Suntec REIT’s FY20 DPU fell 22.1% to 7.40 S cents but was above our expectations. Looking ahead, we expect its Retail segment to continue its gradual but uneven recovery.

Its Convention segment’s performance will continue to be adversely impacted by the Covid-19 pandemic. Its Singapore Office portfolio is expected to achieve positive rental reversions, although at a smaller magnitude as compared to FY20. There are also uncertainties over the longer-term impact of work from home trends.

In Australia, Suntec REIT’s office portfolio is expected to be resilient, underpinned by firm occupancy and long WALE, although the AUD volatility remains a risk. HOLD.

Source: OCBC Research - 27 Jan 2021