25 April 2012
CIMB Research said Sunway REIT's existing portfolio of 11 assets and stable occupancies should ensure steady dividend yields, target price RM 1.41 (Outperform)
(SUNREIT opening stock price today (25.4.2012) was RM 1.25)
CIMB Equities Research initiates coverage on Sunway REIT with an Outperform call and a DDM-based target price of RM1.41,using a 2% terminal growth rate and an 8.2% cost-of-equity assumption.
“Our target price implies a total return of 18% against implied upside of 1.8% to our end-2012 KLCI target of 1,610 and 5% market yield,” it said on Wednesday.
CIMB Research said Sunway REIT's existing portfolio of 11 assets and stable occupancies should ensure steady dividend yields.
“With a ready pipeline of acquisitions (ROFR for seven assets valued at RM3bil), it is well-poised for growth. Potential rerating catalysts are 1) yield-accretive acquisitions, 2) upward rent reversions, with 63% of Sunway Pyramid's NLA due for renewal next year, 3) further asset enhancement initiatives, and 4) higher-than-expected rentals from Sunway Putra Place after its refurbishment,” it said.