Company Name: K-REIT ASIA
| Research House: Maybank Kim Eng | Price Call: HOLD | Target Price: 0.99 |
Maybank Kim Eng upgraded K-REIT Asia, which owns commercial buildings, to ’hold’ from ’sell’ and raised its target price to $0.99 from $0.83, citing steps the trust took to improve unitholders’ returns.
By 10:57 a.m., units of K-REIT were flat at $1.075, and have gained about 29.6% since the start of the year, compared to the FT ST Real Estate Investment Trust’s 18% rise.
Maybank said a move by K-REIT to convert a vehicle to limited liability partnership from private limited company will result in greater tax transparency and estimated annual tax savings of $2.2 million to $5.2 million for 2012-2015, leading to higher distributions to unitholders.
K-REIT also acquired additional 12.4% stake in Ocean Properties, bringing its interest to 99.9%.
As a result, Maybank has raised its distribution per unit estimates for K-REIT by 6-12% for 2012-2014.
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