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Gross revenue for 1H24 is in line with expectations, inching up by
1.2% to S$226.9mn due to the strong performance of Singapore assets
(Retail rental reversion: +20.8%, Office: +9.7%) while overseas assets
faced pressure (Australia revenue: -6.4%, UK: -16.1%).
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NPI increased by 1.5% to S$151mn, forming 48% of our FY24e
estimates. DPU plummeted by 12.5% in the absence of the 0.398 cents
capital top-up, with 1H24 DPU standing at 3.042 cents, which is 49% of
our full-year forecast.
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SUN continues to demonstrate the capability of monetizing its
assets as it divested S$31.5mn of strata units at 27% above book value
and has put another 12.3k sqft for sale at c.S$41.8mn. With the
strengthened cash position and the possible uplift on MAS’s regulation
(ICR lowered from 2.5x to 1.5x), SUN would soon improve its balance
sheet, which has been one of the main drags on its share performance. We
reiterate our BUY recommendation with an unchanged DDM-TP of S$1.41 and
FY24e-25e DPU of 6.2 to 7.5 cents.
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