Suntec Reit    Last:1.45    +0.02

Suntec REIT

Trust Management (Suntec) Limited

Press Release

Manager of

Suntec REIT forms JV to acquire 50% interest in the iconic
Southgate Complex, Melbourne
Singapore, 5 August 2016 ? ARA Trust Management (Suntec) Limited, the manager of Suntec Real
Estate Investment Trust (?Suntec REIT?, and the ?Manager?), is pleased to announce that Suntec
REIT, through Southgate Trust, in which it holds a 50% indirect interest, has entered into an
agreement to acquire 50% interest in the iconic Southgate Complex (the ?Property?) from Dexus
Southgate Trust (?Dexus?) for a consideration of A$289 million.
In addition, separate put and call option agreements have been entered into with Dexus where the
remaining 50% interest in Southgate Complex will be acquired for the same purchase consideration of
A$289 million.
Located alongside the Yarra River in the Southbank arts and leisure precinct of Melbourne, Australia,
Southgate Complex is a freehold, landmark waterfront integrated development comprising two A-
Grade office towers, a 3-storey retail podium and a car park with 1,026 lots. The office and retail
components constitute approximately 87% and 13% of the total net lettable area (?NLA?) respectively.
Surrounded by business, residential, recreational and retail amenities, the Property is directly
opposite Flinders Street train station and within close proximity to Melbourne?s city rail loop.
Commenting on Suntec REIT?s second acquisition in Australia, Mr. Yeo See Kiat, Chief Executive
Officer of the Manager, said, ?We are pleased to acquire the iconic Southgate Complex which is a
strategic fit with Suntec REIT?s portfolio of quality assets and in line with our strategy to expand our
footprint in Asia Pacific. The acquisition augments Suntec REIT?s presence in Australia.?
The Property has a total NLA of 820,324 sq ft and is leased to well-established tenants such as IBM,
The Herald and Weekly Times, Commonwealth of Australia, APT, Dairy Australia, City Road
Melbourne and LinkedIn. The committed occupancy was 88% as at 5 August 2016 with a weighted
lease expiry of approximately 4.6 years. The annual rental escalations for the office leases are
predominantly between 3% to 4%.
5 August 2016

 

Suntec going into Australian market! 

i think they aiming to be a big aussie player soon..

Backed by li ka shing, he knows how to the make moves...

 

Singapore&rsquo s ARA eyes Suntec REIT to close Southgate deal

• The Australian
• 12:00AM July 28, 2016
• •  
•  

  

  Commercial property reporter

  Sydney

   

  

The group, which has already secured the backing of a major Asian wealth fund, thought to be the Korean Investment Corporation, on the Melbourne deal, is now likely to bring in Singapore vehicle Suntec REIT.

The complex, opposite Flinders Street Station at the gateway to Melbourne&rsquo s arts precinct in the heart of Southbank, includes the HWT Centre and IBM Tower.

Suntec is best known in Australia for buying 177-199 Pacific Highway, North Sydney, a 31-storey A-grade tower housing Leighton Holdings&rsquo new headquarters, in late 2013 for $413.19m.

That tower was completed earlier this year. The head of the Singaporean trust in 2014 said it was looking to invest in prime Sydney and Melbourne buildings. Suntec chief executive Yeo See Kiat said the trust would look for opportunities that suited its focus on prime stock with strong lease covenants.

Suntec REIT declined to comment yesterday but also holds an extensive portfolio of retail and ­ office properties in Singapore.

Dexus, which also declined to comment, held the Melbourne complex at $482.2m, reflecting a market capitalisation rate of 6.41 per cent, but the ARA deal is at a sharper level. The office towers comprise two A-grade buildings spanning about 66,455sq m and the overall complex, including retail, spans about 76,600sq m.

ARA has been separately targeting the purchase of 80 Grenfell Street, an Adelaide office tower that US private equity house Blackstone bought as part of a larger complex last year. But the Melbourne deal will probably be done first.

Dexus is also selling the Finlay Crisp Centre, a three-building campus-style office complex in Canberra tipped to sell for more than $85m. JLL&rsquo s Michael Heather and Rob Sewell are marketing the asset. The property comprising Customs House, Allara House and Nara Centre spans a net leaseable area of 29,982sq m.

Demand is high in Canberra. Brookfield has secured a buyer &mdash Sydney-based adviser Sumner Capital, potentially backed by Prime Super &mdash for a Canberra Department of Infrastructure-occupied building for more than $80m.

