance thereafter. 

The Trustee's fee is payable out of the Deposited Property of the Trust on a monthly basis, in arrears. The Trustee is 

also entitled to reimbursement of all reasonable out-of-pocket expenses incurred in the performance of its duties 

under the Trust Deed. 

2 Basis of preparation 

2.1 Statement of compliance 

The financial statements have been prepared in accordance with the Statement of Recommended Accounting 

Practice (“RAP”) 7 Reporting Framework for Unit Trusts issued by the Institute of Certified Public Accountants of 

Singapore, and the applicable requirements of the Code on Collective Investment Schemes (the “CIS Code”) issued by 

the Monetary Authority of Singapore (“MAS”) and the provisions of the Trust Deed. RAP 7 requires the accounting 

policies to generally comply with the recognition and measurement principles of Singapore Financial Reporting 

Standards (“FRS”). 

2.2 Basis of measurement 

These financial statements are prepared on the historical cost basis except as otherwise described below. 

2.3 Functional and presentation currency 

The financial statements are presented in Singapore dollars which is the Trust’s functional currency. All financial 

information presented in Singapore dollars has been rounded to the nearest thousand, unless otherwise stated.

78 




2 Basis of preparation (CONTINUED) 

2.4 Use of estimates and judgements 

The preparation of financial statements in conformity with RAP 7 requires the Manager to make judgements, 

estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income 

and expenses. Actual results may differ from these estimates. 

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are 

recognised in the period in which the estimates are revised, and in any future periods affected. 

Information about critical judgements in applying accounting policies that have the most significant effect on the 

amounts recognised in the financial statements and information about assumptions and estimation uncertainties 

that have a significant risk of resulting in a material adjustment within the next financial year are included in the 

following notes: 

• Note 5 – Valuation of investment properties 

• Note 15 – Valuation of financial instruments 

3 Significant accounting policies 

The accounting policies set out below have been applied consistently to all periods presented in these financial statements 

and have been applied consistently by Group entities. 

3.1 Basis of consolidation 

Subsidiaries 

Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the 

consolidated financial statements from the date that control commences until the date that control ceases. Where 

the accounting policies of the subsidiaries are different from those adopted by the Group, adjustments have been 

made to the financial statements of the subsidiaries in order for accounting policies to be consistently applied in the 

consolidated financial statements. 

Jointly controlled entities 

Jointly controlled entities are entities whose activities the Group has joint control, established by contractual 

agreement and unanimous consent is required for their strategic financial and operating decisions. 

Investments in jointly controlled entities are accounted for using the equity method and are initially recognised at 

cost. The cost of the investments includes transaction costs. 

The consolidated financial statements include the Group’s share of the profit or loss and other comprehensive 

income of the jointly controlled entities after adjustments to align the accounting policies with those of the Group, 

from the date that joint control commences until the date that joint control ceases. 

When the Group’s share of losses exceeds its interest in the jointly controlled entities, the carrying amount of 

that interest, including any long-term investments, is reduced to zero and the recognition of further losses is 

discontinued except to the extent that the Group has an obligation or has made payments on behalf of the jointly 

controlled entities. 

Transactions eliminated on consolidation 

Intra-group balances and transactions and any unrealised income or expenses arising from intra-group transactions 

are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with 

the jointly controlled entities are eliminated against the investment to the extent of the Group’s interest in the 

jointly controlled entities. Unrealised losses are eliminated in the same way as unrealised gains, but only to the 

extent that there is no evidence of impairment.



79 


3 Significant accounting policies (CONTINUED) 

3.1 Basis of consolidation (continued) 

Accounting for subsidiaries and jointly controlled entities 

Investments in subsidiaries and jointly controlled entities are stated in the Trust’s balance sheet at cost less 

accumulated impairment losses. 

3.2 Plant and equipment 

Plant and equipment are stated at cost less accumulated depreciation and impairment losses. 

Depreciation is provided on a straight-line basis so as to write off items of plant and equipment over their estimated 

useful lives as follows: 

Equipment - 3 years 

Gains or losses arising from the retirement or disposal of plant and equipment are determined as the difference 

between the estimated net disposal proceeds and the carrying amount of the asset, and are recognised in the 

Statement of Total Return. 

Depreciation methods, useful lives and residual values are reviewed and adjusted as appropriate, at each 

reporting date. 

3.3 Investment properties 

Investment properties are properties held either to earn rental income or capital appreciation or for both. Investment 

properties are measured at cost on initial recognition and subsequently at fair value. Fair value is determined in 

accordance with the Trust Deed, which requires the investment properties to be valued by independent registered 

valuers in the following events: 

• in such manner and frequency required under the Property Funds Appendix of the CIS Code issued by the 

MAS; and 

• where the Manager proposes to issue new Units for subscription or to redeem existing Units unless the 

investment properties have been valued not more than 6 months ago. 

Fair value changes are recognised in the Statement of Total Return. 

When an investment property is disposed of, the resulting gain or loss is recognised in the Statement of Total Return 

as the difference between net disposal proceeds and the carrying amount of the property. 

For taxation purposes, the Group and the Trust may claim capital allowances on assets that qualify as plant and 

machinery under the Income Tax Act. 

3.4 Intangible asset 

Intangible asset acquired by the Group and the Trust is measured initially at cost. Following initial recognition, 

the intangible asset is measured at cost less any accumulated amortisation and impairment losses. 

The intangible asset is amortised in the Statement of Total Return on a systematic basis over its estimated useful life. 

Intangible asset is tested for impairment as described in Note 3.6.

80 





3.5 Financial instruments 

Non-derivative financial assets 

The Group initially recognises loans and receivables and deposits on the date that they are originated. All other 

financial assets (including assets designated at fair value through the Statement of Total Return) are recognised 

initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument. 

The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it 

transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially 

all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial 

assets that is created or retained by the Group is recognised as a separate asset or liability. 

Financial assets and liabilities are offset and the net amount presented in the balance sheet when, and only when, 

the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset 

and settle the liability simultaneously. 

The Group has the following non-derivative financial assets: loans and receivables. 

Loans and receivables 

Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active 

market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent 

to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, 

less any impairment losses. 

Loans and receivables comprise trade and other receivables and cash and cash equivalents. 

Cash and cash equivalents comprise cash balances and bank deposits. 

Non-derivative financial liabilities 

The Group initially recognises all other financial liabilities (including liabilities designated at fair value through the 

Statement of Total Return) on the trade date at which the Group becomes a party to the contractual provisions of 

the instrument. 

The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expired. 

The Group has the following non-derivative financial liabilities: borrowings and trade and other payables. 

Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs. 

Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective 

interest method.



81 



3.5 Financial instruments (continued) 

Derivative financial instruments and hedging activities 

The Group holds derivative financial instruments to hedge its interest rate risk exposure. Embedded derivatives are 

separated from the host contract and accounted for separately if the economic characteristics and risks of the host 

contract and the embedded derivative are not closely related, a separate instrument with the same terms as the 

embedded derivative would meet the definition of a derivative, and the combined instrument is not measured at 

fair value through the Statement of Total Return. Multiple embedded derivatives in a single instrument are treated 

as a single compound embedded derivative if they share the same underlying risk exposures, are interdependent of 

each other and are not readily separable. 

On initial designation of the hedge, the Group formally documents the relationship between the hedging 

instrument(s) and hedged item(s), including the risk management objectives and strategy in undertaking the hedge 

transaction, together with the methods that will be used to assess the effectiveness of the hedging relationship. 

The Group makes an assessment, both at the inception of the hedge relationship as well as on an ongoing basis, 

whether the hedging instruments are expected to be “highly effective” in offsetting the changes in the fair value 

or cash flows of the respective hedged items during the period for which the hedge is designated, and whether the 

actual results of each hedge are within a range of 80%-125%. For a cash flow hedge of a forecast transaction, the 

transaction should be highly probable to occur and should present an exposure to variations in cash flows that could 

ultimately affect reported total return. 

Derivatives are recognised initially at fair value; attributable transaction costs are recognised in the Statement of 

Total Return when incurred. Subsequent to initial recognition, derivatives are measured at fair value, and changes 

therein are accounted for as described below. 

Cash flow hedges 

Changes in the fair value of the derivative hedging instrument designated as a cash flow hedge are recognised 

directly in Unitholders’ funds to the extent that the hedge is effective. To the extent that the hedge is ineffective, 

changes in fair value are recognised in the Statement of Total Return. 

If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or 

exercised, hedge accounting is discontinued prospectively. The cumulative gain or loss previously recognised 

in the hedging reserve in Unitholders’ funds remains there until the forecast transaction occurs. If the forecast 

transaction is no longer expected to occur, any related cumulative gain or loss is recognised in the Statement of 

Total Return. When the hedged item is a non-financial asset, the amount recognised in Unitholders’ funds is 

transferred to the carrying amount of the asset when it is recognised. In other cases the amount recognised in 

Unitholders’ funds is transferred to the Statement of Total Return in the same period that the hedged item affects 

the Statement of Total Return. 

Separable embedded derivatives 

Changes in the fair value of separable embedded derivatives are recognised immediately in the Statement of 

Total Return. 

Other non-trading derivatives 

When a derivative financial instrument is not held for trading, and is not designated in a qualifying hedge 

relationship, all changes in its fair value are recognised immediately in the Statement of Total Return. 

Convertible bonds 

The convertible bonds comprise a liability for the interest and principal amount and a derivative liability. The derivative 

liability is recognised at fair value at inception. The carrying amount of the convertible bonds at initial recognition 

is the difference between the gross proceeds from the convertible bonds issue and the fair value of the derivative 

liability. Any directly attributable transaction costs are allocated to the convertible bonds and derivative liability in 

proportion to their initial carrying amounts. 

Subsequent to initial recognition, the convertible bonds are measured at amortised cost using the effective interest 

method. The derivative liability is measured at fair value through the Statement of Total Return.

82 





3.6 Impairment 

Non-derivative financial assets 

A financial asset not carried at fair value through total return is assessed at the end of each reporting date to determine 

whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that 

a loss event has occurred after the initial recognition of the asset, and that the loss event has a negative effect on the 

estimated future cash flows of that asset that can be estimated reliably. 

Objective evidence that financial assets are impaired can include default or delinquency by a debtor, restructuring of an 

amount due to the Group on terms that the Group would not consider otherwise, indications that a debtor or issuer will 

enter bankruptcy or economic conditions that correlate with defaults. 

Loans and receivables 

The Group considers evidence of impairment for loans and receivables at both a specific asset and collective level. All 

individually significant loans and receivables are assessed for specific impairment. All individually significant receivables 

found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet 

identified. Loans and receivables that are not individually significant are collectively assessed for impairment by grouping 

together loans and receivables with similar risk characteristics. 

