Suntec – Phillip

•3QFY10 of $63.2 million, net property income of $50.6 million, distributable income of $46.2 million

•3QFY10 DPU of 2.502 cents

•Acquiring 1/3 MBFC

•Maintain Hold, pending more details of acquisition

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Suntec REIT recorded 3Q10 revenue of $63.2 million (+2.1% y-y, +1.3% q-q), net property income of $50.6 million (+7.6% y-y, 6.7% q-q) and distributable income of $46.2 million (- 3.2% y-y, +0.6% q-q). 3Q10 DPU was 2.502 cents (-14.3% y-y, -1.0% q-q). Essentially we note the office portfolio has been improving in the past five quarters with occupancy edging up every quarter. Reversionary rent for leases secured in the quarter at Suntec City Office was $7.39 psfpm. Although this still represents a decrease of approximately 45% from the peak in two years ago, it has stayed relatively constant in the past five quarters and we believe the trough is already past. Like we mentioned in previous reports, this is a conscious effort by management to retain tenants and gain occupancy rate in the prospect of the completion of new supply of office space in the vicinity. The retail portfolio has also shown consistent results. Revenue contribution breakdown from the office and retail portfolio is 47% and 53% respectively, which has been steady in the past five quarters as well.

Additionally, Suntec REIT announced that it is proposing to acquire one-third interest in Marina Bay Financial Centre (MBFC). The purchase price is $1,495.9 million inclusive of an income support of $113.9 million over 60 monthsThe REIT has not determined the method of funding and will announced in due course. Fig 1. Revenue breakdown ($’m) vs occupancy breakdown (%)