Tuesday, June 21, 2011

** Aims Amp Capital Industrial Reit **

Aims Amp Capital Industrial Reit (AAREIT): Msia’s Axis Reit says Reits in SE Asia are ripe for consolidation with prices rising in certain property segments. Believes there is a need to increase the size of Reits to ensure greater flexibility in trading assets. Notes, with units in a number of Reits trading at a discount to NAV, there is scope for consolidation...

Nevertheless, acknowledges that there are regulatory hurdles, eg. no guidelines for Reit M&A in Msia and the corporate takeover code is insufficient…

Axis Reit trades at 1.2x NAV and could potentially be seeking conciliatory consolidation of smaller industrial M-Reits such as AmFirst Reit at 0.83x P/NAV.
StanChart notes S-Reits such as AAREIT at 0.78x P/NAV could also be potential targets for Axis. House has an Outperform rating on AAREIT with TP $0.23/unit. Stock trades at 9.4% FY11E yield.

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