In assessing collective impairment, the Company uses historical trends of the probability of default, the timing of recoveries 

and the amount of loss incurred, adjusted for Manager’s judgement as to whether current economic and credit conditions 

are such that the actual losses are likely to be greater or less than suggested by historical trends. 

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its 

carrying amount and the present value of the estimated future cash flows, discounted at the asset’s original effective 

interest rate. Losses are recognised in Statement of Total Return and reflected in an allowance account against loans and 

receivables. Interest on the impaired asset continues to be recognised. When a subsequent event causes the amount of 

impairment loss to decrease, the decrease in impairment loss is reversed through the Statement of Total Return. 

Non-financial assets 

The carrying amounts of the Group’s non-financial assets, other than investment properties, are reviewed at each 

reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s 

recoverable amount is estimated. 

The recoverable amount of an asset or cash-generating unit (CGU) is the greater of its value in use and its fair value 

less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a 

pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the 

asset or CGU. 

An impairment loss is recognised in the Statement of Total Return if the carrying amount of an asset or its CGU exceeds its 

estimated recoverable amount. A CGU is the smallest identifiable asset group that generates cash flows that are largely 

independent from other assets and groups. Impairment losses are recognised in the Statement of Total Return, unless it 

reverses a previous revaluation credited to Unitholders’ funds, in which case it is charged to Unitholders’ funds. 

Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has 

decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine 

the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not 

exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss 

had been recognised.



83 



3.7 Issue expenses 

Issue expenses relate to expenses incurred in connection with the issue of Units. Such expenses are deducted directly 

against Unitholders’ funds. 

3.8 Revenue recognition 

Rental income from operating leases 

Rental income receivable under operating leases is recognised in the Statement of Total Return on a straight-line 

basis over the term of the lease, except where an alternative basis is more representative of the pattern of benefits 

to be derived from the leased assets. Lease incentives granted are recognised as an integral part of the total rental 

to be received. Contingent rentals, which include gross turnover rental, are recognised as income in the accounting 

period on a receipt basis. No contingent rentals are recognised if there are uncertainties due to the possible return 

of amounts received. 

Dividend income 

Dividend income is recognised on the date that the right to receive payment is established. 

3.9 Expenses 

Property expenses 

Property expenses consist of advertising and promotion expenses, property tax, property management fees 

(using the applicable formula stipulated in Note 1(i)), maintenance charges and other property outgoings in 

relation to investment properties where such expenses are the responsibility of the Group. 

Property expenses are recognised on an accrual basis. 

Asset management fees 

Asset management fees are recognised on an accrual basis using the applicable formula stipulated in Note 1(ii). 

Trustee’s fee 

Trustee’s fee is recognised on an accrual basis using the applicable formula stipulated in Note 1(iii). 

3.10 Finance income and expense 

Finance income comprises interest income on funds invested, gains on remeasurement of derivatives and gains on 

hedging instruments that are recognised in the Statement of Total Return. Interest income is recognised as it accrues, 

using the effective interest method. 

Finance expenses comprise interest expense on borrowings, amortisation of transaction costs incurred on 

borrowings, losses on remeasurement of derivatives and losses on hedging instruments that are recognised in the 

Statement of Total Return. All borrowing costs are recognised in the Statement of Total Return using the effective 

interest method.

84 





3.11 Income tax 

Income tax expense comprises current and deferred tax. Income tax is recognised in the Statement of Total Return 

except to the extent that it relates to items directly related to Unitholders’ funds, in which case it is recognised in 

Unitholders’ funds. 

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively 

enacted at the reporting date and any adjustment to tax payable in respect of previous years. 

Deferred tax is recognised using the balance sheet method, providing for temporary differences between the 

carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. 

Deferred tax is not recognised for the following temporary differences: the initial recognition of assets or liabilities 

in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and for 

differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable that 

they will not reverse in the foreseeable future. 

Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they 

reverse, based on the laws that have been enacted or substantively enacted by the reporting date. 

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and 

assets, and they relate to income taxes levied by the same tax authority (i) on the same taxable entity; or (ii) on 

different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and 

liabilities will be realised simultaneously. 

A deferred tax asset is recognised to the extent that it is probable that future taxable profits, against which the 

temporary differences can be utilised, will be available. Deferred tax assets are reviewed at each reporting date and 

are reduced to the extent that it is no longer probable that the related tax benefit will be realised. 

The Inland Revenue Authority of Singapore (“IRAS”) has issued a tax ruling on the taxation of the Trust for income 

earned and expenditure incurred after its listing on the SGX-ST. Subject to meeting the terms and conditions of the 

tax ruling which includes a distribution of at least 90% of the taxable income of the Trust, the Trustee will not be 

taxed on the portion of taxable income of the Trust that is distributed to Unitholders. Any portion of the taxable 

income that is not distributed to Unitholders will be taxed on the Trustee. In the event that there are subsequent 

adjustments to the taxable income when the actual taxable income of the Trust is finally agreed with the IRAS, such 

adjustments are taken up as an adjustment to the taxable income for the next distribution following the agreement 

with the IRAS. 

Although the Trust is not taxed on its taxable income distributed, the Trustee and the Manager are required to 

deduct income tax from distributions of such taxable income of the Trust (i.e. which has not been taxed in the hands 

of the Trustee) to certain Unitholders. However, the Trustee and the Manager will not deduct tax from distributions 

made out of the Trust’s taxable income to the extent that the beneficial Unitholder is: 

• An individual (excluding a partnership in Singapore); 

• A tax resident Singapore-incorporated company; 

• A body of persons registered or constituted in Singapore (e.g. a town council, a statutory board, a registered 

charity, a registered cooperative society, a registered trade union, a management corporation, a club or a trade 

and industry association); 

• A Singapore branch of a foreign company which has been presented a letter of approval from the Comptroller 

of Income Tax granting waiver from tax deducted at source in respect of distributions from the Trust; or 

• An agent bank acting as a nominee for individuals who have purchased Units within the Central Provident 

Fund Investment Scheme (“CPFIS”) and the distributions received from the Trust are returned to CPFIS. 

The above tax transparency ruling does not apply to gains from sale of real properties. Such gains which are 

considered as trading gains are assessable for tax on the Trustee. Where the gains are capital gains, the Trustee will 

not be assessed for tax and may distribute the capital gains without tax being deducted at source.



85 



3.12 Segment reporting 

An operating segment is a component of the Group that engages in business activities from which it may earn 

revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s 

other components. All operating segments’ operating results are reviewed regularly by the Group’s CEO, who is the 

Group’s chief operating decision maker, to make decisions about resources to be allocated to the segment and assess 

the segment’s performance, and for which discrete financial information is available. 

3.13 New standards and interpretations not yet adopted 

A number of new standards, amendments to standards and interpretations are effective for annual periods 

beginning after 1 January 2010, and have not been applied in preparing these financial statements. None of these 

are expected to have a significant effect on the financial statements of the Group. 

4 Plant and equipment 

Equipment 

$’000 

Group and Trust 

Cost 

At 1 January 2009 482 

Additions 7 

At 31 December 2009 489 

Additions 7 

Disposal (7) 

At 31 December 2010 489 

Accumulated depreciation 


Charge for the year 53 


Charge for the year 38 

Disposal (3) 

At 31 December 2010 479 

Carrying amount 



At 31 December 2010 10

86 




5 Investment properties 



$’000 $’000 

At 1 January 4,202,000 4,352,000 

Capital expenditure capitalised 1,285 847 

4,203,285 4,352,847 

Changes in fair value of investment properties 248,715 (150,847) 

At 31 December 4,452,000 4,202,000 

The investment properties, Suntec City Mall and part of Suntec City Office Tower 3, with a total carrying value of 

$1,773,200,000 (2009: Suntec City Mall, Suntec City Office Towers 3 and 4, with a total carrying value of $2,931,000,000), 

have been mortgaged as security for credit facilities granted to the Group (Note 12). 

Investment properties are stated at fair value based on valuations performed by independent professional valuers. 

The fair value is based on market value, being the estimated amount for which a property could be exchanged on the 

date of valuation between a willing buyer and a willing seller in an arm’s length transaction after property marketing 

wherein the parties had acted knowledgeably, prudently and without compulsion. 

In determining the fair value, the valuers have used valuation methods which involve certain estimates. The valuation 

methods used are in the Portfolio Statements. The Manager is of the view that the valuation methods and estimates are 

reflective of the market condition at the date of the valuation. The key assumptions used to determine the fair value of 

the investment properties include estimated net cash flows expected to be received on renting out the properties, marketcorroborated 

capitalisation yield, terminal yield and discount rate. 

6 Intangible asset 



$’000 $’000 

Cost 

Balance at 1 January 91,498 91,498 

Addition 84,800 – 

Balance at 31 December 176,298 91,498 

Amortisation 

Balance at 1 January 55,374 30,615 

Amortisation for the year 20,895 24,759 

Balance at 31 December 76,269 55,374 


At 1 January 2009 60,883 

At 31 December 2009 36,124 

At 31 December 2010 100,029 

Intangible asset represents the unamortised income support receivable by the Group and the Trust under the Deeds of 

Income Support entered into with Cavell Limited and Choicewide Group Limited, the vendors of the one-third interest in 

One Raffles Quay Pte Ltd and BFC Development Pte. Ltd. respectively.



87 


7 Interest in jointly controlled entities 

GroUP 

trust 


$’000 $’000 $’000 $’000 

Investment in jointly controlled entities 1,412,332 519,007 870,443 – 

Loans to jointly controlled entities 627,348 361,946 604,348 344,946 

2,039,680 880,953 1,474,791 344,946 

The loans to jointly controlled entities are unsecured. Included in the loans is an amount of $604,348,000 (2009: $344,946,000) 

which bears interest between 3.0% to 3.3% (2009: 3.0%) per annum above the three-month Singapore Dollar Swap Offer 

Rate and settlement is neither planned nor likely to occur in the foreseeable future. As the amount is, in substance, a part 

of the Group’s and the Trust’s net investment in the entities, it is stated at cost. The remaining amount of $23,000,000 (2009: 

$17,000,000) bears interest at 10.0% (2009: 7.5%) per annum and is repayable on 30 September 2014. 

Included in investment in jointly controlled entities of the Group are non-audit fees paid/payable to auditors of the Trust 

capitalised of $381,000 (2009: $18,000). 

Details of the jointly controlled entities are as follows: 

Name of jointly Country of Effective equity held 

controlled entities incorporatioN BY the Group 


% % 

One Raffles Quay Pte Ltd (1) Singapore 33.33 33.33 

Harmony Investors Group Limited (2) British Virgin Islands 20.00 20.00 

BFC Development Pte. Ltd. (1) Singapore 33.33 – 

One Raffles Quay Pte Ltd owns the property One Raffles Quay. 

