Post Reply
21-40 of 475
Singapore Office Sector - Respite May Be Brief
Author: kimeng | Publish date: Thu, 11 Jul 09:55
Slide stemmed, for now. Early indications suggest that the office rental market appears to have stabilized for now, following a 9% correction in Grade A rents in 2012. However, we believe that the respite may be brief, with further downside likely in 2014 following the completion of Asia Square Tower 2 later this year, in our view. Our HOLD recommendations on CapitaCommercial Trust (CCT SP) and Keppel REIT (KREIT SP) are maintained ahead of their 2Q13 results.
Temporal shortage boosts near-term optimism. It has been nearly a year since the completion of the last major Grade A office development in the form of One Raffles Place Tower 2. Since early 2013, landlords have been taking advantage of the temporary lack of new supply as leasing demand from a diverse pool of small tenants allowed recent Grade A completions (e.g. MBFC Tower 3 and Asia Square Tower 1) to fill up to over 90% occupancies. However, we think the dynamics will change again, once the 775,000 sq ft Asia Square Tower 2 is completed in around Sep 2013, as its pre-commitment level remains sub-par at around 20%.
Demand drivers are sorely lacking. Even as business expectations improved in 2Q13 which helped to support office rents, we think that demand is insufficient to drive rentals up substantially, especially when there is ~600,000 sq ft of Grade A space left to fill at Asia Square Tower 2. Local and regional economic growth remains challenging and expectations for growth in 2014 may also have to be moderated. We now expect flat Grade A rents in 2013 and a 5%-decline in 2014. For Grade B offices, we expect rental declines of 5% and 10% respectively in 2013 and 2014, as the relocation process gathers pace.
Stable earnings likely in 2Q13. We expect the office REITs, namely CCT and KREIT, to report flattish QoQ DPU growths in 2Q13. For CCT, we will be looking out for the progress of backfilling at Capital Tower. For KREIT, 2Q13 is expected to similarly be a non-event, as the acquisition of 8 Exhibition Street in Melbourne is only expected to be completed on or around 1 August 2013.
Not expecting a turnaround story. We see limited upside for the office REITs from rental reversion and we think it is still too early to buy into the turnaround story. On the other hand, we have adjusted our DDM valuations to incorporate a higher risk-free rate of 3% and higher cost of equity, to reflect the current market adjustment to the potential of the U.S. Fed tapering on its quantitative easing. Maintain HOLD on CCT (TP: SGD1.28) and KREIT (TP: SGD1.15).
Suntec REIT – Will It End The Strong Rebound?
From the weekly chart, we can clearly see that Suntec REIT has been in a downtrend over the past two month.
Generally, it is relatively safe to sit on the short side. For the past two weeks, Suntec REIT rebounded strongly without any deep pullback. It will be relatively safe to short on rebound when bulls used up their energy.
Despite Suntec REIT went up yesterday, it was not able to hold at high end when the market closed. This indicates that sellers may start to control this stock for the next few days. One may consider shorting if it rebounds to around 50 percent Fibonacci retracement level.
Weekly Chart Of Suntec REIT
Daily Chart Of Suntec REIT
Although Suntec REIT is undervalue, high gearing is a big concern.. watch out for further drop if there is sudden interest hike!
http://mystocksinvesting.com/singapore-reits/singapore-reits-comparison-table-for-dividend-investing-as-passive-income-june-2013/
...this stock in sympathy with the disgraced troubled pastor??
... drop a lot leh.
...wtf
marubozu1688 ( Date: 24-May-2013 13:25) Posted:
|
Be careful of the sell off in Singapore REIT.
http://mystocksinvesting.com/singapore-reits/singapore-reit-sell-off-should-you-take-profit-now/
Suntec REIT dropped 2.4%!
Suntec REIT's net property income fell 37.4% to S$30.7m
Blame it on the partial closure of SCM.
According to OCBC Investment Research, Suntec REIT announced its 1Q13 results after the market close yesterday. Gross revenue fell 32.2% YoY to S$49.7m, while NPI saw a 37.4% decline to S$30.7m amid the partial closure of Suntec City Mall (SCM) and Suntec Singapore for asset enhancement works (AEI).
Here's more:
However, distributable income dropped by a more benign rate of 13.3% to S$47.6m. Further aided by a S$2.7m top-up from Chijmes sale proceeds, the distributable amount eased only by 8.4% to S$50.3m.
This translates to a DPU of 2.228 S cents, down 9.2% YoY. We deem the results to be well within expectations, given that the quarterly distribution made up 24-25% of our and consensus FY13F DPU.
Retail segment registered a 38.9% YoY decrease in revenue as another portion of SCM next to Promenade MRT station was closed in Mar to execute the Phase 2 AEI. We also note that Suntec Singapore made minimal contribution during the quarter.
However, the office segment continued to perform, achieving a 7.6% growth in revenue on the back of positive rental reversions and consistently high occupancy of 99.7% (unchanged QoQ). Management updated that it has signed a total of 185,000 sqft of leases in 1Q, leaving it with only 10.3% of office leases due to expire in 2013. As such, we expect the segment to continue to exhibit resilience for the rest of FY13.
