Stock Name: SuntecReit
Company Name: SUNTEC REAL ESTATE INV TRUST
Research House: CLSA
Beyond yield accretion, REIT’s earnings profile “now skewed towards the high end office sector which we favour.” Trading at 0.8X P/B offering 6.6% yield, says REIT cheaper than most office, retail peers yet offers upside from retail operations, stability from income support.
Company Name: SUNTEC REAL ESTATE INV TRUST
Research House: CLSA
CLSA upgrades Suntec REIT (T82U.SG) to Buy vs Outperform, raises target price to $1.60. Says, private placement (at 4.0% discount to VWAP) in-line with other recent equity raising discounts of around 5.0%.
“The deal is marginally yield accretive...raising DPU marginally by 1.0%-2.0%. In the long run...the deal is a huge positive as it enables Suntec REIT to acquire one of the key office prime jewels in Singapore.”
“The deal is marginally yield accretive...raising DPU marginally by 1.0%-2.0%. In the long run...the deal is a huge positive as it enables Suntec REIT to acquire one of the key office prime jewels in Singapore.”
Beyond yield accretion, REIT’s earnings profile “now skewed towards the high end office sector which we favour.” Trading at 0.8X P/B offering 6.6% yield, says REIT cheaper than most office, retail peers yet offers upside from retail operations, stability from income support.
Post-deal, expects office to contribute 57% of earnings vs less than 50% previously; “more importantly, high-end prime grade A office now accounts for 23% of earnings, up from 10%.” REIT off 0.7% at $1.42.
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