- Maintain BUY on Keppel REIT (SGX:K71U) with unchanged estimates and DDM-based target price of S$1.00 on an attractive 6.7% dividend yield and 40% discount to book.
Acquiring ‘down under’
- - Read this at SGinvestors.io -
- Keppel REIT's announcement dated 1 Apr 2024.
- The office building has 93% committed occupancy with an average lease to maturity of 6.8 years mostly tenanted to government agencies and a financial institution.
- The initial NPI yield exceeds 6%.
- Funded with a mix of AUD and S$ debt, pro-forma DPU accretion will be 1.4% with a higher gearing of 41%.
Tapping flight-to-core trend
- - Read this at SGinvestors.io -
- It counts the Australian Taxation Office and the Bank of Queensland as top two tenants accounting for ~87% of the NLA and has a long WALE of 6.8 years. The building has committed occupancy of 93%.
- The vendor is providing a rent guarantee for existing vacancies and potential expiries. About ~13% of the purchase amount consists of such guarantees, capitalized rent incentives or abatements and committed capex.
Strategic and financial merits of the deal
- Read more at SGinvestors.io.
Above is the excerpt from report by Maybank Research.
Clients of Maybank Securities may be the first to access the full report in PDF @ https://www.maybanktrade.com.sg/.
Krishna Guha Maybank Research | https://www.maybank-ke.com.sg/ 2024-04-02
Read also Maybank's most recent report:
2025-01-31 Keppel REIT - Robust Operations, Elevated Gearing Unchanged.
Previous report by Maybank:
2024-10-22 Keppel REIT - Holding Ground.
Price targets by 3 other brokers at Keppel REIT Target Prices.
Listing of research reports at Keppel REIT Analyst Reports.
Relevant links:
Keppel REIT Share Price History,
Keppel REIT Announcements,
Keppel REIT Dividend Payout Dates & Corporate Actions,
Keppel REIT News
