Suntec REIT

Suntec REIT: According to a Singapore Exchange (SGX) My Gateway report released yesterday, Suntec REIT has been named as the best performing REIT year-to-date, yielding a total return of 11.1% versus the FTSE ST REIT index of a 2.2% return. The latest announcement does not come as a surprise, with Suntec REIT largely tipped by some analysts in recent months as their top S-REIT pick for 2014, on expectations higher DPU growth once its asset enhancement initiatives in Suntec City Mall are completed by 4Q14 and begin meaningful contributions. Maybank-KE shares a similar view, touting Suntec REIT (Buy: TP $1.83) as the house top S-REIT pick, where in pecking order, it prefers the retail REITs, followed by office, hospitality and finally industrial. Although as a whole, Maybank-KE is still Underweight the sector. Separately, Suntec REIT announced that it has placed out 218.1m new units at an issue price of $1.605 to private investors. The price represents a discount of 4.7% to the volume weighted average price (VWAP) of $1.6839 and 3.5% to the adjusted VWAP of $1.6629 per Unit, for the full market day on 18th Mar’14. The proceeds from the placement will be used to repay the REIT’s existing debt and the balance used for general corporate and working capital purposes.