Pre-commitments for Suntec City Mall’s (SCM) Phase 1 post-AEI leases hit 83% in 4Q12 and we believe most were secured above the targeted SGD12.59 psf/mth. Suntec also reported that 37% of Phase 2 NLA has been pre-committed.
We noted that Phase 2 AEI for SCM has commenced and the intensity of the refurbishment works could mean that overall AEI works should wrap up as scheduled by 4Q14.
Optimistic on SCM Rental Uplift. We estimate that the average passing rents for SCM post-AEI may be secured at SGD13.50 psf/mth. We think this is still conservative, given that passing rents at nearby Raffles City Mall are contracted at ~SGD18-19 psf/mth.
In addition, the recent AEI at Causeway Point (suburban mall in Woodlands) has managed to uplift its average rent from SGD10.20 psf/mth (pre-AEI) to current SGD13.52 psf/mth, and we expect Suntec to do likewise, if not better, for a Downtown Core mall.
High chance of DPU top-up. Suntec received cash proceeds of ~SGD147m from the sale of Chijmes in 1Q12. We think it will keep the flexibility for DPU top-up in 2013, when its mall occupancy will be most affected (DPU: 9.22 cents in FY13F vs 9.49 cents in FY12).
1Q13/2Q13 quarters will witness the largest occupancy dip and we do not rule out the likelihood of a DPU top-up as early as 1H13.
Suntec REIT's DPU to dip 5%
No thanks to ongoing renovation works at SCM.
According to Maybank Kim Eng, Suntec’s 1Q13 DPU is likely to be lackluster, dragged down by Suntec City Mall’s (SCM) ongoing renovation works. Maybank estimates that the largest dip on FY13 DPU will occur in 1Q-2Q13, when Phase 1 new tenants have yet to start paying rentals and Phase 2 old tenants are being vacated for the AEI.
Maybank noted that it forecasts 1Q13 DPU at 2.20 SG-cts (-5% QoQ -10% YoY) and FY13 DPU at 9.2 SG-cts. (-3% YoY).
Here's more:
iluvboost ( Date: 24-Apr-2013 10:01) Posted:
|
iluvboost ( Date: 24-Apr-2013 10:00) Posted:
|
more upside from new Fund buyin?
http://citywire.co.uk/global/henders...e-fund/a672141
guoyanyunyan ( Date: 24-Apr-2013 09:52) Posted:
|
|
|
SG Daily: Suntec REIT Singapore Daily Suntec REIT: Look Past the Expected Dip in 1Q13 DPU Buy TP $2.07 Suntec’s 1Q13 DPU is likely to be lackluster, dragged down by Suntec City Mall’s (SCM) ongoing renovation works. We estimate that the largest dip on FY13 DPU will occur in 1Q-2Q13, when Phase 1 new tenants have yet to start paying rentals and Phase 2 old tenants are being vacated for the AEI. We forecast 1Q13 DPU at 2.20 SG-cts (-5% QoQ -10% YoY) and FY13 DPU at 9.2 SG-cts. (-3% YoY). Suntec received cash proceeds of ~SGD147m from the sale of Chijmes in 1Q12. We think it will keep the flexibility for DPU top-up in 2013, when its mall occupancy will be most affected (DPU: 9.22 cents in FY13F vs 9.49 cents in FY12). 1Q13/2Q13 quarters will witness the largest occupancy dip and we do not rule out the likelihood of a DPU top-up as early as 1H13. Reiterate BUY with a TP of SGD2.07, priced at P/B of 1x. ...Last Done: $1.95... |
SG Daily: Suntec REIT
Suntec City Mall AEI in full gear Buy TP $1.90 Asset enhancements at Suntec City Mall (SCM) have stepped up with the impending completion of Phase 1 and the commencement of Phase 2. Judging by the intensity of the refurbishment works, the overall AEI should be completed on schedule in 4Q14. Post-AEI rental increases could also surpass expectations. We think SGD13.50 psf/pm (vs SGD12.59 psf/pm targeted by Suntec) is possible and we have thus raised FY14F DPU by 1% to reflect this. This should offset the expected FY13 dip in DPU caused by the AEI. Reiterate BUY on a higher TP of SGD1.90. We are positive on the earnings enhancement potential of the ongoing AEI, which has seen pre-commitments hitting 83% for Phase 1 and 37% for Phase 2, which is completing at the end of 2013.
... Prev Close: $1.76 ...
Just to add on the followings regarding the CB:
- Initial Conversion Price : S$2.154 for each new Unit.
- The Issuer expects to use 100% of the net proceeds from the Issue to refinance existing debt.
Trade with care!
Suntec Real Estate Investment Trust (Suntec Reit) has raised S$280 million from its issue of convertible bonds at an interest rate of 1.4 per cent per annum.
The bonds can be converted into cash and new ordinary units in the capital of reit, and are due on March 18, 2018.
" The issue was oversubscribed given strong investor demand and has been fully placed to institutional investors and accredited investors," the reit said.
Citigroup Global Markets Singapore and Nomura Singapore Limited are the joint lead managers, while Citigroup and Nomura International plc are the joint underwriters for the issue.