Suntec REIT

[EnSabahNur]

Solid execution from the manager.

I noticed that you have Suntec in your portfolio. How do you think the subsequent opening of the rest of Suntec will affect DPU?

[Dividend Warrior]

Solid execution from the manager.

I noticed that you have Suntec in your portfolio. How do you think the subsequent opening of the rest of Suntec will affect DPU?

DPU will most probably increase, as mentioned by the manager. The new rental rate will be higher and the amount of rentable retail space will increase too. So, double positives IMO.

[NTL]

Two question here.

Few posts ago, there is an discussion regards to Suntec using lower Cap Rate, resulting in higher valuation.

Since the management fees is based on the asset size, is this a case where Suntec "inflate" the value to earn more than they necessary should?

With the enhancement, this will increase the value further, and this will boost their fees. In this case, ARA will be the main beneficiary of the enhancement?

[Dividend Warrior]

With the enhancement, this will increase the value further, and this will boost their fees. In this case, ARA will be the main beneficiary of the enhancement?

I believe so.

More leases to negotiate, more tenants to be sourced, significantly larger space to be managed. Basically, more workload for the manager. So, I am fine with an increase in management fees.

[EnSabahNur]

Solid execution from the manager.

I noticed that you have Suntec in your portfolio. How do you think the subsequent opening of the rest of Suntec will affect DPU?

DPU will most probably increase, as mentioned by the manager. The new rental rate will be higher and the amount of rentable retail space will increase too. So, double positives IMO.

How much do you estimate DPU will increase to?

[Dividend Warrior]

Solid execution from the manager.

I noticed that you have Suntec in your portfolio. How do you think the subsequent opening of the rest of Suntec will affect DPU?

DPU will most probably increase, as mentioned by the manager. The new rental rate will be higher and the amount of rentable retail space will increase too. So, double positives IMO.

How much do you estimate DPU will increase to?

According to the manager,

"Committed occupancy for Phase 1 has improved to 99.6% from the precommitment of 96.7% achieved in 1Q, whereas passing rent of S$13.99 psf pm was also significantly higher than the rate of S$11.31 for the rest of Suntec City Mall and S$12.59 projected for the whole project."

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Suntec City is facing competition from Marina Square Mall (also undergoing AEI).

[Drizzt]

does that mean they will definitely get that dividend? remember that the management is only quoting the passing rent! it doesnt mean it will happen.

EnSabahnur is likely asking based on you as a shareholder, your workings on the forward FY 14 dpu

[Dividend Warrior]

does that mean they will definitely get that dividend? remember that the management is only quoting the passing rent! it doesnt mean it will happen.

EnSabahnur is likely asking based on you as a shareholder, your workings on the forward FY 14 dpu

I prefer to quote the management. They are the ones who will have the best knowledge since they are managing the REIT after all. They have much much better reputation than me. I am a nobody. I only know how to copy and paste and increase post count.

At its last results briefing, Suntec's management indicated that "..... With a forecasted average rental rate of SGD12.59 per sq ft per month (+25%) and a higher NPI of SGD7.8m per month (+33%) post-Phase 1 AEI. We expect Suntec REIT to benefit from this project when the majority of works are completed in 4Q13......"

[FatBoi]

does that mean they will definitely get that dividend? remember that the management is only quoting the passing rent! it doesnt mean it will happen.

EnSabahnur is likely asking based on you as a shareholder, your workings on the forward FY 14 dpu

I prefer to quote the management. They are the ones who will have the best knowledge since they are managing the REIT after all. They have much much better reputation than me. I am a nobody. I only know how to copy and paste and increase post count.

At its last results briefing, Suntec's management indicated that "..... With a forecasted average rental rate of SGD12.59 per sq ft per month (+25%) and a higher NPI of SGD7.8m per month (+33%) post-Phase 1 AEI. We expect Suntec REIT to benefit from this project when the majority of works are completed in 4Q13......"

Alamak, how come discussion become like this...haaha!

Management arguably have better insider knowledge of the business but does not mean opmi like us should blindly take their word for it. Of course, I like to think maybe there are other reasons out there to support why DW is confident of mgmt - be it track record, recent insider purchases (especially open market). DW's response not helping his reputation but maybe not so impt to him - cest la vie~

In any case, mgmt is only one aspect of security analysis. So Drizzt is right to probe the robustness of optimisim in forward looking DPU. It may not be a clear increase even with improved committed occupancy and retail space. Last quarter, almost 40% of DPU is contributed by dividend income from entities holding on to ORQ and MBFC properties. Overall DPU will not be solely dependent on what happens at Suntec.

Can be up can be down.

[kayaroti]

Note that Suntec City is only part of the entire Suntec Reit portfolio.
Properties under Suntec Reit includes: Suntec City, Park Mall, One Raffles Quay and MBFC.

The increase in Suntec City rent will not translate to a proportionate increase in the dpu.
DPU increase will be much lower.