- 1Q DPU (+24% y-o-y) came in well above our and Street expectations. Hongkong Land (SGX:H78)’s recent entry as a substantial shareholder adds a value-unlocking angle along with ongoing strategic review. We believe the above catalysts will continue to narrow Suntec REIT’s significant ~30% trading discount to book value.
1Q DPU up ~24% y-o-y.
- - Read this at SGinvestors.io -
- Financing costs fell ~15bps q-o-q to 3.56% and has been lower by 50bps since the 4Q24 peak. We expect a slight increase in all interest rates to ~3.65% due to the expiry of AUD swaps but still be lower y-o-y. About 65% of Suntec REIT’s debt is currently hedged.
Entry of HKL brings value-locking in play.
- - Read this at SGinvestors.io -
- The move coincides with Suntec REIT’s new sponsor Acrophyte Asset Management announcing a strategic review with the aim of strengthening portfolio performance and enhancing capital efficiency in order to narrow Suntec REIT’s deep trading discount to book value, especially with the surge of interest in Singapore’s prime commercial assets.
- We believe this could involve Suntec REIT potentially divesting one of its Singapore central business district (CBD) assets and possibly buying into sponsor’s slightly higher yielding 9 Penang Road Building.
Rent reversions remain strong.
- Read more at SGinvestors.io.
