- Suntec REIT’s 3Q24 financials were in line. Key positives for 3Q include continued strong double-digit rent reversion for its office and retail portfolios and higher Suntec City mall occupancy.
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- Financing costs are expected to be higher in FY25 due to the expiration of hedges. Valuation is reasonable at 0.6x P/BV, with divestments being the key catalyst.
Strong double-digit rent reversions from office and retail portfolios.
- Rent reversion (3Q24) for Singapore office portfolio stood at +12.9% (2Q: 7.9%), marking 25 consecutive quarters of positive reversion. Guidance remains positive in the mid-to high-single digit for FY25.
- Suntec City Mall’s rent reversions remain robust at +21.2% with occupancy improving to 98.4%. Retail rent reversion guidance for FY25 also remains positive at 10-15%.
Divestments mainly from Suntec City’s strata office
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- Gearing is stable at 42.3% while some valuation losses are expected for its Australian assets – a higher value for its Singapore and UK assets will offset this, in our view, with gearing at manageable levels (~42%) at the end of the year.
UK assets on track to achieve full occupancy
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