Keppel REIT: Divesting 77 King Street office tower in Sydney for A$160m ($158m), or 27% above last valuation of A$126m.
Located in Sydney’s CBD, the 147,000 sf NLA building was acquired in end-2010 for A$116m. Post-sale, Keppel REIT is expected to reap a divestment gain of A$28m.
While pro forma DPU will be shaved by 1.8% to 7.1¢, the divestment will help deleverage Keppel REIT's balance sheet from 43.3% to 42.1%, addressing a key area of investor concern.
Keppel REIT will be reporting its full year results after market close today, and analysts will be assessing if the REIT would be able to hold up occupancy rates at its office assets, particularly at Marina Bay Financial Centre amid challenging market conditions.
Maybank-KE last had a Hold rating with TP of $0.90 on the counter.
At the current price, Keppel REIT trades at 3Q15 annualised yield of 7.6% and 0.64x P/B.
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