- Suntec REIT (SGX:T82U) posted strong set of 4Q/FY25 results that were above our and consensus estimates, driven by lower interest costs and stronger organic income growth. FY26F DPU outlook remains positive with income growth from continued positive rent reversions and interest savings from lower-than-expected interest costs.
FY25 DPU up ~14% y-o-y
- - Read this at SGinvestors.io -
- For FY26, we expect it to be slightly below 3.7% pa with minimal debt due for refinancing and 65% loans hedged currently. Suntec REIT has S$150m @ 4.25% pa of perpetual securities (perps) due for interest reset in Jun 2026 which is currently trading above par. As such, we expect some interest savings from potential reissuance of this perps.
Portfolio valuation rose 0.7% y-o-y
- - Read this at SGinvestors.io -
- Suntec REIT recently had an option to exercise its right of first refusal to increase its stake in Marina Bay Singapore assets. However, management has chosen not to exercise the option due to the non-accretive nature, a disciplined stand which we appreciate.
- FY26 rent reversions to stay positive with a conservative guidance of ~5% for its Singapore office portfolio (FY25: +9.6%) and ~10% for Singapore retail portfolio (FY25:+15.3%) with stable occupancy. UK and Australia assets are likely to see occupancy uplift. Suntec Singapore Convention & Exhibition Centre performance is expected to be better than that of FY25.
DPU forecast and Valuation
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