Suntec Reit    Last:1.45    +0.01

Suntec REIT

Analysts stay positive on Suntec REIT as 1HFY21 DPU meets expectations

Analysts from CGS-CIMB and UOB Kay Hian remain upbeat on Suntec REIT after it reported 1HFY2021 ended June DPU of 4.154 cents on July 22, in line with their expectations.

UOB Kay Hian has kept its " buy" call for the counter with a higher target price of $1.78, up from $1.72 previously, while CGS-CIMB has kept its " add" call and target price of $1.79 unchanged.

UOB Kay Hian analyst Jonathan Koh' s higher target price reflects the REIT' s acquisition of The Minister Building, an office building in London for GBP353 million ($667.2 million). The building has a committed occupancy of 96.7% with a weighted average lease to expiry for 12.3 years.

The higher target price also takes into account Suntec REIT' s divestment of 78,491 square feet of strata units at Suntec City Office for $197 million, with an exit yield of 3.1% and net gain of $13.9 million. 

Factoring the two DPU-accretive transactions, Koh has raised his FY2022 DPU forecasts by 3.9%.

For the REIT' s 1HFY2021 performance, Koh notes it was predominantly driven by its office portfolio. Looking ahead, he highlights management' s guidance of positive rental reversion for Suntec City Office in 2021. " Revenue from Singapore office should remain stable due to the past 12 consecutive quarters of positive rental reversion," Koh says.

For Suntec City Mall, while negative rental reversion is expected to persist till 1H2022, Koh believes as more employees return to work at offices, shopper traffic and tenant sales should improve.  He points out that Phase 2 (Heightened Alert) has not affected occupancy, which is on track for recovery to 95% by the year-end.

Meanwhile, CGS-CIMB analysts Lock Mun Yee and Eing Kar Mei have kept their DPU forecasts unchanged. " At 5.7% FY2021 dividend yield, we think Suntec REIT' s current share price has factored in much of the near-term earnings drag and we maintain our Add call," they say.

Similar to Koh, the analysts see continued improvement in the performance of the REIT' s office portfolio, noting that occupancies at its Singapore, Australia and UK offices remained at 95%, 94% and 100% respectively as of 1H2021. " With c.80% of its Australian dollar income hedged as at 1H2021 and contributions from the newly-acquired The Minster Building to be felt from 2H2021, we anticipate Suntec REIT' s office contributions to improve going forward," they add.

Units in Suntec REIT closed flat at $1.49 on July 23.

 

 

 

improved results.
long to enjoy.

 

Suntec Reit posts 26.1% rise H1 2021 DPU amid resilient office portfolio

Suntec Reit' s distribution per unit (DPU) rose 26.1 per cent to 4.154 Singapore cents for the six-month period ended June 30, 2021, up from 3.293 cents for the same period a year ago.

DPU for the quarter ended June 30, 2021 was up 37.6 per cent at 2.109 cents, from 1.533 cents a year earlier.

Gross revenue was up 11.6 per cent to S$166.8 million for the six-month period, from S$149.4 million a year ago.

This was due to its resilient office portfolio in Singapore, Australia and the United Kingdom, the Reit manager ARA Trust Management (Suntec) said in a bourse filing on Thursday.

The manager also said contributions from newly acquired assets and completed developments, as well as lower rent assistance for its retail tenants and a stronger Australian dollar boosted its results.

Net property income grew 23.9 per cent on the year to S$112.6 million for the half year, from S$90.9 million.

Distributable income rose 27.3 per cent year on year to S$118.2 million, from S$92.8 million.

The distribution will be paid out on Aug 27, 2021, after books closure on July 30, 2021.

The Reit manager expects revenue of its Singapore office portfolio to be stable due to positive rent reversions and robust occupancy in the mid-90 per cent range.