BFC Development Pte. Ltd. owns Marina Bay Financial Centre Towers 1 and 2 and the Marina Bay Link Mall. 

(1) 

Audited by Ernst & Young LLP. The Manager’s Board of Directors and Audit Committee are satisfied that the appointment will not 

compromise the standard and effectiveness of the audit. 

(2) 

Not required to be audited under the laws of the country in which it is incorporated. 

Acquisition of one-third interest in BFC Development Pte. Ltd. 

On 9 December 2010, the Group completed the acquisition of a one-third interest in BFC Development Pte. Ltd. 

The following table summarises the proportion of the amounts of net assets recognised as of the acquisition date and the 

fair value of the total consideration transferred: 

Identifiable assets acquired and liabilities assumed 


$’000 

Investment property 4,289,111 

Loans (1,677,782) 

Total identifiable net assets 2,611,329 

One-third interest 870,443

88 




7 Interest in jointly controlled entities (CONTINUED) 

Fair value of total consideration transferred at acquisition date 


$’000 

Purchase consideration for share of net assets acquired 1,495,800 

Shareholders’ loan assumed (559,261) 

Acquisition fee and other related expenses 18,704 

Total consideration transferred 955,243 

Represented by: 

Share of identifiable net assets acquired 870,443 

Intangible asset 84,800 

955,243 

The summarised financial information of the Group’s interest in the jointly controlled entities, adjusted for the percentage 

of ownership held by the Group, is as follows: 

Group 


$’000 $’000 

Assets and liabilities 

Non-current assets 1,864,598 413,446 

Current assets 518,964 516,317 

Total assets 2,383,562 929,763 

Current liabilities 14,478 360,330 

Non-current liabilities 956,752 50,426 

Total liabilities 971,230 410,756 

Results 

Revenue 39,208 34,886 

Expenses (32,195) (25,042) 

Net change in fair value of investment properties 23,924 (83,166) 

Net profit/(loss) for the year 30,937 (73,322) 

8 Investments in subsidiaries 

Trust 


$’000 $’000 

Equity investment at cost 535,506 511,329 

Details of the subsidaries are as follows: 

E effective equity held 

Name of subsidiaries Country of incorporatioN BY the Trust 


% % 

Comina Investment Limited (1) British Virgin Islands 100 100 

Suntec Harmony Pte. Ltd. (2) Singapore 100 100 

(1) 

Not required to be audited under the laws of the country in which it is incorporated. 

(2) 

Audited by KPMG LLP Singapore



89 


9 Financial derivatives 



$’000 $’000 

Derivative assets 

- Interest rate swaps at fair value through Statement of Total Return 1,178 1,762 

Current 762 – 

Non-current 416 1,762 

1,178 1,762 

Derivative liabilities 

- Interest rate swaps at fair value through Statement of Total Return 513 2,131 

- Embedded derivatives relating to convertible bonds 8,459 14,992 

8,972 17,123 

Current 8,756 1,581 

Non-current 216 15,542 

8,972 17,123 

The Group uses interest rate swaps to manage its exposure to interest rate movements on its floating rate interest-bearing 

term loans and short term borrowings by swapping the interest expense on a proportion of these term loans and short 

term borrowings from floating rates to fixed rates and vice versa. 

Interest rate swaps with a total notional amount of $675,000,000 (2009: $225,000,000) have been entered into at the 

balance sheet date to provide fixed and floating rate funding for terms of 3 to 5 years (2009: 3 to 5 years) at an average 

interest rate of 0.27009% to 3.725% (2009: 0.49087% to 3.725%) per annum. 

10 Trade and other receivables 

GroUP 

trust 


$’000 $’000 $’000 $’000 

Trade receivables 4,965 8,013 4,965 8,013 

Impairment losses (2,551) (2,982) (2,551) (2,982) 

Net receivables 2,414 5,031 2,414 5,031 

Deposits – 267 – 267 

Amount due from: 

- jointly controlled entities 3,419 11,824 – – 

- subsidiaries – – 3,320 28,499 

Loans and receivables 5,833 17,122 5,734 33,797 

Prepayments and other receivables 852 672 853 672 

6,685 17,794 6,587 34,469 

The trade receivables in respect of Suntec City Mall and part of Suntec City Office Tower 3 amounting to $4,086,000 

(2009: Suntec City Mall, Suntec City Office Towers 3 and 4 amounting to $7,777,000) are charged or assigned by way of 

security for credit facilities granted to the Group (Note 12). 

The amounts due from the jointly controlled entities and the subsidiaries are non-trade in nature, unsecured, interest-free 

and repayable on demand. 

The exposure of the Group and the Trust to credit risk and impairment losses related to trade receivables is disclosed 

in Note 15.

90 




11 Cash and cash equivalents 

GroUP 

trust 


$’000 $’000 $’000 $’000 

Cash at bank and in hand 21,405 16,298 20,821 16,298 

Fixed deposits with a financial institution 31,088 14,930 31,088 14,930 

52,493 31,228 51,909 31,228 

The weighted average effective interest rate relating to cash and cash equivalents at the balance sheet date for the 

Group and the Trust is 0.0715% and 0.0724% (2009: 0.0776% for both the Group and the Trust) per annum respectively. 

Interest rates reprice at intervals of one month. 

Cash and cash equivalents in respect of Suntec City Mall and part of Suntec City Office Tower 3 amounting to $3,731,000 

(2009: Suntec City Mall, Suntec City Office Towers 3 and 4 amounting to $6,874,000) are charged or assigned by way of 

security for credit facilities granted to the Group (Note 12). 

The exposure of the Group and the Trust to interest rate risk related to financial assets are disclosed in Note 15. 

12 Interest-bearing borrowings 


Note 2010 2009 

$’000 $’000 

Term loans 

- secured 788,647 650,849 

- unsecured 1,493,882 804,061 

2,282,529 1,454,910 

Convertible bonds 

- unsecured 14 272,115 266,812 

2,554,644 1,721,722 

Current 404,585 – 

Non-current 2,150,059 1,721,722 

2,554,644 1,721,722 

The exposure of the Group and the Trust to liquidity and interest rate risks related to interest-bearing borrowings are 

disclosed in Note 15. 

Terms and debt repayment schedule 

Terms and conditions of outstanding interest-bearing borrowings are as follows: 

Weighted 2010 2009 

Average nominal Year of fACe CarryiNG fACe Carrying 

interest rate maturity value amount value amount 

% $’000 $’000 $’000 $’000 


Floating rate term loans 1.44 2011 to 2,105,000 2,078,524 1,275,000 1,251,612 

2012 

Fixed rate term loans 4.85 2011 to 207,500 204,005 207,500 203,298 

2016 

Convertible bonds 3.25 2013 270,000 272,115 270,000 266,812 

2,582,500 2,554,644 1,752,500 1,721,722



91 


12 Interest-bearing borrowings (CONTINUED) 

Terms and debt repayment schedule (continued) 

Interest-bearing borrowings at the balance sheet date of $2,554,644,000 (2009: $1,721,722,000) comprise the following: 

- $157,429,000 (2009: $157,299,000) unsecured term loan from Sunshine Assets Limited; 

- $1,336,453,000 (2009: $646,762,000) unsecured term loan from various institutional banks; 

- $272,115,000 (2009: $266,812,000) convertible bonds due 2013; and 

- $788,647,000 (2009: $650,849,000) secured term loan facilities from various institutional banks. 

(a) 

Term loan facility with Sunshine Assets Limited 

As at 31 December 2010, the Trust has in place a $157.5 million (2009: $157.5 million) term loan facility with Sunshine 

Assets Limited (“Sunshine”), a special purpose company. 

To fund the loan of $157.5 million to the Trust, Sunshine has raised funds by issuing $32.5 million secured fixed rate 

notes due 2011, $50.0 million secured fixed rate notes due 2011, $50.0 million secured floating rate notes due 2011 

and $25.0 million secured fixed notes due 2012, amounting to $157.5 million (collectively, the “Sunshine Notes”). 

The Sunshine Notes bear interest at rates ranging from 2.78% to 4.145% and the three-month Swap Offer Rate plus 

0.42%. The Sunshine Notes are secured by a debenture creating fixed and floating charges over all the assets of 

Sunshine, including its rights, title and interest in connection with the term loan facility granted to the Trust. 

(b) 

Secured term loan facilities with various institutional banks 

As at 31 December 2010, the Trust has in place a secured facilities of $800 million (2009: $675 million) term loan 

facilities with a panel of banks. 

The facilities are secured on the following: 

- a first legal mortgage on Suntec City Mall and part of Suntec City Office Tower 3 (the “Properties”); 

- a first fixed charge over the central rental collection account in relation to the Properties (Notes 10 and 11); 

- an assignment of the Trust’s rights, title and interest in the tenancy documents and the proceeds in connection 

with the Properties; 

- an assignment of the Trust’s rights, title and interest in the insurance policies in relation to the Properties; 

- a fixed and floating charge over the assets of the Trust in relation to the Properties, agreements, collateral, as 

required by the financial institutions granting the facilities (Note 5); and 

- an assignment of any interest swap facilities, which may be entered into by the Trust in relation to the term 

loan facilities. 

The current portion of the interest-bearing borrowings comprise term loans of $132.5 million which are due in 2011, 

and $270.0 million convertible bonds with a put option exercisable on 20 March 2011 (Note 14). 

13 Trade and other payables 



$’000 $’000 

Trade and other payables 3,140 5,670 

Accrued operating expenses 11,121 14,317 

Amounts due to related parties (trade) 1,393 1,055 

Accrued income 16,677 6,602 

Interest payable 8,772 7,737 

41,103 35,381 

The amounts due to related parties are unsecured and interest-free. Included in the amounts due to related parties is 

an amount due to the Trustee, the Manager and a related party of the Manager of $169,000, $716,000 and $508,000 

(2009: $227,000, $423,000 and $Nil) respectively. Transactions with related parties are priced on an arm’s length basis.

92 




14 Convertible bonds – debt component 



$’000 $’000 

Carrying amount of debt component at 1 January 266,812 259,897 

Amortisation of transaction costs 865 862 

Interest accretion 4,438 6,053 

Carrying amount of debt component at 31 December 272,115 266,812 

In 2008, the Trust issued $270.0 million principal amounts of convertible bonds (the “Bonds”) due 2013 which carry a 

coupon interest at 3.25% per annum. The Bonds are convertible by bondholders into Units at the conversion price of 

$1.723 (2009: $1.759) at any time on or after 30 April 2008 up to 3.00 p.m. on 13 March 2013 or, if redeemed prior to 

13 March 2013, then up to 3.00 p.m. on a date no later than 7 business days prior to the date fixed for redemption thereof. 

