Sabana REIT: Announced that its CFO, has resigned and left the company to pursue his personal interests (Potentially seen as a Red Flag), replacement is Ms Tan Chiew Kian, who was previously the CFO of Singapore Medical Group and Sembawang Kimtrans …..
UOB Kay Hian note that with change of senior executive so soon after the Co’s listing, foresee possible execution delays in Co. obtaining its credit rating and announcing initial acquisitions. House however do not foresee direct impact to REIT’s portfolio as properties will remain under care of the trustee. Sabana’s rentals for the first 3 years of operations are also protected by master-lease agreements with locked-in rentals…..
Add that div yield of 9.2% is both attractive and a hurdle. REIT’s current div yield of 9.2% provides downside support for its share price but would also make it difficult for Co. to acquire further properties on a yield-accretive basis. Sabana’s div yield is also 110bps above current average industrial S-REIT yield of 8.1%, implying a 14% upside in the share price just from reversion to mean. House maintains Buy with $1.15 TP.
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