Suntec REIT asset enhancement initiatives "making good progress"

SCM's Phase 2 approaching 85% pre-commitment.

Suntec REIT is currently performing renovation works to Suntec City Mall's Phase 1 and Phase 2, and everything points to the company completing all the works by 4Q14, said Maybank Kim Eng.

Pre-commitments for both phases have also been robust.

"Pre-commitments for Phase 1 leases in 2Q13 hit 99.6% (96.7% in 1Q13) with average passing rent of S$13.09 psf/mth. Suntec also reported that 70.1% of Phase 2 NLA in 2Q13 has been pre-committed (prev. qtar 53%). We think pre-commitments for Phase 2 should hit at least 85% in 3Q13. Looking at the intensity of the refurbishment works, overall AEI is making good progress and works should wrap up as scheduled by 4Q14," said Maybank.

The research firm also foresees "modest" rental uplift last quarter given that Phase 1 new tenants, which enjoyed rent-free periods during the renovations, should have resumed rental payments already.