Based on the conversion price, the Bonds are convertible into approximately 156,703,424 Units (31/12/2009: 153,496,305 

Units), representing 7.1% (31/12/2009: 8.5%) of the total number of Units of the Trust in issue as at 31 December 2010. 

The Trust has the option to pay cash in lieu of issuing new Units on conversion of any Bonds. 

The Bonds may be redeemed, in whole or in part, at the option of the bondholder on 20 March 2011 at a put price of 

103.164% together with any accrued but unpaid interest up to that date. To exercise such right, the holder of the relevant 

bond must, within a period of three months prior to 20 March 2011, complete, sign and deposit the notice of redemption 

with the payment agent. 

The Bonds may also be redeemed, in whole but not in part, at the option of the Trust on or at any time after 20 March 2011 

but not less than 7 business days prior to 20 March 2013 (subject to the satisfaction of certain conditions) having given not 

less than 30 nor more than 60 days’ notice to the bondholders. The early redemption amount represents a gross yield to 

maturity of 4.25% per annum, on a semi-annual basis calculated on the basis of a 360-day year consisting of 12 months of 

30 days each and, in the case of an incomplete month, the number of days elapsed. 

Unless previously redeemed by the bondholders on 20 March 2011 or by the Trust at any time on or after 20 March 2011 

and not less than 7 business days prior to 20 March 2013, the final redemption date of the Bonds is 20 March 2013. The 

redemption price upon maturity is equal to 105.5063% of the principal amount, together with any accrued but unpaid 

interest accrued to the date of redemption, on the final redemption date. 

As at 31 December 2010, the effective interest rate for the Bonds – debt component is approximately 5.25% (2009: 5.25%) 

per annum. 

15 Financial instruments 

Credit risk 

Exposure to credit risk 

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at 

the reporting date was: 

GroUP 

trust 



NOTE 2010 2009 2010 2009 

$’000 $’000 $’000 $’000 

Loans to jointly controlled entities 7 627,348 361,946 604,348 344,946 

Derivative assets at fair value 

through Statement of Total Return 9 1,178 1,762 1,178 1,762 

Loans and receivables 10 5,833 17,122 5,734 33,797 

Cash and cash equivalents 11 52,493 31,228 51,909 31,228 

686,852 412,058 663,169 411,733



93 


15 Financial instruments (CONTINUED) 

Credit risk (continued) 

Exposure to credit risk (continued) 

The maximum exposure to credit risk for trade receivables at the reporting date by type of tenants is: 



$’000 $’000 

Office 214 498 

Retail 2,200 4,533 

2,414 5,031 

The Group’s tenants are engaged in a wide spectrum of business activities across many industry segments. The Group’s 

most significant tenant accounts for $1,093,000 (2009: $1,245,000) of the trade receivables carrying amount as at the 

balance sheet date. 

Impairment losses 

The ageing of trade receivables at the balance sheet date is: 

iMPAirment 

iMPAirment 

Gross losses Gross losses 

2010 2010 2009 2009 

$’000 $’000 $’000 $’000 


Not past due 1,705 – 2,617 – 

Past due 31 – 60 days 461 – 968 – 

Past due 61 – 90 days 297 49 489 – 

More than 90 days 2,502 2,502 3,939 2,982 

4,965 2,551 8,013 2,982 

The movement in the allowance for impairment in respect of trade receivables during the year was as follows: 



$’000 $’000 

At 1 January 2,982 1,133 

Impairment loss recognised 430 2,186 

Allowance utilised during the year (861) (337) 

At 31 December 2,551 2,982 

Based on historic default rates, the Manager believes that, apart from the above, no additional impairment allowance is 

necessary in respect of trade receivables as these receivables mainly arose from tenants that have a good track record with 

the Group, and the Group has sufficient security deposits as collateral. 

The allowance account in respect of trade receivables is used to record impairment losses unless the Group and the Trust 

are satisfied that no recovery of the amounts owing are possible; at that point the amounts are considered irrecoverable 

and are written off against the financial asset directly. At 31 December 2010, the Group and the Trust do not have any 

collective impairment on its trade receivables (2009: nil).

94 





Credit risk (continued) 

Liquidity risk 

The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding 

the impact of netting agreements: 

Cash flows 

Carrying Contractual Within Within More than 

AMount cash flows 1 year 1 to 5 years 5 years 

$’000 $’000 $’000 $’000 $’000 




Financial liabilities measured 

at amortised cost: 

- Floating rate term loans 2,078,524 2,225,028 34,156 2,190,872 – 

- Fixed rate term loans 204,005 243,838 7,814 132,949 103,075 

- Convertible bonds 272,115 304,340 8,775 295,565 – 

- Trade and other payables 41,103 41,103 41,103 – – 

- Security deposits 60,691 60,691 22,452 38,239 – 

2,656,438 2,875,000 114,300 2,657,625 103,075 

Derivative financial liabilities 

Financial liabilities at fair value 

through Statement of Total Return 

- Interest rate swaps 513 4,108 1,672 2,436 – 

2,656,951 2,879,108 115,972 2,660,061 103,075 


2009 


Financial liabilities measured 

at amortised cost: 

- Floating rate term loans 1,251,612 1,359,309 36,232 1,323,077 – 

- Fixed rate term loans 203,298 253,902 10,064 134,563 109,275 

- Convertible bonds 266,812 313,115 8,775 304,340 – 

- Trade and other payables 35,381 35,381 35,381 – – 

- Security deposits 61,613 61,613 23,374 38,239 – 

1,818,716 2,023,320 113,826 1,800,219 109,275 

Derivative financial liabilities 

Financial liabilities at fair value 

through Statement of Total Return 

- Interest rate swaps 2,131 3,260 3,052 208 – 

1,820,847 2,026,580 116,878 1,800,427 109,275



95 



Interest rate risk 

Cash flow sensitivity analysis for variable rate instruments 

For the interest rate swaps and the other variable rate financial liabilities, a change of 30 basis points (“bp”) (2009: 50 bp) 

in interest rate at the reporting date would increase/(decrease) total return (before any tax effects) by the amounts 

shown below. There is no impact on Unitholders’ funds. This analysis assumes that all other variables remain constant. 

statement of total return 

30 bp 30 bp 

increase decrease 

$’000 $’000 



Interest-bearing borrowings (floating rate) (6,315) 6,315 

Interest rate swaps 2,299 (2,262) 

(4,016) 4,053 

statement of total return 

50 bp 50 bp 

increase decrease 

$’000 $’000 

2009 

Interest-bearing borrowings (floating rate) (6,375) 6,375 

Interest rate swaps 435 (436) 

(5,940) 5,939 

Fair value sensitivity analysis for fixed rate instruments 

The Group does not account for any fixed rate financial assets and liabilities at fair value through the Statement of Total Return, 

nor does the Group designate derivatives (interest rate swaps) as hedging instruments under a fair value hedge accounting 

model. Therefore, a change in interest rates at the reporting date would not affect the Statement of Total Return.

96 





Classification and fair value of financial instruments 

The fair values of financial assets and liabilities, together with the carrying amounts shown in the balance sheet, are as follows: 

other totAL 

DESIGNATED AT LOANS AND FINANCIAL CARRYING 

NOTE fAIR VALUE RECEIVABLES LIABILITIES AMOUNT FAIR VALUE 

$’000 $’000 $’000 $’000 $’000 

Group 


Financial derivatives 9 1,178 – – 1,178 1,178 

Loans and receivables 10 – 5,833 – 5,833 5,833 

Cash and cash equivalents 11 – 52,493 – 52,493 52,493 

1,178 58,326 – 59,504 59,504 

Financial derivatives 9 (8,972) – – (8,972) (8,972) 

Interest-bearing borrowings 12 – – (2,282,529) (2,282,529) (2,296,621) 

Trade and other payables 13 – – (41,103) (41,103) (41,103) 

Security deposits – – (60,691) (60,691) (59,975) 

Convertible bonds 14 – – (272,115) (272,115) (283,141) 

(8,972) – (2,656,438) (2,665,410) (2,689,812) 

2009 




1,762 48,350 – 50,112 50,112 






(17,123) – (1,818,716) (1,835,839) (1,856,928)



97 



Classification and fair value of financial instruments (continued) 

other totAL 

DESIGNATED AT LOANS AND FINANCIAL CARRYING 

NOTE fAIR VALUE RECEIVABLES LIABILITIES AMOUNT FAIR VALUE 

$’000 $’000 $’000 $’000 $’000 

Trust 





1,178 57,643 – 58,821 58,821 






(8,972) – (2,656,438) (2,665,410) (2,689,812) 

2009 




1,762 65,025 – 66,787 66,787 






(17,123) – (1,818,716) (1,835,839) (1,839,945)

98 





Fair values 

Estimation of fair values 

Fair values of the financial instruments of the Group and the Trust have been determined for measurement and/or 

disclosure purposes based on the following methods: 

Derivatives 

The fair value of interest rate swaps is based on broker quotes at the balance sheet date. These quotes are tested for 

reasonableness by discounting estimated future cash flows based on the terms and maturity of each swap and using 

market interest rates for similar instruments at the measurement date. 

The fair value of the embedded derivative component of the convertible bonds is the difference between the fair value 

of the convertible bonds based on broker quotes at the balance sheet date and the fair value of the liability component 

of the convertible bonds, determined using the discounted cash flow technique. 


The fair values of the non-current portion of security deposits, fixed interest-bearing borrowings, borrowings which 

reprice after three months, which are determined for disclosure purposes, are estimated using the discounted cash flow 

technique. Future cash flows are based on management’s best estimates and the discount rate is based on a market-related 

rate for a similar instrument at the balance sheet date. 

Other financial assets and liabilities 

The carrying amounts of financial assets and liabilities with a maturity of less than one year (including trade and other 

receivables, cash and cash equivalents, trade and other payables and interest-bearing borrowings which reprice within 

six months) are assumed to approximate their fair values because of the short period to maturity or repricing. 

Interest rates used in determining fair values 

The Group used the following interest rates to discount estimated cash flows: 



% % 

Non-current portion of security deposits 1.907 2.74 

Fixed rate borrowings 1.237 – 4.50 1.78 – 6.20 

Convertible bonds 3.34 5.04



99 



Fair value hierarchy 

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been 

defined as follows: 

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities; 

• Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, 

either directly (i.e., as prices) or indirectly (i.e., derived from prices); and 

• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). 

level 2 Level 3 total 

$’000 $’000 $’000 




- interest rate swaps 1,178 – 1,178 


- interest rate swaps (513) – (513) 

- embedded derivatives relating to convertible bonds – (8,459) (8,459) 

(513) (8,459) (8,972) 

665 (8,459) (7,794) 

2009 


- interest rate swaps 1,762 – 1,762 


- interest rate swaps (2,131) – (2,131) 

- embedded derivatives relating to convertible bonds – (14,992) (14,992) 

(2,131) (14,992) (17,123) 

(369) (14,992) (15,361) 

During the financial year ended 31 December 2010, there were no transfers between Level 1 and Level 2. 