Dexus is also close to selling one of the Adelaide CBD&rsquo s biggest office towers, the 12-level building at 108 North Terrace to a local group for about $85m.

The asset, which has tenants including Hewlett Packard, Optus and the SA government, spans a net lettable area of more than 20,000sq m and was marketed by Colliers International.

In Brisbane, Brookfield and the Dexus Wholesale Property Fund are selling 324 Queen Street in the CBD with hopes of about $150m. The 26-level property on the corner of Creek Street is being marketed via Knight Frank and JLL and is into a second round of bids.

 

Suntec got a pretty sweet deal for this 177 Pacific Highway Huge office building they are constructing which should be ready really soon... 

- The sale to Suntec REIT, Singapore' s second largest listed REIT by assets under management, marks its entry into Australia where it joins its peer, the Singapore-based KREIT, managed by the Keppel Group. 

- Suntec REIT has guided that on a proforma basis, the transaction would lead to a c.4.7% improvement in DPU (based on FY12 numbers). Based on this, we have worked out (see next page) that this would be premised on implied net effective rents of around A$687psm per year. This is above the higher-end of current net effective rents of A$454psm estimated by Savills, given the lack of new Grade A supply in the North Sydney area. Assuming no change in asset valuation of Suntec REIT& rsquo s current properties, its leverage would climb from 38.6% to c.42% after the drawdown of all the debt required to finance this transaction. 

FIRST CROSS‐ BORDER ACQUISITION A STRATEGIC FIT TO EXISTING PORTOFLIO PURCHASE CONSIDERATION COUPON PAYMENT ASSET OVERVIEW LEASE COMMITMENT 

 A$413.19 million for a 100% interest in 177‐ 199 Pacific Highway a freehold land and property to be developed 

 Leighton Properties to pay a coupon of 6.32% p.a. during construction phase 

 31‐ storey, state‐ of‐ the‐ art commercial office tower with a NLA of approx. 423,915 sq ft 

 Designed by award winning architecture firm Bates Smart 

 5‐ star NABERS Energy rating and a 5‐ star Green Star as built rating 

 100% pre‐ committed o Corporate Headquarters of Leighton Group who will take a    head lease of 76% of the NLA o Leighton to provide a rental guarantee for 4 years for any vacant space upon completion 

   

KEY INVESTMENT MERITS    

Development and cost overrun risks to be borne by Leighton 

 Coupon of 6.32% p.a. provide positive carry during construction 

 DPU accretive upon completion 

 Initial NPI yield of 6.9% in Year 1 upon completion 

 

 

Suntec REIT (SUN SP): HOLD  Market Cap: US$3,267m | Average Daily Value: US$6.05m Last Traded Price: S$1.745 Price Target: S$1.58 (Downside 9.2%) (Prev S$1.58)  Analyst Derek Tan  +65 6682 3716  [email protected] Mervin Song  +65 6682 3715  [email protected] Singapore Research Team     Riding through rising headwinds 1Q16 results in line Potential downside to rental reversions at phase 1 of Suntec City Mall Contribution from 177 Pacific highway to drive medium-term earnings Hemmed in by double headwinds  In the year ahead, the REIT&rsquo s earnings will be driven by new contribution from recently completed Suntec City Mall redevelopment. Due to headwinds in the retail sector however, we believe that earnings upside is capped as the mall&rsquo s rents have underperformed the Manager&rsquo s initial target. In addition, there could be downside risk for the REIT&rsquo s office assets, which are expected to see some volatility in rents and occupancies when new office supply enters the CBD from 2016 onwards. As such, we maintain our HOLD call, TP of S$1.58.      Weak retail outlook to cap upside from AEI     Completed in Jun-13, assuming a typical 3-year lease cycle, tenants at phase 1 of the mall will be entering their first reversionary cycle in 2016. We understand that rental reversion trends have remained mix, given the weak operating climate. The Manager is looking to potentially tweak the tenant mix going forward.      Secure income contribution from Australian asset from FY16 onwards.  Suntec REIT is expected to complete the acquisition of 177 Pacific Highway in 2H16 which will add geographic diversification to its portfolio. Upon completion of the office property in early 2016, Leighton Holdings will take up 76% of the NLA for an approximate lease period of 10 years and thus lengthen the REIT' s lease profile and add income visibility.         Valuation:  Maintain HOLD, TP S$1.58  We have a HOLD recommendation on Suntec REIT, with a TP of S$1.58. Dividend yield of c.5.8-6.0% over FY16-17F is fairly attractive, but total returns to our TP is insufficient at < 10%.      Key Risks to Our View:  Upside risk stemming from distributions from capital     The Manager has indicated a willingness to use proceeds to mitigate the decline in DPU after the divestment of Park Mall. Additional capital distributions to support dividend to shareholders will present upside to our estimates.

