not vested
Suntec REIT: Softer retail rents but office rents recovered
Suntec REIT reported an in-line set of 3Q16 results.
Gross revenue fell 4.3% YoY to S$82.4m, but DPU rose 0.5% YoY to 2.535 S cents.
Suntec REIT continued its proactive approach to manage its lease expiry profile during the quarter.
Management successfully brought down its lease expiries for its office and retail portfolio to 0.4% and 2.4% (as percentage of NLA) for the remainder of FY16, respectively.
Encouragingly, office leases signed in 3Q16 came in at an average rent of S$8.78 psf/month, which was an increase of 2.3% on a QoQ basis.
However, retail rents continued to come under pressure.
In terms of occupancy rates, Suntec REIT’s office and retail portfolio stood at 99.4% (+0.5 ppt QoQ) and 97.3% (-0.4 ppt QoQ), respectively.
We fine-tune our assumptions after incorporating this set of results in our model, and lower our fair value estimate slightly from S$1.54 to S$1.53.
Source: OCBC