Suntec REIT

Re: Suntec REIT

Postby winston » Fri Jun 05, 2015 10:15 am

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Share Price Beaten, Value Deepens; Upgrade To BUY

We believe the market has overdiscounted concerns over the Suntec City Mall enhancement.

The prospects of strong rental reversions in the next leasing cycle remain intact due to its relatively low passing rents of S$12.15 psf pm on the back of its better location compared with many suburban malls that have passing rents of over S$15 psf pm.

Management continues to guide for positive office portfolio performance in 2015.

Analysis of its P/B multiple vs peers’ implies an unwarranted trading discount of 16%.

Upgrade to BUY with an unchanged target of S$2.08.

Source: UOBKH

http://research.uobkayhian.com/content_ ... 17aa72399e
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Re: Suntec REIT

Postby behappyalways » Tue Jun 30, 2015 12:35 pm

Suntec REIT divests Park Mall for $411.8m
http://sbr.com.sg/commercial-property/n ... mall-4118m
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Re: Suntec REIT

Postby winston » Wed Jul 01, 2015 10:22 am

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Suntec REIT (SUN SP): Sells Park Mall for redevelopment; HOLD TP SGD1.89

Sells Park Mall for redevelopment by a 35%/35%/30% JV, with Suntec REIT owning 30%.
Proceeds for debt repayment. We estimate FY16 DPU impact of -4.7%, though management guides that it may use proceeds to mitigate DPU dip.
Maintain HOLD for lack of near-term catalysts & SGD1.89 DDM TP (COE 7.7%, TG 2.0%)

Source: Kim Eng
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Re: Suntec REIT

Postby behappyalways » Fri Jul 03, 2015 4:44 pm

Suntec REIT faces $20m income vacuum after Park Mall divestment
http://sbr.com.sg/commercial-property/n ... divestment
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Re: Suntec REIT

Postby winston » Fri Jul 24, 2015 10:45 am

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Suntec REIT: Cloudy earnings visibility

Suntec REIT reported a 19.6% YoY increase in its 2Q15 gross revenue to S$81.4m, underpinned by the opening of Phase 2 of Suntec City mall in Jun 2014 and better performance from Suntec Singapore.

DPU grew 10.3% YoY to 2.50 S cents, although 0.239 S cents/unit of this was contributed by distribution from capital.

Results were within our expectations.

Leasing momentum at Phase 3 of Suntec City mall remained muted (committed occupancy of 86%).

We expect rental pressures to remain for both its retail and office portfolio, thus further clouding the earnings visibility for 2016.

Regarding Suntec REIT’s proposed divestment of Park Mall for S$411.8m, (expected to be completed by 3Q15), we expect a dip in distribution from operations, but management highlighted that it is open to making capital distributions from the sales proceeds to mitigate this.

We maintain our forecasts,SELL rating and S$1.50 fair value estimate on Suntec REIT.

Source: OCBC
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Re: Suntec REIT

Postby winston » Fri Jul 24, 2015 1:39 pm

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Suntec REIT: HOLD; Last Traded Price: S$1.715; SUN SP
Price Target : S$1.76 (2% upside)
Patience is key

• 2Q15 DPU was 2.5Scts (+10% y-o-y)
• Suntec AEI is progressing slowly amid retail headwinds
• Near term earnings weakness likely to be supported by distributions from capital
• Maintain HOLD, TP S$1.76

Highlights:
Results slightly below. Suntec REIT reported 2Q15 revenue of S$81m (+20% y-o-y) and NPI of S$57m (+25%), largely due to higher income contribution from Phase 2 of AEI works at Suntec Mall, which opened in June 2014.

Distributable income rose 11% y-o-y to S$63m, with operating income of S $57m (+10%) supported by S$6m of capital distributions (+20% y-o-y). This translated to 2Q15 DPU of 2.50Scts (+10%). Excluding distributions from capital, underlying DPU of 2.3Scts would have been 9% higher y-o-y.

