Company Name: SUNTEC REAL ESTATE INV TRUST
| Research House: CIMB | Price Call: BUY | Target Price: 1.47 |
CIMB Research raised its target price on Suntec Real Estate Investment Trust (REIT) (SUNT.SI), which owns malls and offices in Singapore, to $1.47 from $1.45 and maintained its outperform rating.
Suntec REIT was up 0.4% at $1.29, having gained 20% so far this year.
Suntec REIT has seen better rental reversions and stronger occupancy from its Suntec City offices, CIMB said. It also expects the firm to get goods and services tax rebates for the One Raffles Quay office building complex.
Suntec REIT’s management also said it is on track to hit its return on investment target of 10.1% from the improvement of its Suntec City mall, in view of secured pre-commitments of more than 45%, CIMB said.
“With limited distribution per unit downside and at 0.65 times price-to-book value, we reckon its risk-reward remains in favour of a positioning for a bottom and successful remake of Suntec City Mall,” CIMB said.
Singapore office rents have come under pressure in recent quarters as the weaker global economic outlook led firms to hold back expansion.
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