Keppel REIT - RHB Research 2016-01-18: Divestment of an Australian Asset

Keppel REIT - RHB Research 2015-12-02: Aggressively-Leveraged Office REIT KEPPEL REIT K71U.SI 

Keppel REIT: Divestment of an Australian Asset 

  • Keppel REIT (KREIT SP) announced its divestment of 77 King Street Tower for AUD160m, booking in a divestment gain of AUD28m, translating to an implied cap rate of 6.4%. 
  • Given that office cap rate in Sydney ranges from 6.0% to 6.5%, we think that the price of the divestment is within reasonable range. 
  • According to the management, the REIT intends to use the sales proceeds to repay its existing debt. 
  • In addition to this, we think that it is also the manager’s intention is to reduce its high gearing of 43.3% to 42.1%. 
  • We maintain SELL of TP of SGD0.83.



Ivan Looi RHB Securities | Ong Kian Lin RHB Securities | http://www.rhbgroub.com/ 2016-01-18
RHB Securities SGX Stock Analyst Report SELL Maintain SELL 0.83 Same 0.83


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