KepLand - RBS raises Keppel Land target to $5.20; keeps Buy

Stock Name: KepLand
Company Name: KEPPEL LAND LIMITED
Research House: RBS

RBS raises Keppel Land (K17.SG) target price to $5.20 from $4.70; keeps Buy rating, says Dow Jones. 

Says divestment of Marina Bay Financial Centre at 20% higher price than expected ($1.4 billion) while Keppel Towers, GE Tower site it's buying in asset swap with K-REIT Asia (K71U.SG) should benefit from Singapore-Malaysia land swap as buildings in area expected to be rejuvenated after swap. 

“The bundled deal could add 42 cents to Keppel Land's RNAV...while the gearing reduction should enable Keppel to acquire more NAV-accretive residential and office land bank.” Says $321 million net gain from deal, cash proceeds of $812 million will reduce gearing to 0.5% from 22%, “giving it a debt headroom for S$1.1 billion for acquisitions assuming 20% gearing.” 

Adds, Keppel Land could take advantage of fall in residential land prices, may also buy more land for office development next year to beef up its office portfolio. RBS remains positive on Singapore prime office, which accounts for 51% of KepLand's RNAV. 

Shares +1.9% at $4.19.