Tax transparency for MBFC 1 should allow savings translating to 2-3% of DPU annually. We do not dismiss the possibility of similar conversions and structures for ORQ and MBFC 2, which could allow less tax leakages and potential simplification of holding structures. We raise DPUs and DDM-based target price (discount rate: 8.1%) factoring in tax savings from Suntec REIT’s one-third stake in MBFC Phase 1. Maintain Outperform on favourable risk-reward. We see catalysts from earlier bottoming of office market and further tax savings.
OUTPERFORM - Maintained | Share Price S$1.31 - Tgt. S$1.51