Suntec REIT - RHB Invest 2019-04-25: Flattish 1Q19 DPU of SGD0.0243

SUNTEC REAL ESTATE INV TRUST (SGX:T82U) | SGinvestors.io SUNTEC REAL ESTATE INV TRUST (SGX:T82U)

Suntec REIT - Flattish 1Q19 DPU of SGD0.0243

  • SUNTEC REIT (SGX:T82U) posted a flattish 1Q19 DPU of SGD0.0243, in line with our expectations and accounting 24% of our full-year forecast.
  • Gross revenue for the quarter declined 1.1% y-o-y due to lower revenue from Suntec Singapore on the back of fewer major convention events and weaker AUD.
  • NPI declined by a larger 7.6% y-o-y mainly attributable to the sinking fund contribution for Suntec City Office upgrading works.



COMMENTS


  • Key positive has been the 100% pre-commitment of office space at 9 Penang Road (30% stake). UBS has signed on a relatively long-lease to occupy all eight floors of office space amounting to 381,000sqft.
  • We understand that yield on cost for the redevelopment is expected to be c.4%, based on rentals signed. The pre-leasing for 15,000sqft of retail NLA is ongoing. The project is 81% complete and on track for completion by year-end with targeted occupation by 2H20.
  • For office portfolio, overall occupancy improved 0.2ppts q-o-q to 98.9%. Average rents secured during the quarter were also 2.5% higher q-o-q, in line with improving office dynamics in the Singapore market.
  • Retail portfolio occupancy however dipped 1.7ppts q-o-q to 97.4% mainly on lower occupancy at Suntec City mall. Shopper traffic (+3.3% y-o-y) and tenant sales psf (+1.3% y-o-y) continued to trend higher, which is positive.
  • NEUTRAL, Target Price: SGD1.90.





Singapore Research RHB Securities Research | https://www.rhbinvest.com.sg/ 2019-04-25
SGX Stock Analyst Report NEUTRAL MAINTAIN NEUTRAL 1.900 SAME 1.900



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