Suntec REIT: Not seeing sunshine and rainbows

SINGAPORE (July 22): Market watchers are turning cautious on Suntec Real Estate Investment Trust (Suntec REIT), as it reported an unchanged distribution per unit of 2.5 cents for 2QFY2016.

Daiwa Capital Markets has an “underperform” rating with a raised target price of $1.53 from $1.51. Religare Institutional Research maintained a “hold” recommendation and an unchanged target price of $1.66, while RHB maintained its “sell” rating with a higher target price of $1.50 from $1.31 previously.

For the quarter to June, revenue fell 3.1% to $78.9 million and net property income fell 7.5% to $52.7 million, from the divestment of Park Mall. However, DPU remained unchanged due to the $8 million capital distribution from Park Mall’s sale proceeds. Without the capital distribution, DPU would have fallen 3.4% year on year, according to estimates by RHB’s analyst, Ong Kian Lin.

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