Suntec Reit *Official* (SGX:T82U)

addict951

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Wah, sibei song!!!!!!!!!
All of Kepland's bullishness will now transfer over to Suntec liao thanks to this Grade-A asset!!!
 

kenpachi82

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im a unitholder, and i feel that the price might plunge tmr, as there will definitely be a $$$ raising exercise. Traders (not investors) will be rushing to dump it.. the only support will be the dividends..but after ex-date..well it could be ugly..
 

lzydata

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Suntec REIT hasn't released its projections so we don't know how good a deal this is financially for them. With K-Reit buying its one third share of MBFC there was some doubt because they did it through an asset swap.

Since gearing is now 32.9% there is not much room for debt financing. Assuming they gear up to 40% they can raise about $370m, which leaves about $1125m through a rights issue. There are now 1,881,862,143 units, so it could be a 1 for 2 offer at $1.20 apiece, a good discount to the current price of $1.56 and current NAV of $1.828. As a unitholder myself I would definitely prefer rights to placements.

So actually if the knee-jerk reaction is too great it may just be a good opportunity to buy.
 

Alphidius

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The funds will definitely come through Preferential Offering or Rights Offering.

Cons: DPU will most certain fall off the charts, maybe to 2 cents flat.
Share price will surely fall after the offering exercise (or even before that!) as dilution kicks in.
Could take a year or so before "reaping what was sowed". MBFC has yet to be opened. Can anyone working near One Raffles Quay tell us if the construction has been completed?

Pros: Might have higher EPS after the whole offering and MBFC starts reaping rewards.
DPU might increase above current levels if MBFC is able bring more profits than the offerings issued.

Still, take a look at Suntec's debt and when they are due. Note FY11 & FY12.

SuntecQ12010FR.jpg


My 2.14 cents
 

MikeL09

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Definitely gonna get whacked today...

Another knee jerk reaction after the SGX/ ASX? Any dip would be temporary, as the big picture and longer-term view will prevail.

MBFC has been reported to have secured around 95% occupany, even beyond its completion, with global tenants like Amex, Barclays, Nomura, Standard Chartered Bank. Huge prestige factor is at stake here. I won't be surprised if more reputable institutions choose to move out of the Shenton Way/ Raffles area into the new MBFC.

I would venture further as to say that companies will risk being looked upon as 2nd-class companies if they don't have an office in the swanky and sparkling Towers of MBFC.:s13:
 

Shingoz

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dbs vickers maintain a buy call...and up estimate from 1.55 to 1.66 (12mths) :s31:


Results in line, topline +2.1% on higher office income

Buying MBFC1 for $2400psf

Maintain Buy call, TP $1.66
 

addict951

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Latest round of reports all up

Philip - Suntec Reit Hold tp 1.34
OCBC - Suntec Reit Buy tp 1.63 fr 1.44
 

MikeL09

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When was the last time Suntec acquired/ added a new property to its portfolio? Perhaps they were eyeing the MBFC, which is a 'land flowing with milk and honey.':s13: In fact, I would be concerned if they do not have any acquisition/ expansion plans when other reits were doing so with a vengeance of late. Remember, 'No venture, no gain.'

Looking to add more lots at, hopefully, a good discount.:s12:
 

MikeL09

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Well it could appeal "to the flock" for more $$.. ;)

If BB rolls out QE2 in November (chances are that it will material), there will be a lot of liquidity/ hot money coming in. Whether it's placement or PO, I think the subscription will be overwhelming. Don't even need the flocks!:D

Btw, BB = Ben Bernanke.:s13:
 

notanakin

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One thing I do have against Suntec Reit is that it has a pitiful corporate website. Some links are dead and you have to find stuff using the Site Map. I've written to the email address for the website to point out some of the problems, but never got a reply. (Whereas I wrote to K-Reit about an error on some figures and they wrote back straight away AND corrected the error.)

Suntec Reit gets my vote for worst corporate website.
 

addict951

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One thing I do have against Suntec Reit is that it has a pitiful corporate website. Some links are dead and you have to find stuff using the Site Map. I've written to the email address for the website to point out some of the problems, but never got a reply. (Whereas I wrote to K-Reit about an error on some figures and they wrote back straight away AND corrected the error.)

Suntec Reit gets my vote for worst corporate website.

Email Yeo See Kiat directly.
See how
 

lzydata

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The funds will definitely come through Preferential Offering or Rights Offering.

Cons: DPU will most certain fall off the charts, maybe to 2 cents flat.
Share price will surely fall after the offering exercise (or even before that!) as dilution kicks in.
Could take a year or so before "reaping what was sowed". MBFC has yet to be opened. Can anyone working near One Raffles Quay tell us if the construction has been completed?

Pros: Might have higher EPS after the whole offering and MBFC starts reaping rewards.
DPU might increase above current levels if MBFC is able bring more profits than the offerings issued.

Still, take a look at Suntec's debt and when they are due. Note FY11 & FY12.

SuntecQ12010FR.jpg


My 2.14 cents

Actually the more up to date debt maturity profile in the latest presentation - see SGX or http://www.suntecreit.com/Document_...1020-10-01_Presentation_slides_3Q10_final.pdf - includes the results of some refinancing so it's more spread out.
 

MikeL09

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From OCBC Investment Research, Morning Call...:)
Quote: MBFC - the place to be at.
____________________________

Office REITs: The Going gets Exciting as Competition Heats Up
Both K-REIT Asia and Suntec REIT have announced plans to each acquire
a one-third interest in MBFC Phase One. MBFC is deemed a strategic
acquisition on the back government's commitment to pump more than
S$1b into infrastructure works to support Marina Bay's growth over the
next 10-15 years and increasingly greater demand for Grade-A office space
in Singapore. Noticeably, the acquisitions, if successful, will also propel
Suntec REIT's investment properties to approx. $5.8b, surpassing
CapitaCommercial Trust's S$5.2b. K-REIT Asia's investment properties,
accounting for the divestment of both Keppel and GE Towers, will also
levitate above S$2b, compared to the current $1.38b. All in all, we view
these two enlarged REITs as not only upping the stakes among Office
REITs but also exerting pressure on CapitaCommercial Trust and Frasers
Commercial Trust, who have yet to announce any local acquisitions YTD.
In addition, we feel that market attitude towards Office REITs is turning
due to increased leasing activity, better employment outlook and proactive
lease management tactics taken by office landlords. We remain upbeat
on the office-sector recovery; and now have an OVERWEIGHT rating for
the Office-REITs subsector
 
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notanakin

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wah .. looks like quite a bit of $$ due 2012

I think the risk is the refinancing cost rather than just the amount due (unless credit dries up again). If they are servicing $1m of debt at an interest rate of 4.5% p.a. and can replace it with a $1m loan that costs 3.5% p.a., that would be positive. If the new loan carries an interest rate of 5% p.a., then that's not so good.

They will also have to consider the duration of the loan: for example, lock in 3.5% for 10 years or pay 5% p.a. for 1 year and hope that rates go down after that. (Just my own illustrative figures, no inside info!)

The interest cost is a big component of expenses.
 
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