- Suntec REIT (SGX:T82U) is trading at 42% discount to book value of S$2.1. We reiterate our BUY recommendation with an unchanged target price of S$1.47 and FY24-25e DPU forecasts of S$0.0730 to S$0.0789.
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- Revenue were supported by a rental reversion of 12.3% for Singapore office spaces and a 21.8% rental reversion for Suntec City Mall. Suntec Convention has fully resumed its operations, with revenue surpassing pre-COVID levels by 3.9%.
- DPU decreased by 19.7% y-o-y but exceeded our estimates by 6.7%, primarily due to higher maintenance fund contribution and weaker Australia performance, ending the full year at 7.135 cents. See Suntec REIT's dividend dates.
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- We anticipate strong retail rental reversion to be persistent in FY24 as international visitors gradually return, and the office segment continues to achieve stable reversion in the mid-single digits.
The Positives
Resilient balance sheet upon completion of divestment goal.
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