It said rent reversion at its Suntec City Mall will likely be weak in the next few quarters amid slow mall traffic and tenant sales recovery due to the recent spike in Covid-19 cases, but still expects mall occupancy to remain on track to hit around 95 per cent by the end of the year.

The manager also noted that income contribution for its convention centre business will remain significantly impacted for the year due to weak international business and leisure travel.

For the Australian portfolio, the Reit manager said revenue will likely remain resilient, underpinned by strong occupancy, annual rent escalations and long lease tenures with minimal lease expiries in 2021 and 2022.

In the UK, it expects office revenue to be stable, supported by occupancy and long weighted average lease expiry, although it will still provide rent rebates and deferments to its pandemic-hit retail tenants at Nova Properties.

Units of Suntec Reit closed at S$1.47 on Wednesday, down S$0.01 or 0.7 per cent.

 

 

Short Enjoy... 
Not my pick yet

PhillipTan      ( Date: 16-Jul-2021 17:01) Posted: Long to enjoy My top pick among these three

 

Long to enjoy
My top pick among these three
 

 

RHB stays ' overweight' on S-REITs with Suntec, AIMS APAC and Prime US as top picks

RHB Group Research analyst Vijay Natarajan is positive on Singapore REITs (S-REITs), despite the sector underperforming the STI so far this year.

" S-REITs are up 3% YTD vs the STI' s 10%, but we expect the recovery pace to pick up in 2H2021 &ndash on a stronger economic rebound and positive shift in Singapore' s policy stance," he affirms in a July 16 report.

Underpinning the sanguine outlook is an anticipated acceleration in economic recovery in the 2H2021, driven by vaccinations. With Singapore on track to meet its target to vaccinate two-thirs of the population by August 9, Natarajan anticipates further easing of Covid-19 measures that will be positive for REITs.

In addition, he points to recent comments by Ravin Menon, managing director of the Monetary Authority of Singapore, stating that risks for Singapore' s GDP to exceed the official forecast of 4-6% is are tilted towards the upside.

Natarajan views that the valuation gap between small, mid-cap REITs as well as large-cap REITs will continue to narrow in the near team. He notes that y-t-d, small, mid-cap REITs have, on average, outperformed +10%, compared to large-cap REITs' +2%.

He foresees 2021 becoming a record year for REIT acquisitions, highlighting that the sector has seen $7 billion in acquisitions y-t-d. " With REITs' expanding global mandate, the need for diversification, and ultra-low interest rates providing tailwinds, we expect the strong acquisition momentum to continue in 2H2021," he says.

He also anticipates a pick-up in primary market activity in 2H2021, mainly driven by overseas REIT listings - four are currently in the pipeline. 

Industrial REITs remain Natarajan' s preferred pick, given their earnings resilience, while hospitality REITs have priced in most of the optimism from vaccine rollouts. " Overall, we recommend investors hold on to a balanced portfolio of industrial REITs for stable yields, and mix of office and retail REITs to ride on near-term growth," he explains.

His top picks are Suntec REIT, AIMS APAC REIT, and Prime US REIT. He has " buy" ratings on all three stocks with target prices of $1.76, $1.70 and US$1.03 respectively.

He views that keys risks for the sectors include the reimposition of strict Covid-19 lockdown  measures, and a faster-than expected rise in interest rates, which would potentially result in a surge in 10-year treasury yields.

As at 4.36pm, units in Suntec REIT, AIMS APAC REIT and Prime US REIT are trading at $1.51,  $1.57, and 86 US cents respectively.

 

 

1.51 seem like a good position to start and wait for this to goes to 1.55 again for another ride as usual... smile

 

OK, good bye. 
Feel free to come  back if you wish in future.
To hold this stock is more for dividend. 

rocketman      ( Date: 13-Jul-2021 11:37) Posted: --- Post Removed by User ---

 

Just as expected, didn' t hit 1.56 today
We shall see again tomorrow

rocketman      ( Date: 12-Jul-2021 11:39) Posted: --- Post Removed by User ---

 

For today or tomorrow, think a bit hard
After being down for so long, I guess people will want to take profits first

 

Gonna Break 1.56....in my humble opinion...

