Fortune Reit: Daiwa upgrades to Buy from Outperform, raises TP to HK$5.37 from HK$5.15; says Fortune's deal to buy two retail properties (Belvedere Garden in Tsuen Wan and Provident Centre in North Point) is "attractive and yield-accretive;" it thinks the current passing rent of these two properties, at HK$16-19/sq ft, is low, vs Fortune's portfolio average of HK$31.8/sq ft. "This means that there should be considerable room for improvement in their achieved rents through asset enhancement initiatives (AEIs) and tenant repositioning." Adds, this deal is the Fortune's first major move after its rights issue in 2009, which "we see as an exercise to boost its equity and asset base significantly to embark on acquisitions."
The counter is up 0.3% at HK$3.78
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