SG Talk

Brokers' take: Maybank, RHB raise Suntec Reit target price on post-FY2021 results

MAYBANK Securities and RHB have both increased their target prices (TP) for Suntec Reit Suntec Reit: T82U -0.65% by S$0.05, maintaining their "hold" and "buy" calls respectively after the real estate investment trust (Reit)'s distribution per unit (DPU) increased by 9.8 per cent for the financial year ended Dec 31, 2021.

In a report on Thursday (Jan 27), Maybank Securities' TP was revised up to S$1.45 from S$1.40. RHB's TP was raised to S$1.77, from S$1.72.

Units of Suntec Reit closed flat at S$1.55 on Thursday.

Maybank Securities analyst Chua Su Tye observed that office rental reversion was slower at 3.2 per cent for FY2021 and should ease further in FY2022, due to higher expiring rents.

As for Suntec's retail properties, Chua said that although mall revenue and net property income had increased year on year due to the higher occupancy of 94.7 per cent in Q4 FY2021, the retail rental outlook remained weak. He expects rental reversion to moderate at a decrease of 10 per cent in FY2022.

Although it has diversified its portfolio with overseas acquisitions, high gearing is likely to cap the Reit's accretion from future deals as it is higher than most of its peers and its own history at 43.7 per cent, decreasing from 44.3 per cent, Chua added.

ESR just completed the takeover of ARA which manages Suntec reit. I don't trust this new sponsor.

this is like counting beans $1.55 to $1.77?...after that what?

buy opportunistically went price dip a lot relatve to assets then put it aside and forget about it...
...forget about quarterly earnings minor changes in dpu rental reversion etc these are just noise ...once you lock in those assets at a low enough price during pandemic ever thing else will take care of itself. 

dont buy reits during normal times without big discount to assets ...your returns will be low spending time to fathom the small changes in rental due to economic fluctuation is a big waste of time.

as we exit pandemic and things return to normal the bargain in reits is over...you wont gain much buying, you might as well buy sti etf as it has some industrial that benefits from the economic recovery.

all this price targets from brokers are just rubbish to entertain clients...you buy when you have big safety margin the technique is to use relative discount to assets and avg 5yr dpu divide by current stock price....only when you get a big discount you buy lock in the price and yield put in aside for long term....it will take care of itself.

thinking of which reits to buy every month is a bad approach. most of the time reits isnt a good investment

(30-01-2022, 01:59 PM)starbugs Wrote: [ -> ]ESR just completed the takeover of ARA which manages Suntec reit. I don't trust this new sponsor.

Yes, better to buy Suntec reit than ESR