Suntec Real Estate Investment Trust Is One Of Singapore’s REITs With The Lowest Valuations: 3 Things Investors Should Know

As of 8 January 2017, Suntec Real Estate Investment Trust (SGX: T82U) has one of the lowest price-to-book ratios amongst the REITs in Singapore that have market capitalisations of over S$1 billion.

For a quick background, Suntec REIT has partial or full interest in retail malls and offices in Singapore and Australia. Some of the properties in its portfolio include Singapore’s Suntec City and Australia’s Southgate Complex.

Here are three things about Suntec REIT that can give investors an overview of its business:

1. Growth in assets under management (AUM)

Suntec REIT AUM chart
Source: Suntec REIT’s presentation

Since its listing in late 2004, Suntec REIT has more than quadrupled its AUM to S$9.3 billion as of end-2015.

In fact, the REIT has consistently grown its assets in each year. The only exception is 2009, which is one of the years of the great recession.

2. Office occupancy rates

Suntec REIT occupancy chart
Source: Suntec REIT’s presentation

Suntec REIT’s office portfolio accounts for 68% of its total income. As the chart above shows, the REIT’s office portfolio in Singapore (orange line) has consistently achieved higher occupancy rates than the market (blue) since December 2009.

3. Income sources

Suntec REIT income segment chart
Source: Suntec REIT’s presentation

Suntec REIT splits its sources of income into three main property segments as the chart just above shows. The REIT has office, retail, as well as convention centre components.

One of the benefits of having a diversified portfolio is that bad performances in one area can be tamed by improvements in others.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.