Suntec REIT 3Q24 Business Update - DBS Research 2024-10-25: Suntec City Continues To Lead The Charge

• 3Q24 Suntec REIT's DPU of 1.58 cents is 3.4% higher q-o-q; driven by higher occupancies and rental rates.
• Key positives:
  1. continued double-digit positive rental reversions across portfolio,
  2. - Read this at SGinvestors.io -
  3. Australian office portfolio also reported healthy increase in occupancy rates,
  4. core earnings (excluding capital top ups) continue to trend upwards.
• What we are watching out for:
  1. overhang from their high gearing,
  2. overall borrowing costs as more interest rate swaps are due to expire in the near-term.

What has happened?

• Suntec REIT (SGX:T82U) reported improvements in revenue and NPI for 3Q24, driven by higher occupancy rates and rents. Notably, the Australian office portfolio saw a 1.5 ppt improvement in occupancy, while Suntec City Mall’s occupancy surged by 2.8 ppt to 98.4%. As a result, Suntec REIT's DPU for the quarter rose 3.2% q-o-q to 1.58 cents.
• - Read this at SGinvestors.io -
• Both the office and retail portfolios delivered strong double-digit positive rental reversions in 3Q24, with Singapore's office portfolio reporting +12.9%, led by Suntec City Office, and the retail portfolio was driven by Suntec City Mall recording an impressive +21.2%.
• On the capital management side, while gearing remained stable at 42.3%, overall borrowing costs inched up by 4 bps q-o-q due to the expiry of interest rate swaps, despite the easing of interest rates.

Our views.

• Read more at SGinvestors.io.

Dale LAI DBS Group Research | Derek TAN DBS Group Research | https://www.dbs.com/insightsdirect/ 2024-10-25 SGinvestors.io

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