- FY25 Suntec REIT's DPU surged 13.6% y-o-y to S$7.035c, underpinned by 12.8% y-o-y savings in financing cost, resilient SG performance, and retention of MIT tax status in AU.
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SG continues to shine while overseas bottoms out
- Suntec REIT's FY25 revenue, NPI and JV income of S$471.6m, S$316.8m and S$103.3m rose 1.7%, 1.9% and 3.7% y-o-y, respectively.
- Overseas performance remained a drag, though we saw progressive lease commencements in 4Q25 in AU. JV income growth was driven by lower interest expense (-22.7% y-o-y), and we expect FY26E financing cost to mirror this level.
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Prudent capital management
- Gearing remained stable at 41.5%. Cost of debt fell 0.35-ppt y-o-y to 3.71% and is guided to drop marginally FY26E as higher-rate S$ swaps gradually roll off. S$150m perps is due for refinancing in FY26E, with new issuance expected at sub-4%.
- Portfolio valuation remained stable (+0.7% y-o-y), with SG up 0.9% y-o-y and UK up 0.6% y-o-y, partly offset by a 3.7% y-o-y decline in AU due to further cap rate expansion.
Maintain BUY with higher target price of S$1.56
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