- We upgrade Lendlease REIT to BUY from HOLD with a target price of S$0.69. Our upgrade is underpinned by falling interest and risk-free rates, resilient Singapore retail sales and ongoing capital management, leading to lower gearing.
Conducive macro.
- - Read this at SGinvestors.io -
- Meanwhile, GDP growth will be resilient at 3.2% this year and 2.0% next year.
- - Read this at SGinvestors.io -
Positive capital management trend.
- In Aug, LREIT proposed divestment of Jem office for S$462m, in line with valuation. While this is 2.2% dilutive to DPU and 1.3% to NAV on a pro-forma basis, it will strengthen the capital structure by lowering gearing to ~35.0% from 42.6% and position LREIT for future growth. The REIT’s strategic focus is Singapore with future collaboration with sponsor to explore M&As with growth potential and opportunistic non-core disposal.
Upgrade to BUY.
- Read more at SGinvestors.io.
