Suntec Reit: 2Q10 results. Marginal yoy decrease in gross revenue and distributable income, due to lower avg passing rents from Park Mall and One Raffles Quay. However overall office and retail occupancy continued their steady improvement to 97.6% and 98.7% respectively, due to AEI completions, rising visitor arrivals and opening of the Promenade and esplanade MRT stations which improved connectivity into Suntec City
DPU fell 15% yoy to 2.528cts, bcs of deferred payment to manager, but still translates to decent 7.1% annualized yield. Mgt is positive on the demand outlook, noting an uptrend in expansion demand from existing tenants as well as new tenants from a diverse range of industries. Gearing also remains conservative at 33.6% with no major refinancing due till 2012. Stock last traded at $1.43, 18% discount to its NAV/unit of $1.76. Deutsche maintains Buy, upgrades its target to $1.52 to $1.48.
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