The Level 3 financial instruments measured at fair value are as follows: 


$’000 $’000 


Embedded derivatives relating to convertible bonds 

As at 1 January (14,992) (1,863) 

Changes in fair value recognised in Statement of Total Return 6,533 (13,129) 

As at 31 December (8,459) (14,992) 

Total gain/(loss) for the year included in Statement of Total Return for 

financial instruments held at the balance sheet date 6,533 (13,129)

100 

PAssion to deliver 




Fair value hierarchy (continued) 

Gain/(loss) for the year included in the Statement of Total Return is presented in finance income/finance expense as follows: 

fiNANce finance 

income expense 


$’000 $’000 


Total gain/(loss) for the year included in Statement of Total Return 6,533 (13,129) 

Total gain/(loss) for the year included in Statement of Total Return for 

financial instruments held at 31 December 6,533 (13,129) 

The fair value of the embedded derivative relating to convertible bonds has been determined using the discounted 

cash flows approach. The valuation requires management to estimate the expected cash flows over the life of the 

convertible bonds to investors, which are not evidenced by observable market data. If the assumptions applied by 

management were 5.0% favourable or unfavourable with all other variables held constant, the fair value of the 

embedded derivative relating to the convertible bonds would decrease/(increase) by $13,457,000 (2009: $11,926,000) 

and ($13,451,000) (2009: ($11,904,000)) respectively. The analysis is performed on the same basis for 2010. 

16 Units in issue 



’000 ’000 

Units in issue: 

At 1 January 1,797,300 1,571,198 

Issue of Units: 

- asset management fees paid in Units 15,561 28,170 

- acquisition fee paid in Units 10,266 431 

- private placement of new Units 313,000 128,500 

- deferred consideration on investment properties acquired 69,001 69,001 

At 31 December 2,205,128 1,797,300 

Units to be issued: 

- asset management fees payable in Units 4,242 4,077 

- deferred consideration on investment properties acquired 1 – 69,001 

4,242 73,078 

Total issued and issuable Units at 31 December 2,209,370 1,870,378 

1 

The deferred consideration units comprising a total of six equal instalments to the vendor of Suntec City Mall and Suntec City Office 

Towers had been fully issued in financial year ended 31 December 2010.

Passion to deliver 


101 


16 Units in issue (CONTINUED) 

During the year, there were the following issues of Units: 

• 15,561,317 (2009: 28,170,278) Units were issued at unit prices ranging from $1.3072 to $1.5039 (2009: $0.586 to 

$1.090) per Unit, amounting to $21,347,000 (2009: $22,058,000) in satisfaction of asset management fees payable 

in Units; 

• 10,266,300 (2009: 431,074) Units were issued at $1.457 (2009: $1.090) per Unit to the Manager in satisfaction of the 

acquisition fee of $14,958,000 (2009: $470,000) for the acquisition of the one-third interest in BFC Development 

Pte. Ltd. (2009: 20% interest in Harmony Investors Group Limited); 

• 313,000,000 (2009: 128,500,000) Units (“Private Placement Units”) issued at $1.37 (2009: $1.19) per Unit, were placed 

out on 9 December 2010 (2009: 22 December 2009); and 

• 69,000,722 (2009: 69,000,724) Units were issued at $1.000 per Unit to Suntec City Development Pte Ltd, amounting 

to $69,000,722 (2009: $69,000,724) in satisfaction of the fifth and final instalments of deferred consideration on the 

initial portfolio of properties acquired during the IPO. 

Each Unit in the Trust represents an undivided interest in the Trust. The rights and interests of Unitholders are contained 

in the Trust Deed and include the right to: 

• receive income and other distributions attributable to the Units held; 

• participate in the termination of the Trust by receiving a share of all net cash proceeds derived from the realisation 

of the assets of the Trust and available for purposes of such distribution less any liabilities, in accordance with their 

proportionate interests in the Trust. However, a Unitholder has no equitable or proprietary interest in the underlying 

assets of the Trust and is not entitled to the transfer to it of any assets (or part thereof) or of any estate or interest 

in any asset (or part thereof) of the Trust; and 

• attend all Unitholders’ meetings. The Trustee or the Manager may (and the Manager shall at the request in writing 

of not less than 50 Unitholders or one-tenth in number of the Unitholders, whichever is the lesser) at any time 

convene a meeting of Unitholders in accordance with the provisions of the Trust Deed. 

The Unitholders cannot give any directions to the Manager or the Trustee (whether at a meeting of Unitholders or 

otherwise) if it would require the Trustee or the Manager to do or omit doing anything which may result in: 

• the Trust ceasing to comply with the Listing Manual issued by SGX-ST or the Property Fund Appendix; or 

• the exercise of any discretion expressly conferred on the Trustee or the Manager by the Trust Deed or the 

determination of any matter for which the agreement of either or both the Trustee and the Manager is required 

under the Trust Deed. 

A Unitholder’s liability is limited to the amount paid or payable for any Units. The provisions of the Trust Deed provide that 

no Unitholders will be personally liable to indemnify the Trustee or any creditor of the Trustee in the event that liabilities 

of the Trust exceed its assets.

102 




17 Net asset value per Unit 

GroUP 

trust 

NOTE 2010 2009 2010 2009 

$’000 $’000 $’000 $’000 

Net asset value per Unit is based on: 

Net assets 3,984,633 3,327,857 3,954,568 3,319,854 

’000 ’000 ’000 ’000 

Total issued and issuable 

Units at 31 December 16 2,209,370 1,870,378 2,209,370 1,870,378 

18 Gross revenue 

GroUP 

trust 


$’000 $’000 $’000 $’000 

Gross rental income 249,230 252,929 249,230 252,929 

Dividend income from subsidiaries – – 11,432 11,189 

Others 249 209 249 209 

249,479 253,138 260,911 264,327 

19 Property expenses 



$’000 $’000 

Advertising and promotion expenses 4,374 4,820 

Allowance for doubtful receivables 430 2,186 

Depreciation of plant and equipment 38 53 

Maintenance expenses 2,169 2,006 

Contributions to maintenance funds 16,534 16,534 

Property management fees (including reimbursables) 7,277 8,460 

Property tax 17,617 21,877 

Rental subsidies – 714 

Utilities 2,378 2,122 

Others 5,572 2,131 

56,389 60,903 

Property expenses represent the direct operating expenses arising from rental of investment properties. 

20 Other income 

Other income relates to the income support received/receivable by the Group and the Trust under the Deeds of Income 

Support entered into with Cavell Limited and Choicewide Group Limited, the vendors of the one-third interest in 

One Raffles Quay Pte Ltd (“ORQPL”) and BFC Development Pte. Ltd. (“BFCPL”). ORQPL holds One Raffles Quay and BFCPL 

holds Marina Bay Financial Centre Towers 1 and 2 and the Marina Bay Link Mall.



103 


21 Finance income and expense 

GroUP 

trust 


$’000 $’000 $’000 $’000 

Recognised in the Statement of Total Return 

Interest income: 

- bank deposits 33 109 33 109 

- interest rate swaps 1,958 2,033 1,958 2,033 

- loan to jointly controlled entities 13,972 12,826 11,411 12,502 

Gain arising from remeasurement of derivatives 9,300 1,739 9,300 1,739 

Finance income 25,263 16,707 22,702 16,383 

Interest expense: 

- bank loans (36,280) (26,693) (36,280) (26,693) 

- the Bonds (8,775) (8,775) (8,775) (8,775) 

- interest rate swaps (4,796) (9,354) (4,796) (9,354) 

Amortisation of transaction costs (29,580) (14,057) (29,580) (14,057) 

Loss arising from remeasurement of derivatives (1,734) (13,860) (1,734) (13,860) 

Finance expense (81,165) (72,739) (81,165) (72,739) 

Recognised in the Statement of Total Return (55,902) (56,032) (58,463) (56,356) 

22 Asset management fees 

Included in the asset management fees of the Group and the Trust is an aggregate of 15,725,881 (2009: 24,680,603) Units, 

amounting to $22,345,000 (2009: $21,863,000), that have been or will be issued to the Manager in satisfaction of the asset 

management fees payable in Units. 

23 Other charges 

Included in other charges are the following items: 



$’000 $’000 

Non-audit fees paid to auditors of the Trust 44 65

104 




24 Income tax expense 

GroUP 

trust 


$’000 $’000 $’000 $’000 

Tax expense 

Current year 2,029 2,723 2,029 2,723 

Reconciliation of effective tax rate 

Net income 139,029 34,645 116,967 118,832 

Less: Share of (profit)/loss of 

jointly controlled entities (30,937) 73,322 – – 

Net income before share of result of 

jointly controlled entities 108,092 107,967 116,967 118,832 

Income tax using the Singapore tax rate 

of 17% (2009: 17%) 18,376 18,354 19,884 20,201 

Non-tax deductible items 13,901 13,476 13,061 12,793 

Non-taxable income (2,016) (295) (1,581) (295) 

Tax exempt income – – (1,103) (1,164) 

Tax transparency (28,232) (28,812) (28,232) (28,812) 

2,029 2,723 2,029 2,723 

25 Earnings per Unit 

Basic earnings per Unit is based on: 

GroUP 

trust 


$’000 $’000 $’000 $’000 


Number of Units 

GroUP 

trust 


’000 ’000 ’000 ’000 

Weighted average number of Units: 

- outstanding during the year 1,896,610 1,662,888 1,896,610 1,662,888 

- to be issued as payment of asset 

management fees payable in Units 12 11 12 11 

- to be issued as satisfaction of deferred 

consideration on investment properties 

acquired (Note 16) – 69,001 – 69,001 

1,896,622 1,731,900 1,896,622 1,731,900 

In calculating diluted earnings per Unit, the total return for the period after tax and weighted average number of Units 

in issue are adjusted to take into account the dilutive effect arising from the dilutive Bonds, with the potential Units 

weighted for the period outstanding.



