MLT

MLT: has agreed to divest its property at 30 Woodlands Loop to Advanced Holdings for $15.5. The transaction is expected to be completed by May 2013. Advanced Holdings intends to utilize the property for its own use, housing all operations of the Group, which also allows it to cater for future expansion. The pricing is attractive at a 41% premium to the last valuation with an expected divestment gain of $4.95m. This is in line with mgt’s strategy to optimize returns through proactive asset management. This provides MLT with greater financial flexibility to pursue other attractive investment opportunities offering better yield. Mgt intends to distribute the divestment gain (0.2ct/sh) to unitholders, subject to tax clarification with IRAS. Deutsche likes MLT’s geographically well-diversified portfolio skewed towards long leases which should underpin earnings stability, with potential upside from acquisitions. Forward yield of 5.9% is attractive, implying 435bps spread. The house reiterates its Buy rating and TP $1.29.