CGS-CIMB analyst Lock Mun Yee reiterated a Hold rating on Suntec Real Estate Investment yesterday and set a price target of S$1.39.
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Lock Mun Yee has given his Hold rating due to a combination of factors influencing Suntec Real Estate Investment’s current market position. The company’s recent performance was bolstered by a stronger Singapore portfolio and reduced financing costs, alongside a reversal of withholding tax provisions for its Australian portfolio. However, these positives were partially offset by lower occupancy rates at certain properties and weaker contributions from its UK assets.
Despite the robust rental reversions and high occupancy rates in its Singapore office and retail segments, challenges persist in the Australia and UK office markets. These challenges could potentially delay improvements in vacancy rates at overseas properties, limiting near-term growth prospects. The Hold rating reflects a cautious stance, acknowledging both the company’s strengths and the external market challenges that could impact its performance. Upside risks include potential balance sheet strengthening and cost reductions, while downside risks involve interest rate hikes and a weak macroeconomic outlook.
According to TipRanks, Mun Yee is a 4-star analyst with an average return of 6.1% and a 54.76% success rate. Mun Yee covers the Real Estate sector, focusing on stocks such as Suntec Real Estate Investment, Keppel REIT, and CapitaLand Ascendas REIT.