K-Reit

K-Reit: The Australian reported today that KREIT could be a frontrunner for a stake in a Perth CBD office project. Mirvac Group’s 50% stake in the Old Treasury Building, a 33k sm NLA redevt project with a committed 25-year lease with the Australian Govt, is understood to be receiving strong interest from institutional investors and global pension funds. KREIT, which currently owns stakes in a Brisbane office and two Sydney offices (one with Mirvac), is also reported to be looking at another office building in the Perth CBD according to industry sources. KREIT is currently geared at 43.9%, the highest among SREITs, after it acquired an additional 12.4% stake in Ocean Financial Centre late last month. If this acquisition in Perth materialises, StanChart expects KREIT to sell an asset to keep gearing low, potentially an Australian asset. The house has an In-Line rating with TP $1.09.