Suntec REIT

Suntec REIT: BoAML reinstates coverage on Suntec REIT with Underperform Rating and TP $1.67/unit, implying 5.6% FY15E/16E yield and 9% downside to share price. The house thinks there is a general lack of catalyst for upside. AEI growth expectations have been fully priced in, and further upside from office up-cycle should be limited given Suntec’s fairly rented portfolio. Suntec could potentially acquire overseas assets to expand revenue, but the move would also elevate its risk profile and return requirements.