DBS Vickers has raised its target price for Soilbuild Business Space REIT (SBREIT) to 95 cents from 91 cents and maintained its “buy” rating on the trust following its reporting of better operational performance in 2QFY2015.
SBREIT’s 2QFY2015 distribution per unit of 1.615 cents was in line with its expectations, was in line with DBS Vickers’ expectations.
The brokerage said in a July 16 research note that it was locking forward renewals of expiring leases. It also expected SBREIT’s performance to remain stable as the manager is actively managing leasing risks.
SBREIT has 11.8% of its net lettable area of nearly 413,000 sq ft left to be renewed in 2HFY2015. The expiring rental levels are lower than current market rates but the brokerage is expecting SBREIT to take a defensive strategy to maintain occupancy rates rather than hike rents. “We are maintaining our 3-5% rental reversion forecasts,” it said.
DBS Vickers said SBREIT is reviewing third party opportunities to grow its portfolio. A medium term target could be the acquisition of a light industry property at 566 Bukit Batok St. 23 which was expected to be completed in 1QY2015.
With a gearing of around 36%, the SREIT has room to raise only $50 million in debt to fund its acquisitions which would take its gearing to 40%. “Thereafter, we believe an equity fund-raising could be needed to partly fund any further meaningful acquisition opportunities,” the brokerage said.
SBREIT was trading flat at 87 cents as at 10:57a.m.
Click Here To Register For Free Trial Services
OR
Give A Missed Call : +6531581402
Follow Us On Twitter : www.twitter.com/epicresearchsg
Like Us On Facebook : www.facebook.com/EpicResearchSingapore
Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg 
0 comments:
Post a Comment