Suntec REIT – Strength in Singapore continues April 27, 2026 9

PSR Recommendation: ACCUMULATE Status: Maintained
Last Close Price: 1.49 Target Price: 1.63
  • 1Q26 DPU of 1.936 Singapore cents rose 23.9% YoY, in line with our expectations and forming 25.5% of our FY26e forecast. The growth was driven by a S$5.8mn drop in finance costs, stronger performance in Singapore office and retail, and a S$2mn lower withholding tax provision after retaining Australia Managed Investment Trust (MIT) status.
  • Rental reversions stayed healthy at +9.5% (FY25: +9.6%) for the Singapore office and +14.3% (FY25: +15.3%) for retail, reflecting resilient leasing demand. Interest costs fell 15bps QoQ to 3.56%, though we expect a slight rise to 3.7% in FY26e as low-cost AUD interest rate swaps entered in 2020 at sub-0.5% rates expired in 1Q26.
  • We maintain ACCUMULATE with an unchanged DDM-based TP of S$1.63 and no changes to our forecasts. SUN’s portfolio resilience is anchored by its Singapore assets, with rental reversions expected to stay robust at c.10% for retail and c.5% for office. SUN will undertake a strategic review of its portfolio once its board of directors has been finalised. It currently trades at an FY26e dividend yield of 5.2% and P/NAV of 0.72x.

 

 

 

 

 

The Positives
+ Singapore operations remained robust. Office occupancy rose 0.6 ppt QoQ to 98.8%,
alongside strong +9.5% rental reversion, led by +13.2% at ORQ and MBFC Towers 1 & 2. We
expect office rental reversions of +5% in FY26e, with occupancy staying high amid limited core
CBD supply and tight market vacancies. Retail occupancy eased 0.5 ppt QoQ but remained
healthy at 99%, while rental reversion remained strong at +14.3%, with Suntec City Mall
achieving +15.0%. We expect retail rental reversions of +10% in FY26e, supported by resilient
tenant sales, which grew 5% YoY, and improved shopper traffic, which grew 2% YoY in 1Q26.

The Negative

– Overseas portfolio remains a drag, but stable QoQ. In Australia, occupancy inched up 0.1ppt
QoQ to 90.7%, though still weighed down by 55 Currie Street (66%) and Southgate Complex
(86.8%). Nonetheless, the portfolio is expected to remain stable, supported by fully occupied
177 Pacific Highway and 477 Collins Street. In the UK, Nova Properties remained fully
occupied, while The Minster Building continued to face vacancy pressures, with occupancy
unchanged QoQ at 85.4%.

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About the author

Profile photo of Darren Chan

Darren Chan
Research Analyst
PSR

Darren has over three years of experience on the buy-side as a fund manager. During his time as fund manager, he has managed multiple funds and mandates including dividend income, growth, customised, Singapore focused and regionally focused funds. He graduated from the University of London with a First-Class Honours degree in Banking and Finance.

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