Suntec REIT : OUTPERFORM - Maintained

Management came up trumps in 2Q12, with full occupancy for Suntec City offices. Pre-commitments for the mall’s asset enhancement have again climbed, with management planning to fast-track later phases. At 0.7x P/BV, Suntec is the cheapest large-cap S-REIT. 2Q12/1H12 DPUs met consensus and our estimates, at 26%/53% of our FY12 estimate. We expect more AEI disruption in 2H12. However, we raise DPUs and DDM target price (8.1% discount rate) after adjusting AEI timing and rentals. Suntec remains an Outperform and a key sector pick.