105 


25 Earnings per Unit (CONTINUED) 

GroUP 

trust 


$’000 $’000 $’000 $’000 

Total return for the period after tax 385,715 (118,925) 363,653 (34,738) 

Profit impact of conversion of the 

dilutive potential Units 7,545 – * 7,545 – * 

Adjusted total return for the period after tax 393,260 (118,925) 371,198 (34,738) 


GroUP 

trust 


’000 ’000 ’000 ’000 

Weighted average number of Units used in 

calculation of basic earnings per Unit 1,896,622 1,731,900 1,896,622 1,731,900 

Weighted average number of Units to be issued 

assuming conversion of the Bonds 156,703 – * 156,703 – * 

Weighted average number of Units used in 

calculation of diluted earnings per Unit 2,053,325 1,731,900 2,053,325 1,731,900 

* As at 31 December 2009, the potential Units relating to the Bonds and the related profit impact were excluded from the diluted earnings 

per Unit as the Bonds were anti-dilutive and the Group and the Trust did not have any other dilutive potential Units. 

As at 31 December 2010, the Group and the Trust had Bonds which were convertible into approximately 156,703,424 

(2009: 153,496,305) Units. 

26 Operating segments 

For the purpose of making resource allocation decisions and assessing segment performance, the Group’s chief operating 

decision maker reviews internal/management reports of its retail and office business segments. The nature of the leases 

(lease of retail, office or other space) is the factor used to determine the reportable segments. As the retail and office 

segments of each property are similar in economic characteristics, nature of services and type of customer, the retail and 

office segments of each property are aggregated accordingly to form the retail and office reportable segments. This forms 

the basis of identifying the operating segments of the Group under FRS 108 Operating Segments. 

Other operations segment, which relates to leasing of advertising space and car park, does not meet any of the quantitative 

thresholds for determining reportable segments for both 2010 and 2009. 

Segment revenue comprises mainly of income generated from its tenants. Segment net property income represents the 

income earned by each segment after allocating property operating expenses. This is the measure reported to the chief 

operating decision maker for the purpose of assessing segment performance. 

Unallocated items comprise mainly other income, trust-related income and expenses, changes in fair value of investment 

properties and income tax expense. 

Information regarding the Group’s reportable segments is presented in the tables below. 

Segment information in respect of the Group’s geographical segments is not presented as the Group’s activities for the 

year ended 31 December 2010 and 31 December 2009 related wholly to properties located in Singapore.

106 




26 Operating segments (CONTINUED) 

Information about reportable segments 

Office retail Others total 

$’000 $’000 $’000 $’000 


Gross revenue 117,334 122,871 9,274 249,479 

Property expenses (22,982) (28,493) (4,914) (56,389) 

Reportable segment net property income 94,352 94,378 4,360 193,090 

$’000 $’000 $’000 $’000 

2009 

Gross revenue 117,803 126,564 8,771 253,138 

Property expenses (24,991) (30,737) (5,175) (60,903) 

Reportable segment net property income 92,812 95,827 3,596 192,235 

Reconciliation of reportable segment net property income 

Group 


$’000 $’000 

Total return 

Reportable segment net property income 188,730 188,639 

Other net property income 4,360 3,596 

193,090 192,235 

Unallocated amounts: 

- Other income 22,410 26,170 

- Net finance costs (55,902) (56,032) 

- Amortisation of intangible assets (20,895) (24,759) 

- Asset management fees (27,932) (27,328) 

- Other trust expenses (2,679) (2,319) 

- Net change in fair value of investment properties 248,715 (150,847) 

Share of profit/(loss) of jointly controlled entities 30,937 (73,322) 

Consolidated total return for the year before tax 387,744 (116,202)



107 


27 Commitments 



$’000 $’000 

(a) 

(b) 

Capital commitments 

Capital expenditure contracted but not provided for 1,359 609 

Loan facilities to jointly controlled entities 562,652 22,054 

The Group and the Trust lease out their investment properties. Non-cancellable operating lease rentals receivable 

are as follows: 



$’000 $’000 

Within 1 year 208,147 218,279 

After 1 year but within 5 years 236,209 223,461 

444,356 441,740 

28 Contingent liability 

Pursuant to the tax transparency ruling from IRAS, the Trustee and the Manager have provided a tax indemnity for certain 

types of tax losses, including unrecovered late payment penalties that may be suffered by IRAS should IRAS fail to recover 

from Unitholders tax due or payable on distributions made to them without deduction of tax, subject to the indemnity 

amount agreed with IRAS. The amount of indemnity, as agreed with IRAS, is limited to the higher of $500,000 (2009: 

$500,000) or 1.0% (2009: 1.0%) of the taxable income of the Trust for the year ended 31 December 2010. Each yearly 

indemnity has a validity period of the earlier of seven years from the relevant year of assessment and three years from 

the termination of the Trust. 

29 Financial ratios 

GroUP 

trust 


% % % % 

Expenses to weighted average net assets 1 

- including performance component of 

asset management fees 1.52 1.59 1.52 1.63 

- excluding performance component of 

asset management fees 1.20 1.27 1.20 1.30 

Portfolio turnover rate 2 – – – – 

1 

The annualised ratios are computed in accordance with the guidelines of the Investment Management Association of Singapore. 

The expenses used in the computation relate to expenses of the Group and the Trust, excluding property expenses, interest expense 

and income tax expense. 

2 

The annualised ratio is computed based on the lesser of purchases or sales of underlying investment properties of the Group and the 

Trust expressed as a percentage of daily average net asset value.

108 




30 Significant related party transactions 

For the purposes of these financial statements, parties are considered to be related to the Group if the Group has the 

ability to directly or indirectly control the party or exercise significant influence over the party in making financial and 

operating decisions, or vice versa, or where the Group and the party are subject to a common significant influence. 

Related parties may be individuals or other entities. 

In the normal course of the operations of the Group, asset management fees and Trustee’s fees have been paid or are 

payable to the Manager and Trustee respectively. 

During the financial year, other than the transactions disclosed elsewhere in the financial statements, there were the 

following related party transactions: 



$’000 $’000 

Acquisition fees paid to the Manager 14,958 470 

Financial advisory fee paid to a related corporation of the Manager 1,071 – 

Leasing commission paid/payable to a related corporation of the Manager 3,298 – 

Rental income received/receivable from related corporations of the Manager 1,584 1,190 

Rental income received/receivable from a sponsor and a property manager – 619 

Property management fees and reimburseables paid/payable to a sponsor and a property manager – 6,529 

Property management fees payable to a related corporation of the Manager 6,500 404



109 


31 Financial risk management 

The Group has exposure to credit risk, liquidity risk and market risk. 

This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and 

processes for measuring and managing risk, and the Group’s management of capital. Further quantitative disclosures are 

included throughout these financial statements. 

Risk management framework 

Risk management is integral to the whole business of the Group. The Group has a system of controls in place to create an 

acceptable balance between the cost of risks occurring and the cost of managing the risk. The Manager monitors the Group’s 

risk management process to ensure that an appropriate balance between risk and control is achieved. Risk management 

policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. 

The Board of the Manager oversees how management monitors compliance with the Group’s risk management policies 

and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. 

The Board is assisted in its oversight role by the Audit Committee. The Audit Committee undertakes both regular and ad 

hoc reviews of risk management controls and procedures, the results of which are reported to the Board. 

Credit risk 

Credit risk is the potential financial loss resulting from the failure of a tenant or a counterparty to settle its financial and 

contractual obligations to the Group as and when they fall due. 

The Manager has established credit limits for tenants and monitors their balances on an on-going basis. Credit evaluations 

are performed by the Manager before lease agreements are entered into with tenants. The Group establishes an allowance 

for impairment, based on a specific loss component that relates to individually significant exposures, that represents its 

estimate of incurred losses in respect of trade and other receivables. 

Cash and fixed deposits are placed with financial institutions which are regulated. Transactions involving derivative 

financial instruments are allowed only with counterparties that are credit worthy. 

Liquidity risk 

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial 

liabilities that are settled by delivering cash or another financial asset. The Manager monitors and maintains a level of cash 

and cash equivalents deemed adequate to finance the Group’s operations and to mitigate the effects of fluctuations 

in cash flows. In addition, the Manager also monitors and observes the CIS Code issued by the MAS concerning limits on 

total borrowings. 

Market risk 

Market risk is the risk that changes in market prices, such as interest rates, which will affect the Group’s total return or the 

value of its holdings of financial instruments. The objective of market risk management is to manage and control market 

risk exposures within acceptable parameters, while optimising the return on risk.

110 




31 Financial risk management (CONTINUED) 

Interest rate risk 

The Group’s exposure to changes in interest rates relates primarily to interest-bearing financial liabilities. Interest rate risk 

is managed by the Manager on an on-going basis with the primary objective of limiting the extent to which net interest 

expense could be affected by adverse movements in interest rates. 

As at 31 December 2010, the Group has entered into interest rate swaps with a total notional amount of $675 million 

(2009: $225 million) whereby the Group has agreed with counterparties to exchange, at specified intervals, the difference 

between floating rate and fixed rate interest amounts calculated by reference to the agreed notional principal amounts 

of the secured and unsecured term loans. 

In the previous year, one of the interest rate swaps with a notional amount of $500 million had been accounted for as a 

cash flow hedge, as described in Note 3.5. The interest rate swap expired during that year. The rest of the interest rate 

swaps do not qualify for hedge accounting under FRS 39 Financial Instruments: Recognition and Measurement, and are 

classified as economic hedges. The swaps are being used to hedge the exposure to varying cash flows due to changes in 

interest rates. The loans and interest rate swaps have varying terms and conditions. 

The fair value of the above swaps at 31 December 2010 is a net asset of $665,000 (2009: net liability of $369,000), 

comprising assets of $1,178,000 (2009: $1,762,000) and liabilities of $513,000 (2009: $2,131,000) (Note 9). 

Capital management 

The Board of the Manager reviews the Group’s capital management policy regularly so as to optimise Unitholders’ return 

through a mix of available capital sources. The Group monitors its gearing ratio and maintains it within the approved 

limits. The Group assesses its capital management approach as a key part of the Group’s overall strategy, and this is 

continuously reviewed by the Manager. The Group's gearing stood at 38.4% (2009: 33.3%) as at 31 December 2010. 

The Group is subject to the aggregate leverage limit as defined in the Property Funds Appendix. The Property Funds 

Appendix stipulates that the total borrowings and deferred payments (together the “Aggregate Leverage”) of a 

property fund should not exceed 35.0% of the fund’s deposited property. The aggregate leverage of a property fund 

may exceed 35.0% of the fund’s deposited property (up to a maximum of 60.0%) only if a credit rating of the property 

fund from Fitch Inc., Moody’s or Standard and Poor’s is obtained and disclosed to the public. The property fund 

should continue to maintain and disclose a credit rating so long as its aggregate leverage exceeds 35.0% of the fund’s 

deposited property. 

