Suntec REIT - RHB Invest 2023-01-10: Slowing Growth & Rising Rates; Downgrade To NEUTRAL

Suntec REIT - Slowing Growth & Rising Rates; Downgrade To NEUTRAL

Published:
SUNTEC REAL ESTATE INV TRUST (SGX:T82U) | SGinvestors.ioSUNTEC REAL ESTATE INV TRUST (SGX:T82U)
  • We expect Suntec REIT (SGX:T82U)’s office portfolio to be impacted by the technology sector’s slowdown – moderating rent growth with a slight uptick in vacancy. This, coupled with the sharp interest cost impact from a spike in rates, should weigh on Suntec REIT's share price.
  • - Read this at SGinvestors.io -

Office demand drivers slowing down.

  • The technology, media and telecommunications (TMT) sector is the largest occupier of Suntec City Office Towers (~38% of FY21 rents) and has also been the key source of new leasing demand in recent years. Suntec City Office Towers is the largest asset in Suntec REIT's portfolio (~30% of income) and currently has a high committed occupancy of 99.6% and rent reversion (YTD) of 3.3% as at 3Q. For FY23F, ~27% of leases are due for renewal and we expect committed occupancy could fall to ~98% levels with flattish rent reversions.
  • - Read this at SGinvestors.io -
  • Suntec City Mall’s performance should remain relatively steady while the convention segment is expected to rebound strongly in FY23.

Divestments likely in FY23.

  • Read more at SGinvestors.io.





Vijay Natarajan RHB Securities Research | https://www.rhbgroup.com/ 2023-01-10



Read also RHB's most recent report:
2024-01-25 Suntec REIT - Operational Strength To Continue; Upgrade To BUY.

Previous report by RHB:
2023-10-24 Suntec REIT - Lacking Catalysts.

Price targets by 5 other brokers at Suntec REIT Target Prices.

Listing of research reports at Suntec REIT Analyst Reports.

Relevant links:
Suntec REIT Share Price History,
Suntec REIT Announcements,
Suntec REIT Dividends & Corporate Actions,
Suntec REIT News Articles





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