Stock Name: KepLand
Company Name: KEPPEL LAND LIMITED
Research House: DBS Vickers
Company Name: KEPPEL LAND LIMITED
Research House: DBS Vickers
Keppel Land (K17.SG) is +1.7% midday at $4.16, after it Sunday says its property fund management arm and NTUC agreed to buy Capital Square for $889 million or $2300 psf, with each taking a 50% stake.
DBS Vickers, which has a Buy call and $5.09 target, estimates gross rent to average of $9-$10 psf pm, translating to gross/net yield of 5.2%/4.0% respectively, “in line with some of the recently transacted office cap rates of between 3.8% to 4.0%.”
DBS Vickers, which has a Buy call and $5.09 target, estimates gross rent to average of $9-$10 psf pm, translating to gross/net yield of 5.2%/4.0% respectively, “in line with some of the recently transacted office cap rates of between 3.8% to 4.0%.”
It says that with the transaction, values of nearby properties such as Ho Bee’s (H13.SG) strata space at Samsung Hub and K-REIT’s (K71U.SG) Prudential Tower are also likely to benefit.
“Commercial landlords will continue to benefit from the strong recovery in capital values...with office rents still some way below their recent peak, we believe a lack of policy overhang and robust fundamentals points to the potential for a faster reflation in commercial landlords’ RNAVs in the medium term.” The house prefers UOL (U14.SG), rated Buy with a $5.31 target.
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