Broker: OCBC Group Research
Date of Report: 24 July 2026
Excerpt from OCBC Group Research report.

Report Summary

Stock: Suntec REIT (SUN SP EQUITY)
Action: HOLD
Target Price (Fair Value): SGD 1.46
Last Close: SGD 1.51

• Key Idea: Suntec REIT delivered strong 1H26 results, with distribution per unit (DPU) up 24.8% year-on-year, exceeding expectations for the second consecutive quarter. However, the HOLD rating is maintained due to a limited upside to fair value and uncertainties in overseas markets.
• Highlights:
  • 1H26 DPU: 3.936 Singapore cents, up 24.8% YoY.
  • Singapore operations showed double-digit rental reversions and high occupancy (office and retail at 99.5%).
  • Management expects Singapore office rental reversions to moderate to ~5% for FY26.
  • Australian and UK office portfolios remain challenging, but some improvement is noted; divestment of mature overseas assets may be considered.
  • Aggregate leverage increased to 43.0% after redeeming SGD 150m perpetual securities; financing costs stable but with potential upside risk from rising rates.
  • FY26E DPU yield is projected at 5.1% with a price-to-NAV of 0.7x.
• Implications: While Suntec REIT’s Singapore assets continue to perform strongly, concerns remain over overseas exposure and rising leverage. Investors are advised to HOLD as the current price offers limited upside to the revised target of SGD 1.46, with risks including interest rates and macroeconomic slowdown.

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