Revenue grew by 4% to $86.2m but net profit surged 117% to $73.2m due to higher rental income, better associate contributions and one-off $26.4m writeback of deferred income tax from lower effective tax rate of 17%. Excluding this, bottomline would have been largely in line. Rental contributions were boosted yoy by positive rental reversions as average passing rents are still low. This more than offset lower hotel contributions, which were affected by reduced occupancy, room rates and F&B income. Residential billings from Sixth Avenue Park and One Amber lifted associate income.

Pressure on office rents to continue on weak outlook. As such, the reversion gap in Singland’s properties would continue to narrow. Upcoming departure of tenant Citigroup from its Tampines Bldg would also create further earnings vacuum. Slow tourist arrivals would mean drag on hotel contributions.

Maintain Hold with TP of $3.76. About 80% of Singland’s RNAV is exposed to the office sector. With the weak office leasing outlook, there is unlikely to be near term catalyst. However, with a low gearing of 13.6% and relatively stable operating cashflow, dividend yield of 5.4% is likely to be sustained. Our TP of $3.76 is based on a 40% discount to RNAV of $6.27.