 

DBS - Ideas of the Day

Trending Sectors

Singapore Office REITs

Downtown office vacancies rise as rents stabilise
* We have observed a divergence in office fundamentals with offices in the downtown region seeing lower demand compared to those on the city fringes
- Data from Knight Frank revealed that vacancies at Raffles Place and Marina Bay had inched up in 1Q21
- Conversely, vacancies at Orchard, Shenton Way, and the general city fringes dropped during the same quarter
- Overall, net demand for Grade A CBD office space has turned positive in 1H21 at 68,000 sqft according to Cushman & Wakefield
* Positively, preliminary data from JLL has also shown that rents have stabilised with Grade A CBD office space seeing a 1.2% q-o-q rise in 2Q21
* REITs such as MCT with a larger exposure to offices outside the downtown region could benefit from the decentralisation trend
* Other Office REITs with a large portfolio located in the downtown region including KREIT, Suntec REIT and OUE Commercial REIT could see recoveries play out over a longer period

 

 

I would think 1.75-1.80 is more realistic
2.00 would be really difficult to achieve, at least not in the next one year imo

rocketman      ( Date: 02-Jul-2021 10:45) Posted: u mean like SPH from $1 to $2 almost..  Panda8      ( Date: 01-Jul-2021 12:24) Posted: Cheong all the way to $2!

 

u mean like SPH from $1 to $2 almost.. 

Panda8      ( Date: 01-Jul-2021 12:24) Posted: Cheong all the way to $2!

 

Analysts positive on Suntec Reit' s active portfolio management

Analysts are positive on Suntec Reit' s active management of its portfolio as it will likely add to its net asset value per unit and distribution per unit (DPU).

The real estate investment trust' s (Reit) manager announced on Tuesday it was divesting a portfolio of strata units at Suntec City Office for S$197 million and acquiring a Grade-A office building in London for £ 353 million (S$667.2 million).

The move, together with the recent sale of its 9 Penang Road property, is part of the Reit' s plan for active portfolio management to enhance unitholders' value, the Reit' s manager said.

RHB Bank said that this was " a positive move, and reaffirms (Suntec Reit' s) value-unlocking strategy" . In a report on Thursday, it raised its target price on the Reit to S$1.76 from S$1.72, and maintained its " buy" call.

The research team said the key benefit of Suntec Reit' s new London property, the Minster Building, is its long weighted lease expiry, which highlights the long-term commitments of its tenants and " offers investors comfort in current market conditions" .

It also noted that 75 per cent of the leases at Minster Building will likely be reviewed equal or higher in the near term, which could provide some upside for the Reit.

Furthermore, RHB noted that the Reit was undervalued and trading at around a 30 per cent discount to its book value, amid the continued positive outlook on the office sector post-pandemic.

CGS-CIMB on Wednesday also raised its target price on the Reit to S$1.79 from S$1.76, while maintaining its " add" call.

The research team had raised its DPU estimates for Suntec Reit by 1.3 per cent in FY2021, 6.1 per cent in FY2022, and 6 per cent in FY2023 to account for the divestments and acquisition.

Both research teams noted that the Reit' s manager may plan to undertake more capital management strategies, including divestments and further perpetual securities issuance.

This includes potential divestment opportunities for its Australian assets, which could further lower the Reit' s gearing, RHB said. Currently, its gearing would have likely declined to 43.8 per cent from 44.3 per cent as at December 2020 due to its recent divestments.

Units of Suntec Reit were trading at S$1.48 as at the midday break on Thursday, up S$0.02 or 1.4 per cent.

 

 

Cheong all the way to $2! 

 

1.49 now good start for 2H

 

1.5 n above very soon in my humble opinion...

 

it should go above 1.5 but cant reach 1.6 unless some big announcement.