Suntec REIT and CapitaLand Ascott Trust have both demonstrated resilience in their recent financial performances, according to reports by Maybank IBG Research. Suntec REIT reported a 3.4% year-on-year increase in its first-quarter distribution per unit (DPU), driven by operational improvements and reduced financing costs. Meanwhile, CapitaLand Ascott Trust saw a 4% rise in gross profit for the same period, attributed to accretive recycling and enhanced property performance.
Suntec REIT’s occupancy rates remained stable, with positive rent reversions in both office and retail sectors, although these are moderating. The company’s debt metrics are stable, with a reduction in debt costs due to lower refinancing rates. Analyst Krishna Guha maintains a “Hold” recommendation on Suntec REIT, citing its fair valuation with a 5.5% yield and a price-to-book ratio of 0.6.
CapitaLand Ascott Trust, on the other hand, is focusing on resilience by enhancing its asset portfolio. Despite challenges from increased operating expenses, the trust’s revenue per available unit (RevPAU) grew by 4% year-on-year, largely due to higher occupancy rates. However, the absence of major events in Singapore led to a decline in RevPAU on a same-store basis. The trust’s gearing increased due to ongoing asset enhancements, but debt cost and coverage ratios remained stable. Guha recommends a “Buy” for CapitaLand Ascott Trust, highlighting its focus on reconstitution and stable distribution.
Both Suntec REIT and CapitaLand Ascott Trust are navigating market challenges with strategic initiatives aimed at maintaining stability and growth. As they continue to adapt, their performances will be closely watched by investors seeking resilient investment opportunities in the real estate sector.
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