Maybank Kim Eng upgraded Suntec Real Estate Investment Trust to ‘buy’ from ‘hold’ and raised its target price to $1.66 from $1.42, citing strong occupancy at its office assets and good progress in the upgrading works for its shopping mall and convention centre.
Units of Suntec REIT were up 0.3% at $1.535, and have surged 42.9% since the start of the year, compared
to the FTSE ST Real Estate Investment Trust’s 32% rise.
Suntec is one of the few Singapore-listed REITs that offers yields of more than 6% but are trading at discounts to
book value, Maybank said.
It also noted that against a backdrop of an office supply glut and high vacancy rates, Suntec has secured 100%
occupancy for its office assets in Suntec and Park Mall, One Raffles Quay and 99.5% for Marina Bay Financial Centre Tower 1.
“With all its assets and income contribution from Singapore, we believe investors will continue to favour Suntec in the
absence of forex risk, highly-liquid S-REIT counters and investable alternatives,” said Maybank in a note.
The brokerage is confident that Suntec REIT will be able to pay out distribution per unit of at least 2.15 cents
for the third quarter and at least 9% cents for the full year.
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