Results in line with expectations. Q2 bottomline came in at minus $251.8m despite a 23% improvement in revenue to $271.5m due to a $526.1m revaluation deficit take on its investment properties. Otherwise, earnings would have been a positive $63.1m, up 33% yoy.

Lifted by higher rental and residential contributions. The group continued to enjoy the positive earnings momentum from the progressive billings from residential projects such as Park Natura, One Amber and Sixth Avenue Residences (+41% yoy) as well as higher rental income, largely from Singland’s office portfolio (+20% yoy). These two segments accounted for c90% of UIC’s gross profit. This helped to offset poorer hotel contributions from Pan Pacific Singapore.

As with Singland, the bulk of UIC’s asset backing is exposed to the office segment. While the pace of deceleration in office rentals has slowed, there does not appear to be any near term catalyst. Underpinning earnings over the next two years would be residential contributions and a resumption of a positive Revpar growth trend for the group’s hotel operations.

UIC is currently trading above our RNAV and target price estimates, after marking the value of Singland to its target price and imputing a redevelopment surplus for UIC Building. At the current price, we believe Singland offers a cheaper exposure for investors. Maintain fully valued with TP of $1.50.