CMA: acquired the remaining 73.7% stake in 3 retail assets in Japan (La Park Mizue, Izumiya Hirakata, Coop Kobe) for a total of ¥9.7b ($160m) from its Japan fund. The acquisition price reflects a 16.9% discount to Dec ’11 valuations, with combined NPI yield of ~7.6%, comparable with the 7-8% range for suburban shopping centres, and the 6.5% cap rates for Japan retail Reits.
Mgt indicated the acq will contribute an additional $8m to net profit on an annualized basis, or 4% of FY12 recurring net profit. The transaction will be funded by borrowings, which would raise FY12E gearing from 28.4% to 30.9%, by Deutsche estimates.
Mgt believes that pricing for the assets are reasonable at current mkt conditions and believes in potential upside for capital value whilst having stable cash yield in the near term.
Given the size of the transaction (2% of total asset on balance sheet), JPM does not see significant share price impact.
Deutsche keeps at Buy with TP $1.62.
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