The Group's corporate family rating and unsecured debt rating is ‘Baa2’ (2009: 'Baa1') and 'Baa3' (2009: 'Baa2') 

respectively and has complied with the Aggregate Leverage limit of 60.0% during the financial year. There were no 

changes in the Group’s approach to capital management during the financial year.



111 

Statistics of Unitholdings 

Issued and Fully Paid-Up Units 

As at 24 February 2011 

There are 2,209,370,378 Units (voting rights: one vote per Unit) outstanding as at 24 February 2011. There is only one class of 

units in Suntec REIT. 

There were no treasury units held. 

Distribution of Unitholdings 


No. of 

Size of Unitholdings Unitholders % No. of Units % 

1 - 999 30 0.16 8,409 0.00 

1,000 - 10,000 15,119 79.46 57,730,550 2.61 

10,001 - 1,000,000 3,837 20.17 190,066,326 8.60 

1,000,001 and above 40 0.21 1,961,565,093 88.79 

TOTAL : 19,026 100.00 2,209,370,378 100.00 

Twenty Largest Unitholders 


No. Name No. of Units % 

1. Citibank Nominees Singapore Pte Ltd 636,677,907 28.82 

2. HSBC (Singapore) Nominees Pte Ltd 306,010,851 13.85 

3. DBS Nominees Pte Ltd 193,825,094 8.77 

4. United Overseas Bank Nominees Pte Ltd 153,180,627 6.93 

5. Suntec City Development Pte Ltd 139,420,484 6.31 

6. DBSN Services Pte Ltd 89,086,247 4.03 

7. DBS Vickers Securities (S) Pte Ltd 74,535,208 3.37 

8. Raffles Nominees Pte Ltd 52,989,995 2.40 

9. Chinowa Group Limited 51,657,365 2.34 

10. DB Nominees (S) Pte Ltd 40,392,505 1.83 

11. ARA Investors II Limited 34,092,985 1.54 

12. BNP Paribas Securities Services Singapore Pte Ltd 31,139,721 1.41 

13. Winsor Properties (Overseas) Limited 26,428,295 1.20 

14. Bank of Singapore Nominees Pte Ltd 15,886,782 0.72 

15. Lee Shau Kee 11,352,304 0.51 

16. PCK Corporation 10,811,338 0.49 

17. ARA Trust Management (Suntec) Limited 10,266,858 0.46 

18. Frank Wen-King Tsao 10,138,300 0.46 

19. Chow Chung Kai 9,366,595 0.42 

20. BNP Paribas Nominees Singapore Pte Ltd 9,192,200 0.42 

TOTAL: 1,906,451,661 86.28

112 



Statistics of Unitholdings 

Substantial Unitholders 



Direct Interest 

Deemed Interest 

1 Suntec City Development Pte Ltd 1 139,420,484 – 

2 Morgan Stanley 2 2,231,620 116,898,797 

3 Morgan Stanley International Holdings Inc. 2 1,244,000 116,091,797 

4 Morgan Stanley Investment Management Company 2 – 115,862,797 

Notes: 

1 

Units included 1,419,038 units held in trust for estate of deceased shareholder. 

2 

Based on information provided by Morgan Stanley. 

Manager’s Directors’ Unitholdings 

As at 21 January 2011 

As shown in the Register of Directors’ Unitholdings 


Direct Interest 

DEEMED Interest 

1 Lim Hwee Chiang, John – 44,359,908 1 

2 Tan Kian Chew 250,000 – 

3 Chen Wei Ching, Vincent 200,000 – 

4 Chow Wai Wai 2,221,729 – 

5 Yeo See Kiat 325,000 100,000 2 

Notes: 

1 

By virtue of Mr. Lim Hwee Chiang, John’s 0.24% direct interest in ARA Asset Management Limited (“ARA”) and 36.59% deemed interest in ARA 

through his 100% ownership in JL Investment Group Limited and JL Philanthropy Ltd. The beneficiary of JL Philanthropy Ltd is JL Charitable 

Settlement and Mr. Lim Hwee Chiang, John is the settlor of JL Charitable Settlement. Mr. Lim Hwee Chiang, John is deemed to be interested 

in 44,359,908 units held by the Manager and its fellow subsidiary, ARA Investors II Limited (“ARA Investors II”). Both the Manager and ARA 

Investors II are the wholly-owned subsidiaries of ARA. 

2 

Deemed interested in 100,000 units held by spouse. 

Free Float 

Based on the information made available to the Manager as at 24 February 2011, approximately 86.1% of the Units are held in 

the public hands. Under Rule 723 of the Listing Manual of the SGX-ST, a listed issuer must ensure that at least 10% of its listed 

securities are at all times held by public.



113 

Additional Information 

RELATED Party Transactions 

The transactions entered with related parties during the financial period and which fall within the Listing Manual of the 

SGX-ST and the Property Funds Appendix are: 

Aggregate value of all RELATED party transactions 

DUring the financial year under review 

(excluding transactions less than $100,000) 

$’000 

ARA Trust Management (Suntec) Limited and its associates 

Asset management fees 27,932 

Rental income 1,548 

Property management fees 6,500 

Acquisition fees 14,958 

Financial advisory fees 1,071 

Leasing commission 3,298 


Trustee fees 868 

Cavell Limited 

Income support 20,361 

Choicewide Group Limited 

Acquisition of one-third interest in BFC Development Pte. Ltd. 1,495,800 

Income support 2,049 

Subscription of Suntec REIT Units 

As at 31 December 2010, an aggregate of 2,205,128,443 Units were in issue. On 24 January 2011, Suntec REIT issued 4,241,935 

Units to the Manager as asset management fees for the period from 1 October 2010 to 31 December 2010.

114 



Notice of Annual General Meeting 

NOTICE IS HEREBY GIVEN that the second Annual General Meeting of Suntec Real Estate Investment Trust (“Suntec REIT”) 

will be held at Level 3, Rooms 303 to 305, Suntec Singapore International Convention & Exhibition Centre, 1 Raffles Boulevard, 

Suntec City, Singapore 039593 on Friday, 15 April 2011 at 11.00 am to transact the following business: 

AS ORDINARY BUSINESS 

1. To receive and adopt the Report of HSBC Institutional Trust Services (Singapore) Limited, as trustee of Suntec REIT 

(the “Trustee”), the Statement by ARA Trust Management (Suntec) Limited, as manager of Suntec REIT (the “Manager”) 

and the Audited Financial Statements of Suntec REIT for the financial year ended 31 December 2010 and the Auditors' 

Report thereon. 

(Resolution 1) 

2. To re-appoint KPMG LLP as the Auditors of Suntec REIT to hold office until the conclusion of the next Annual General 

Meeting of Suntec REIT, and to authorise the Manager to fix their remuneration. 

(Resolution 2) 

AS SPECIAL BUSINESS 

To consider and if thought fit, pass the following ordinary resolution, with or without any modifications: 

3. that authority be and is hereby given to the Manager to 

(a) (i) issue new units in Suntec REIT (“Units”) whether by way of rights, bonus or otherwise; and/or 

(ii) 

make or grant offers, agreements or options (collectively, “Instruments”) that might or would require Units 

to be issued, including but not limited to the creation and issue of (as well as adjustments to) warrants, 

debentures or other instruments convertible into Units, 

at any time and upon such terms and conditions and to such persons as the Manager may, in its absolute discretion 

deem fit; and 

(b) 

issue Units in pursuance of any Instrument made or granted by the Manager while this Resolution was in force 

(notwithstanding that the authority conferred by this Resolution may have ceased to be in force at the time such 

Units are issued),



115 


provided that: 

(A) 

the aggregate number of Units to be issued pursuant to this Resolution (including Units to be issued in pursuance of 

Instruments made or granted pursuant to this Resolution shall not exceed fifty percent (50%) of the total number 

of issued Units (excluding treasury Units, if any) (as calculated in accordance with sub-paragraph (B) below) at the time of 

the passing of this Resolution, of which the aggregate number of Units and convertible securities to be issued other than 

on a pro rata basis to all Unitholders shall not exceed twenty percent (20%) of the total number of issued Units (excluding 

treasury Units, if any) (as calculated in accordance with sub-paragraph (B) below); 

(B) 

subject to such manner of calculation as may be prescribed by the SGX-ST for the purpose of determining the aggregate 

number of Units that may be issued under sub-paragraph (A) above, the total number of issued Units (excluding treasury 

Units, if any) shall be based on the total number of issued Units (excluding treasury Units, if any) as at the time this 

Resolution is passed, after adjusting for: 

(i) 

(ii) 

any new Units arising from the conversion or exercise of any Instruments which are outstanding as at the time this 

Resolution is passed; and 

any subsequent bonus issue, consolidation or subdivision of Units; 

(C) 

in exercising the authority conferred by this Resolution, the Manager shall comply with the provisions of the Listing 

Manual of the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST) and the trust 

deed constituting Suntec REIT (as amended from time to time) (the "Trust Deed") (unless otherwise exempted or waived 

by the Monetary Authority of Singapore); 

(D) 

unless revoked or varied by the Unitholders in a general meeting, the authority conferred by this Resolution shall continue 

in force until (i) the conclusion of the next Annual General Meeting of Suntec REIT or (ii) the date by which the next Annual 

General Meeting of Suntec REIT is required by applicable regulations to be held, whichever is earlier; 

(E) 

where the terms of the issue of the Instruments provide for adjustment to the number of Instruments or Units into which 

the Instruments may be converted in the event of rights, bonus or other capitalisation issues or any other events, the 

Manager may issue additional Instruments or Units pursuant to such adjustment notwithstanding that the authority 

conferred by this Resolution may have ceased to be in force at the time the Instruments or Units are issued; and 

(F) 

the Manager and the Trustee be and are hereby severally authorised to complete and do all such acts and things (including 

executing all such documents as may be required) as the Manager or, as the case may be, the Trustee may consider 

expedient or necessary or in the interest of Suntec REIT to give effect to the authority conferred by this Resolution. 

[See Explanatory Notes] 

(Resolution 3)

116 




4. OTHER BUSINESS 

to transact any other business which may properly be brought forward. 

By Order of the Board of ARA Trust Management (Suntec) Limited 

As Manager of Suntec REIT 

Yvonne Choo 

Busarakham Kohsikaporn 

Company Secretaries 

Singapore 

23 March 2011 

Explanatory Notes to Resolutions to be passed: 

The Ordinary Resolution 3 above, if passed, will empower the Manager from the date of this Annual General Meeting until 

(i) the conclusion of the next Annual General Meeting of Suntec REIT or (ii) the date by which the next Annual General Meeting 

of Suntec REIT is required by the applicable regulations to be held, whichever is earlier, to issue Units and to make or grant 

instruments (such as securities, warrants or debentures) convertible into Units and issue Units pursuant to such instruments, up 

to a number not exceeding fifty percent (50%) of the total number of issued Units (excluding treasury Units, if any) of which up 

to twenty percent (20%) may be issued other than on a pro rata basis. 

