SUNTEC REIT
SUNTEC REAL ESTATE INV TRUST
T82U.SI
Suntec REIT: Acquisition and leaseback of strata floors in Suntec Tower Two
- Suntec REIT announced that it had entered into a sale and purchase agreement with Maybank Kim Eng Properties Pte Ltd to purchase and leaseback three floors of strata office space at Suntec Tower Two.
- The purchase consideration amounts to S$101.6m (total acquisition outlay estimated to be S$105.7m), and is expected to generate a NPI yield of ~3.9%, which is higher than the NPI yield of 3.2% achieved in 2014 for Suntec REIT’s portfolio.
- The estimated transaction price of ~S$2,605 psf NLA appears fair, in our view.
- A day prior to this announcement, Suntec REIT also said that it had launched and priced S$105m 2.83% notes due 2018 under its US$1.5b Euro Medium Term Note Programme. We believe the proceeds of this issuance would be used to finance the above mentioned acquisition.
- Maintain HOLD and S$1.50 fair value estimate on the REIT.
Wong Teck Ching Andy
OCBC Securities
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http://www.ocbcresearch.com/
2015-11-05
OCBC Securities
SGX Stock
Analyst Report
1.50
Same
1.50
