Broker Name: DBS Group Research
Date of Report: 27 July 2026
Excerpt from DBS Group Research report.
Report Summary
- Stock: Suntec Real Estate Investment Trust (Suntec REIT)
- Action: BUY (Reiterate)
- Target Price: SGD 1.70 (raised from previous target)
- Current Price: SGD 1.52 (as of 24 July 2026)
- Ticker: SUN SP
Key Highlights:
- 1H26 Distribution Per Unit (DPU) rose 24.8% year-on-year to 3.936 Scts, driven by strong performance in the Singapore office and retail portfolio, and lower financing costs.
- Positive rental reversions of more than 10% across the Singapore office and retail assets, with management guiding continued positive reversions (5% for office and close to 10% for retail for FY26).
- Singapore portfolio remains the main earnings driver, benefiting from near-full occupancy and limited new supply in the Grade A office segment.
- Australian and UK portfolios show gradual improvement; occupancy challenges exist in some overseas assets but are being actively managed.
- Aggregate leverage increased to 43%, placing Suntec at the higher end of the peer range, but refinancing and asset recycling are prioritized over acquisitions to maintain balance sheet flexibility.
- Strong distributable income growth projected: FY26 earnings forecast raised, with expected 14% earnings growth year-on-year in FY26.
- Stock trades at attractive valuations around 0.7x P/B, with a projected distribution yield of 5.3% for FY26.
- Key risk: High gearing (c.43%) and low hedging ratio (~57%) make the REIT sensitive to interest rate changes, mainly in overseas markets.
- Strategic roadmap and recent management changes expected to unlock value and drive a more proactive strategy.
Actionable Insight:
Investors should focus on Suntec REIT for its strong Singapore Grade A office and retail exposure, positive rental reversions, and attractive valuation. The raised target price of SGD 1.70 and BUY call are backed by improved earnings forecasts, resilient local portfolio performance, and potential for further upside from strategic management actions and overseas asset recovery.
Above is an excerpt from a report by DBS Group Research. Clients of DBS Group Research can access the full research report from the broker’s website.
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