SuntecREIT: To acquire 51% stake in Harmony Partners Invt Ltd (HPIL) for $114.8m.HPIL currently owns a 80% stake in Suntec Singapore Intl Convention & Exhibition Centre (Suntec Singapore) which will effectively raise Suntec REIT’s stake in the convention centre from current 20% to 60.8%. Suntec Singapore is valued at $400.0m and a 40.8% stake is approx $163.2m. The acq will be funded through borrowings which is expected to increase aggregate leverage to 41.6%.
The REIT’s DPU is expected to increase 1.2% and acq is synergistic to the REIT’s existing portfolio due to potential AEI works. Co has expected yield of 7.3% for FY2011. Citi maintains Buy at TP$1.70. Deutsche maintains Hold with TP$1.62 and JPM maintains Overweight at TP$1.65
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