Suntec Real Estate Inv Trust: Multi-pronged strategy at work

- No surprises in results
- Growth from organic and inorganic means
- Maintain Buy, TP $1.69

Maiden contributions from MBFC. Suntec recorded distribution income of S$44.9m, -2.8% qoq and –6% yoy, dragged down by slightly lower contributions from both the retail and office properties. While portfolio occupancy improved to 98-99%, impact of negative office reversions impacted bottomline. It renewed/ contracted new leases of 127ksf of retail NLA in Q4 and another c304ksf of office NLA at an average of S$8.16psf/mth, including forward leasing a number of leases due FY11. MBFC1 contributed a maiden S$2.5m. DPU of 2.316Scts (FY10: 9.859Scts) was 20% lower yoy due to a recent placement exercise to partially fund the acquisition of MBFC1. The group took in a S$116.8m revaluation surplus, which lifted book NAV to S$1.78.

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