Keppel Land: JPMorgan retains Neutral rating but raises target price to $4.70 from $3.65, incorporating higher underlying property valuation assumptions & hiking RNAV by 28% to $6.12/share from $4.85. Notes upgrades prompted by proposed asset swap with 45.4%-owned K-Reit but sees few catalysts for outperformance esp when there are now more alternatives for exposure to the Spore office sector.
Highlights S-Reits such as Suntec offering FY11E yield of 6.0% or active developers such as OUE now have greater exposure to Spore office sector than KepLand (down to 32% of asset value after completion asset swap). House prefers developers, Reits with retail exposure such as CapitaMalls Asia, CapitaMall Trust.
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