Keppel Reit

Keppel Reit: StanChart raises to Outperform from inline, lifts TP by 15% to $1.64. Estimates K-Reit’s free float to rise to $1.7b on 8 May, when KEP distributes 367m K-Reit units as dividends-in-specie to its sh/h. Expects K-Reits free float to rise to $2.2b (55%) in the next 12 mths if KEP sells its remaining c.12% stake. This could double K-Reit’s liquidity to $10m/day. Also K-Reit could be included in the FTSE EPRA/NAREIT indices after 8 May. Separately. StanChart expects Grade A rents to rise 13% pa over 2014-16. Sees K-Reit as the key beneficiary with its concentration of Grade A office assets (74% by portfolio value). Tips the potential acquisition of MBFC Tower 3 as a catalyst to lift its high quality office asset exposure.