Broker: Maybank Research Pte Ltd
Date of Report: July 27, 2026
Excerpt from Maybank Research Pte Ltd report.
Report Summary
Stock: Suntec REIT (SUN SP)
Action: Downgrade to HOLD (from BUY)
Target Price: SGD 1.56
Last Price (at time of report): SGD 1.52
Key Highlights & Actionable Insights:
- 1H26 DPU rose 24.8% YoY to SGD 0.03936, driven by stronger Singapore office and retail performance, lower financing costs, and the absence of an Australia withholding tax provision from 1H25.
- Gearing increased to 43.0% but remains manageable. All-in debt cost declined to 3.55%.
- Singapore office and retail rental reversions remained robust at 10.1% and 10.7%, respectively, with committed occupancy at 99.5% for both segments.
- Overseas portfolio performance was mixed: Australia occupancy improved to 90.1% but earnings were affected by the absence of one-off compensation at 177 Pacific Highway; UK NPI fell 10.7% YoY due to Minster Building vacancies (expected to recover to ~94% occupancy).
- Management is focusing on capital recycling, exploring Australian asset divestments at ~6.5% cap rates, with proceeds to repay debt and redeploy into higher-yield Singapore assets.
- Portfolio restructuring benefits are not immediate. The proposed asset swap faces execution, pricing, and timing risks, with no clear immediate DPU uplift.
- Full-year forecasts maintained. Results broadly in line with expectations.
Implications for Investors:
- The upgrade in DPU and solid Singapore portfolio performance are positives; however, overseas headwinds and relatively high gearing limit upside.
- With the current unit price having rerated, further upside is capped in the near term. Investors should HOLD with a target price of SGD 1.56 and await clearer evidence of portfolio restructuring benefits or improved overseas performance.
Above is an excerpt from a report by Maybank Research Pte Ltd. Clients of Maybank Research Pte Ltd can access the full research report from the broker’s website.