For determining the aggregate number of Units that may be issued, the percentage of issued Units will be calculated based on 

the issued Units at the time Ordinary Resolution 3 above is passed, after adjusting for new Units arising from the conversion 

or exercise of any Instruments which are outstanding at the time this Resolution is passed and any subsequent bonus issue, 

consolidation or subdivision of Units. 

Fund raising by issuance of new Units may be required in instances of property acquisitions or debt repayments. In any event, 

if the approval of Unitholders is required under the Listing Manual of the SGX-ST and the Trust Deed or any applicable laws and 

regulations in such instances, the Manager will then obtain the approval of Unitholders accordingly.



117 

Corporate Directory 

TRUSTEE 


21 Collyer Quay #14-01 

HSBC Building 

Singapore 049320 

Telephone: +65 6658 0392 

Facsimile: +65 6534 5526 

MANAGER 


6 Temasek Boulevard #16-02 

Suntec Tower Four 


Telephone: +65 6835 9232 

Facsimile: +65 6835 9672 

DIRECTORS OF THE MANAGER 

Chiu Kwok Hung, Justin 


Lim Hwee Chiang, John 

Director 

Ip Tak Chuen, Edmond 

Director 

Tan Kian Chew 


Sng Sow-Mei (alias Poon Sow Mei) 


Lim Lee Meng 


Chen Wei Ching, Vincent 


(Appointed on 1 October 2010) 

Chow Wai Wai, John 

Non-executive Director 

Yeo See Kiat 

Chief Executive Officer and Director 

Ma Lai Chee, Gerald 

Alternate Director to Ip Tak Chuen, Edmond 

AUDIT COMMITTEE 

Tan Kian Chew 

Chairman 

Sng Sow-Mei (alias Poon Sow Mei) 

Member 

Lim Lee Meng 

Member 


Member 

DESIGNATED COMMITTEE 

Chow Wai Wai, John 

Chairman 

Tan Kian Chew 

Member 


Member 

Seow Bee Lian, Cheryl 

Member 

COMPANY SECRETARIES OF 

THE MANAGER 

Yvonne Choo 

Busarakham Kohsikaporn 

(Sharon Lim Siew Choo resigned on 1 December 2010) 

LEGAL ADVISER 

Allen & Gledhill LLP 

One Marina Boulevard #28-00 


Telephone: +65 6890 7188 

Facsimile: +65 6327 3800 

UNIT REGISTRAR 

Boardroom Corporate & Advisory Services Pte. Ltd. 

50 Raffles Place #32-01 

Singapore Land Tower 


Telephone: +65 6536 5355 

Facsimile: +65 6536 1360 

AUDITOR OF THE TRUST 

KPMG LLP 

16 Raffles Quay #22-00 

Hong Leong Building 


Telephone: +65 6213 3388 

Facsimile: +65 6225 2230 

(Partner-in-charge: Lo Mun Wai) 

(Appointed since Financial Year 2006) 

STOCK EXCHANGE QUOTATION 

BBG: SUN SP Equity 

RIC: SUNT.SI 

WEBSITES 

www.suntecreit.com 

www.ara-asia.com

This page is internationally left blank

SUNTEC REAL ESTATE INVESTMENT TRUST 

(Constituted in the Republic of Singapore pursuant to 

a trust deed dated 1 November 2004 (as amended)) 

Managed by ARA Trust Management (Suntec) Limited 

(As Manager of Suntec Real Estate Investment Trust) 

(Company Registration No. 200410976R) 

PROXY FORM 

ANNUAL GENERAL MEETING 

IMPORTANT: 

1. For investors who have used their CPF monies to buy units 

in Suntec Real Estate Investment Trust, this Annual Report 

is forwarded to them at the request of their CPF Approved 

Nominees and is sent solely FOR INFORMATION ONLY. 

2. This Proxy Form is not valid for use by CPF investors and 

shall be ineffective for all intents and purposes if used or 

purported to be used by them. 

3. CPF investors who wish to vote should contact their CPF 

Approved Nominees. 

4. pLEASE READ NOTES TO THE PROXY FORM. 

I/We, (Name) (NRIC/Passport No.) 

of 

(Address) 

being a unitholder/unitholders of Suntec Real Estate Investment Trust (“Suntec REIT”), hereby appoint: 

Name N R nrIC/Passport No. proportion of Unitholdings (Note 2) 

no. of Units % 

Address 

and/or (delete as appropriate) 

Name N R nrIC/Passport No. proportion of Unitholdings (Note 2) 

no. of Units % 

Address 

or both of whom failing, the Chairman of the Annual General Meeting (the “Meeting”) as my/our proxy/proxies to attend and vote for 

me/us on my/our behalf at the Meeting of Suntec REIT to be held at Level 3, Rooms 303 to 305, Suntec Singapore International Convention 

& Exhibition Centre, 1 Raffles Boulevard, Suntec City, Singapore 039593 on Friday, 15 April 2011 at 11.00 am and at any adjournment 

thereof. I/We direct my/our proxy/proxies to vote for or against the resolutions to be proposed at the Meeting as indicated hereunder. If 

no specific direction as to voting is given, the proxy/proxies may vote or abstain from voting at his/their discretion, as he/they may on any 

other matter arising at the Meeting, authority herein includes the right to demand or to join in demanding a poll and to vote on a poll. 

(Please indicate your vote “For” or “Against” with a tick [] within the box provided.) 

No. Resolutions relating to: To be used on a show of hands To be used in the event of a poll 

AS ORDINARY BUSINESS 

1 Report of the Trustee, the Statement by the Manager 

and the Audited Financial Statements of Suntec REIT 

for the year ended 31 December 2010 

2 Re-appointment of KPMG LLP as Auditors 

AS SPECIAL BUSINESS 

3 Authority given to the Manager for the issue of 

new units and/or convertible securities 

OTHER BUSINESS 

4 To transact any other business which may 

properly be brought forward 

For* Against* No. of Votes No. of Votes 

For** Against** 

* If you wish to exercise all your votes “For” or “Against”, please tick () within the box provided. 

** If you wish to exercise all your votes “For” or “Against”, please tick () within the box provided. Alternatively, please indicate the number 

of votes as appropriate. 

Dated this day of 2011 

Total number of Units held (Note 3) 

Signature of Unitholder(s)/and, Common Seal of Corporate Unitholder

3 rd fold this flap for sealing 

Affix 

Postage 

Stamp 


(as manager of Suntec Real Estate Investment Trust) 

c/o 

Unit Registrar 

Boardroom Corporate & Advisory Services Pte. Ltd., 

50 Raffles Place #32-01, Singapore Land Tower 


2 nd fold here 

IMPORTANT: PLEASE READ THE NOTES TO PROXY FORM BELOW 

Notes To Proxy Form 

1. a unitholder of Suntec REIT (“Unitholder”) entitled to attend and vote at the Meeting is entitled to appoint one or two proxies to attend and vote in his stead. 

A proxy need not be a Unitholder. 

2. Where a Unitholder appoints more than one proxy, the appointments shall be invalid unless he specifies the proportion of his holding (expressed as a 

percentage of the whole) to be represented by each proxy. 

3. a Unitholder should insert the total number of Units held. If the Unitholder has Units entered against his name in the Depository Register maintained by 

the Central Depository (Pte) Limited (“CDP”), he should insert that number of Units. If the Unitholder has Units registered in his name in the Register of 

Unitholders of Suntec REIT, he should insert that number of Units. If the Unitholder has Units entered against his name in the said Depository Register and 

registered in his name in the Register of Unitholders, he should insert the aggregate number of Units. If no number is inserted, this form of proxy will be 

deemed to relate to all the Units held by the Unitholder. 

4. the instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where the instrument 

appointing a proxy or proxies is executed by a corporation, it must be executed either under its common seal or under the hand of its attorney or a duly 

authorised officer. 

5. Where an instrument appointing a proxy is signed on behalf of the appointor by an attorney, the power of attorney or a duly certified copy thereof must 

(failing previous registration with the Manager) be lodged with the instrument of proxy; failing which the instrument may be treated as invalid. 

6. the Manager and/or the Unit Registrar shall be entitled to reject a Proxy Form which is incomplete, improperly completed or illegible or where the true 

intentions of the appointor are not ascertainable from the instructions of the appointor specified on the Proxy Form. In addition, in the case of Units entered 

in the Depository Register, the Manager and/or the Unit Registrar may reject a Proxy Form if the Unitholder, being the appointor, is not shown to have Units 

entered against his name in the Depository Register as at 48 hours before the time appointed for holding the Meeting, as certified by CDP to the Manager. 

1 st fold here 

7. Completion and return of this instrument appointing a proxy or proxies shall not preclude a member from attending and voting at the meeting. 

Any appointment of a proxy or proxies shall be deemed to be revoked if a member attends the meeting in person, and in such event, the Manager 

reserves the right to refuse to admit any person or persons appointed under this instrument of proxy, to the meeting. 

8. the instrument appointing a proxy or proxies must be deposited at the Unit Registrar’s office at Boardroom Corporate & Advisory Services Pte. Ltd., 

50 Raffles Place #32-01, Singapore Land Tower, Singapore 048623, not less than 48 hours before the time set for the Meeting. 

9. at any meeting, a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is (before or on the declaration of 

the result of the show of hands) demanded by the Chairman or by five or more Unitholders present in person or by proxy, or holding or representing 

one-tenth in value of the Units represented at the meeting. Unless a poll is so demanded, a declaration by the Chairman that such a resolution has been 

carried or carried unanimously or by a particular majority or lost shall be conclusive evidence of the fact without proof of the number or proportion 

of the votes recorded in favour of or against such resolution. 

10. on a show of hands, every Unitholder who (being an individual) is present in person or by proxy or (being a corporation) is present by one of its officers 

as its proxy shall have one vote. On a poll, every Unitholder who is present in person or by proxy shall have one vote for every Unit of which he is the 

Unitholder. A person entitled to more than one vote need not use all his votes or cast them the same way. 

11. All Unitholders will be bound by the outcome of the Meeting regardless of whether they have attended or voted at the Meeting.


6 Temasek Boulevard, #16-02 Suntec Tower Four, Singapore 038986 

Tel: (65) 6835 9232 Fax: (65) 6835 9672 

www.suntecreit.com

Suntec REIT Annual Report for FY 2010

Create successful ePaper yourself

Delete template?

Save as template?