Suntec REIT

Suntec REIT: 1Q12 results was in-line with expectations. NPI at $49m, +5% yoy and -5.8% qoq, while DPU at 2.5c, +2.7% and -1% qoq. Underlying trends were stable, with the improvement in office occupancy at 99.4% from 99.2%. The contribution from Suntec SG underpinned a 20% rise in revenue, excluding which rev would have fallen 4% on the Chijmes divestment. The Suntec City AEI appears to have started off on the right foot, with 45% of Phase 1 pre-committed. Other tenants include established brands, eg GAP, Guess, La Senza, Sincere Watch. Mgt comments that its projected 10.1% ROI is on track, based on progress to date. Counter trades at 7.3% estimated FY12 yield and 0.65x P/B. Ratings as follow: Deutsche maintains Hold with $1.32 TP. Goldman maintains Sell with $1.02 TP JP Morgan maintains neutral with $1.45 TP Merrill Lynch maintains U/p with $1.10 TP