CIMB ups K-Reit Asia target to $1.52, keeps neutral

Stock Name: K-REIT
Company Name: K-REIT ASIA
Research House: CIMB

CIMB Research has raised its target price for K-Reit Asia (KASA.SI) to $1.52 from $1.50 and maintained its neutral rating after the property trust bought another four floors of an office building.

K-Reit is managed by property developer Keppel Land (KLAN.SI).

CIMB raised its distribution per unit estimates by 1-2% for 2011, 2012 and 2013 to reflect K-Reit’s acquisition of four office levels at Prudential Tower in Singapore’s central business district for $125.1 million. 

However, CIMB noted that with a purchase price of $2,430 per square foot for the office space, the estimated initial yield of 2.9-3.1% is lower than market yields.

At 9:24 a.m., K-Reit units were trading 0.78% lower at $1.28. The units have fallen 9.2% since the start of the year.