Wednesday, January 26, 2022

Suntec Reit 2H 2021 Results


Suntec Reit (SGX. T82U) announced its 2H 2021 results today.

Gross revenue increases 15.3% Year-on-Year and net property income increases 30.3% Year-on-Year compared to 2H 2020.

DPU for 2021 increases 17.1% Year-on-Year to 8.666 cents.

Most importantly, DPU of 2.28 cents for 4Q 2021 will be paid on 28 Feb 2022.

It is important to note that the lower occupancy in Singapore office properties of One Raffles Quay and MBFC are partially offset by higher rental reversion of +3.2%. Overall occupancy in Singapore properties remain high at 97.5%.

There are new contributions from Nova properties and the Minster Building.

Suntec City strata office units and 9 Penang Road have been divested.

In terms of Suntec City's financial health, gearing ratio is quite high at 43.7%. All in financing cost is 2.35% per annum. Adjusted interest coverage ratio is relatively low at 2.6 times. NAV of $2.11 signifies Suntec Reit is undervalued based on share price of $1.54.

The prolonged impact of ongoing pandemic will make the recovery of convention centres and retail space owned by Suntec Reit slower than expected. Suntec Reit's tenants have a large composition of SMEs and small companies and hence may lead to early lease terminations and higher vacancies. Nonetheless, I believe Suntec Reit is a great value commercial Reit play worth getting paid more than 5% yield p.a to wait for its recovery.

Thanks for reading. Stay safe and be strong as always. 

With love & peace, 


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