Sabana REIT: HSCB initiates on co with Overweight at TP$1.12 citing robust cashflow and attractive valuations. HSBC highlights good location of all 15 industrial assets with high quality tenant profile with sponsorship by Freight Links and an experienced mgmt team. Furthermore co has alternative funding sources in the Islamic mkts where other firms are unable to tap on, once a credit rating is secured…
Even projecting flattish DPU over nxt 3 yrs, Sabana trades at 10-12% discount to valuations. Downside risks include lease defaults by master lessees, difficulty in compliance to Shari’ah regulations and interest rate risks. At current price of $1.00, Sabana’s projected yield is approx 8.6%.
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