The REIT’s retail rent reversion was +14.3% in 1Q2026. Suntec City Mall’s tenant sales rose 6% y-o-y in 1Q2026 (better than the +5% in 4Q2025). However, net property income (NPI) from Suntec Convention fell by 44.4% y-o-y in 1Q2026 due to absence of large scale conferences.
Elsewhere, The Minster Building in London remains impacted by vacancies following the lease expiry of a tenant in mid-June 2025, with occupancy at 85.4% (unchanged q-o-q). UK portfolio NPI fell 15.6% y-o-y in 1Q2026, with higher non-recoverable costs from vacancies.
All-in financing cost fell 15 bps q-o-q to 3.56% in 1Q2026 (FY25: 3.71%). But, with a hawkish RBA, management has guided cost of debt of around 3.6% for the year.
The key message during the briefing was the strategic review has not started as the board is still onboarding new members which have to be approved by the Monetary Authority of Singapore.
See also: OCBC's Lim maintains 'buy' on CLAS but lowers fair value to 95 cents
Chong Kee Hiong, CEO of Suntec REIT’s manager, when questioned indicated that the strategic review is likely to address and identify ways at narrowing the P/NAV discount. Suntec REIT’s NAV as at Dec 31, 2025 was $2.03.
“The review will assess the existing portfolio on a mid-term basis, evaluating which assets should remain and considering potential asset classes and geographies. The objective is to narrow the NAV discount and improve yield for unitholders,” JP Morgan describes in an update on April 24.
Chong says Hongkong Land has not requested a board seat and does not meet the interested party transaction (IPT) threshold of 15%.
Market watchers expect Suntec REIT to acquire 9 Penang Road at some point. In a previous breifing, Chong had suggested that divestment proceeds would be used for any acquisition. Suntec REIT’s divestment strategy continues to focus on Australian offices and Suntec strata offices. Chong says he sees increased buyer interest in Australia since last year. “We see more entities interested in Australia, despite interest rates going up. We have more people expressing interest than last year. Of course, they’ve expressed interest in our best assets,” he says, adding, “we won't do a dilutive acquisition. At this moment we are trading below book, and the cost of equity is around 5% so it’s difficult to acquire with debt plus equity. It will be a combination of cash from our divestment proceeds taking into consideration we don’t want our gearing to exceed 45%. So our hands are tied in terms of timing,” Chong says.
When asked whether Suntec REIT would consider divesting its one-third stake in ORQ or MBFC, Chong points out that it isn’t easy to sell a one-third stake. At any rate the stakes have to be offered to Keppel REIT and Hongkong Land’s Singapore Central Private equity fund (SCPREF) first.
“We expect Suntec REIT to benefit from organic growth drivers and interest savings, which will underpin a 5.7% 3-year DPU Cagr, with catalysts from the outcome of the strategic review, potential asset recycling to acquire 9 Penang Road and alignment with new shareholder Hongkong Land,” says the JP Morgan report dated Apr 24. It has maintained its overweight rating with an end-June 2027 price target of $1.60.
DBS Group Research has also maintained its target price of $1.60, adding that the strategic review and value unlocking strategies are catalysts.
RHB Research maintains its buy rating with a higher price target of $1.72 from an earlier target of $1.67. “HongKong Land’s recent entry as a substantial shareholder adds a value-unlocking angle along with ongoing strategic review. We believe these catalysts will continue to narrow Suntec REIT’s significant 30% trading discount to book value,” RHB says.
On the other hand, Morgan Stanley has an underweight rating on Suntec REIT with a price target of $1.10.
