Back to Suntec REIT which has AUM of around $12.2 billion as at end-Dec 2023. RHB believes that internalising the manager could narrow the discount between its unit price (around $1.11) and the NAV of $2.10 as at end-Dec.
Out of the blue, RHB Bank Singapore says it sees strong merits in internalising Suntec REIT’s manager “due to its unique positioning of differing asset class focus and strengths compared to its Sponsor, high free float and low sponsor stake, and its large size with high quality assets”.
As a point to note, Suntec REIT is relatively large compared to that other REIT which activist hedge fund Quarz Capital Asia is attempting to internalise without having an EGM to change the trust deed. Internalised REITs need to have an adequate size to enable its internalised manager to reap economies of scale, according to RHB. Notably, even Link REIT, Asia’s largest, is looking to get a slice of management contracts to add to its fee related income.