 

 

Ha..luckily,  now switch to positive mode. Can recycle $$...^_^

spore1      ( Date: 01-Feb-2016 23:31) Posted: tdy price dropped 5 cents more then the declared dividend. This is rather negative. It may cont to head lower. http://sporeshare.blog   spot.sg/2016/02/suntec-reit.html

 

tdy price dropped 5 cents more then the declared dividend. This is rather negative. It may cont to head lower.

http://sporeshare.blog   spot.sg/2016/02/suntec-reit.html

 

Decent performance in 2Q15 driven by increase in revenue from the completion of Suntec City Mall Phase 2. Moving forward, 2015 should be a stable year as higher revenue will offset a potential increase in interest expenses as a result of the pending interest rate hike. Overall, the recent drop in stock prices presents some value as well as give investors a dividend yield of 5.5%.

http://www.investark.com/Analysis68suntecreit2q15.html

 

 

Suntec Reit divests Park Mall for S$411.8 million

JUN 29, 2015  8:45 PM

http://btd.sg/1eUXUgU

 

Over valued n interest rate risk.

marubozu1688      ( Date: 13-Jun-2015 10:03) Posted: Fundamental and Technical Analysis for Suntec REIT. http://mystocksinvesting.com/singapore-stocks/suntec-reit/suntec-reit-fundamental-and-technical-analysis/

 

Fundamental and Technical Analysis for Suntec REIT.

http://mystocksinvesting.com/singapore-stocks/suntec-reit/suntec-reit-fundamental-and-technical-analysis/

 

Suntec REIT still not attractive fundamentally after the recent sell down.

http://mystocksinvesting.com/singapore-reits/singapore-reit-selection-using-bubble-charts-pricenav-vs-distribution-yield-vs-gearing-ratio/

 

Suntec REIT worst performer for past 2 weeks. May rebound from the current support.

http://mystocksinvesting.com/singapore-reits/singapore-reits-mini-sell-off-what-is-going-on/

 

recent just last week we see capitalmall, capital comm, face selling and keppel reit too, because rate are gg up ard the world.

now US 10 yr treasury is 2.3% up from 1.9x..i think more selling in reit to follow.

 

This reit has done well for me but i think they are facing a lot of headwinds on the retail front. Do see my qualitaive assessment of this counter after I have attended the AGM.

http://wealthdirections.asia/denied-entry-to-suntec-reit-agm/

 

 

Email from OCBC on 24 Apr

 

Suntec REIT: Flat DPU performance, below expectations
Suntec REIT reported 1Q15 revenue of S$74.5m, an increase of 12.9% YoY. However, DPU was flat at 2.23 S cents and fell short of ours and the street&rsquo s expectations. Although committed occupancy for Suntec City mall&rsquo s Phase 3 AEI improved from 70.5% to 80%, we believe leasing momentum has been sluggish as it is slated to open soon. Rental rates have also come under pressure for this mall. On a positive note, Suntec REIT&rsquo s office segment remains stable, and management is confident of the performance of this segment for the remainder of the year. Given the slow start to FY15, we see the need to pare our FY15 revenue/DPU forecasts by 4.0%/4.9%, and our FY16 revenue/DPU projections by 4.4%/4.9%. Consequently, we lower our DDM-derived fair value estimate from S$1.86 to S$1.72. Maintain HOLD on Suntec REIT. The stock is currently trading at FY15F distribution yield of 5.3%.

 

DYODD.  Phase 3 going to open but 1 out of 5 shops remain empty. Does not bode well at all.

 

 

 

1) Low yield. amongst the WORST in SG reits.

2) Wasted money on ill-timed AEI instead of making an accretive acquisition when property market was favorable.

3) Low price to book suggests dim outlook by investors on this counter' s future.  An ever increasing number of malls in Singapore will cause rental pressure on tenants and draw away shopper traffic.

Will skip this one.

 

 

with strong portfolio to weather interest rate rise in 2015, can add for value in the mid term if share price continues to drop from its 52 w high.

http://investark.com/Analysis26suntec2014.html

 

 

Yield < 5% now.

marubozu1688      ( Date: 14-Dec-2014 11:19) Posted: Yield not attractive for Suntec REIT at current price. http://mystocksinvesting.com/singapore-reits/singapore-reit-fundamental-analysis-comparison-table-14-dec-2014/