SG Reits: Credit Suisse has sector report. Note that S-REITs emerge with stronger balance sheets post subprime crisis and SIBOR likely to stay low till mid-2012. S-REITs are unlikely to face refinancing issues if the Euro crisis worsens and could also stretched their debt expiry profile to avoid lumpy refinancing…..
House continue to like the office (CCT, KREIT), hospitality (CDLHT) and retail (CMT, MCT) REITs for their attractive yields (5.5-6.5%), double-digit DPU growth and exposure to strong SGD.
ARA Asset: IIFL reiterate Add with TP $1.90. Note that the investment period of ARA’s Asia Dragon Fund I (ADF I) will end in 2012 and ARA could look at divesting the fund’s assets from 2013. If all assets under ADF I are divested in 2013, that ARA could gain incremental revenue of $65m, which would boost 2013 profit estimate by 47%.....
Add that ARA’s private funds have recently made mall acquisitions in Msia and believe this could lead to the listing of a retail REIT in Malaysia with a potential AuM of YR1.0b-1.5b ($400m- 600m). Expect AuM to reach $20b by FY12 (without the listing of any new REIT). Medium-term growth catalysts are raising US$1.1b of committed capital for ADF II; and acquisitions and impending asset revaluations by existing REITs.
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