Suntec REIT

UOBKayhian on 23 Oct 2014

FY14F DPU (S$ cent): 9.4
FY15F DPU (S$ cent): 10.4

Results are in line with the opening of phase 2 of Suntec City mall boosting sales.
Management remains confident on the office portfolio’s outperformance. While our site
visits suggest foot traffic is still recovering, the full impact of AEI works is expected only
when the entire mall opens. Management is targeting to secure accessible luxury
brands in phase 3, while phase 1 continues to focus on highstreet brands and phase 2
on family, entertainment and kids.
Maintain BUY and target price of S$2.05. Anticipate further acquisitions with improved
financing flexibility as gearing remained low at 34.4% (1Q14: 34.1%). This could include
further acquisitions of Grade-A assets in Australia’s gateway cities including Sydney
and Melbourne. In Singapore, Suntec REIT could further raise its stake in Suntec
Convention Centre from its current 61%. The additional funds could also be used to
finance a potential AEI at Park Mall.