Outlook:
Suntec City retail will take some time to stabilise. Phase 3 of AEI works, which achieved TOP in Jan-15, has achieved 86%
commitment rate, bringing total committed occupancy for the entire Suntec City retail component to 95.3%.

The redevelopment is likely to miss the Manager’s internal 10% IRR target rent of S$12.59 as Singapore’s retail outlok has deteriorated in the past two years.

The Manager has reported stabilised passing rents of S$12.12 psf/mth, which is a fairly commendable result, given the mall’s large
footprint (970k sqft).

Updates on the Park Mall divestment. On 30 June, the Manager announced the divestment of Park Mall for S$411.8m, implying S$1,541 psf and NPI yield of 4.6%. Suntec REIT will subsequently take a 30% stake in a JV Co with Singhaiyi Group (35%) and Haiyi Group (35%) to completely redevelop the property, which will feature two office towers accounting for c.45% of total NLA each and a retail podium, which will take up the remaining 10%.

Development is expected to take four years, and will likely only begin in 2H16, as the Manager can only begin serving its six months notice to tenants from Jan-16 onwards.

The Manager intends to use proceeds from the divestment to pay down debt, invest in the JV Co (S$115m), as well as to support distributions during construction in order to ensure stable dividends for unitholders.

Valuation:

We have a HOLD recommendation for Suntec REIT, with a DCF-backed TP of S$1.76. We have forecasted a 4% decline in DPU from FY16 onwards to account for the divestment of Park Mall.

In our previous report, we lowered our rental assumptions for Phase 3 of AEI and adjusted our AUD assumptions.

At current price, Suntec REIT offers investors dividend yield of 5.5%-5.8% for FY15-FY16, which is fairly attractive, in our view. However as total returns are still <10%, we maintain our HOLD call.

Key Risks:

Interest rate risk As Suntec will begin to earn rental income in Australian dollars from 2016 onwards, it is vulnerable to exchange rate volatility,and any depreciation of the Australian dollar to the Singapore dollar in the future would negatively impact expected distribution income.

Slower ramp up of Suntec AEI. Although the AEI works at Suntec City retail has been completed, Phase 3 in particular is taking a longer than expected time to fill up occupancies amid retail headwinds. Slower ramp up of operations for the mall could present downside risks to our earnings estimates.

Source: DBS
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Re: Suntec REIT

Postby winston » Mon Jul 27, 2015 10:40 am

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Suntec REIT Results Review (SUN SP): Facing Short-Term Headwinds (NEUTRAL)

Suntec REIT’s 2Q/6M15 DPU grew 10.3%/5.2% YoY, accounting for 47.9% of our full-year estimate.

Maintain NEUTRAL with a lower DDM-derived TP of SGD1.75, implying a 7.8% total return.

The entire remaking of Suntec City achieved a 93.6% committed occupancy to date but committed passing rent was at the low end of our estimates at only SGD12.12 psf/month.

Office portfolio occupancy also dropped to 99.0% from 99.6%.

Source: RHB
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Re: Suntec REIT

Postby behappyalways » Mon Jul 27, 2015 2:32 pm

Suntec City's leasing woes are far from over, analysts warn
http://sbr.com.sg/commercial-property/n ... lysts-warn
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Re: Suntec REIT

Postby behappyalways » Fri Oct 09, 2015 9:55 am

Tenants bargain for lower rents at newly-renovated Suntec City Mall
http://sbr.com.sg/retail/news/tenants-b ... -city-mall
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Re: Suntec REIT

Postby winston » Fri Oct 23, 2015 6:50 pm

Suntec REIT (SUN SP): Softer operating performance; SELL TP SGD1.33

3Q15 DPU of 2.522 SGD cts in line. Capital distribution lends strength to operations. 9M15 at 77.4% of full-year estimates.

Guided down on passing rents at Suntec retail. Occupancy at MBFC offices weakened. However, debt metrics remained healthy.

Maintain SELL and SGD1.33 TP (FY16E target yield of 7.25%). Less attractive yields than office peers.

Source: Kim Eng

https://factsetpdf.maybank-ke.com/PDF/C ... 0ed5d9.pdf
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