According to the analyst, First REIT’s risk profile has improved due to the adoption of several strategies adopted. This includes lower reliance on collecting rental from PT Lippo Karawaci Tbk (LPKR) as its Siloam properties became a direct counterparty to each of the LPKR master lease agreements (MLAs) and increasing assets under management (AUM) in developed markets to over a quarter of its portfolio through the acquisition of nursing homes in Japan.
SAC Capital analyst Yeo Peng Joon has initiated coverage on First Real Estate Investment Trust (First REIT) (SGX:AW9U
) with a “buy” call as he sees the counter offering sustainable dividends per unit (DPU) with an improved risk profile.
In his report dated March 31, Yeo has given the REIT a target price of 30 cents, pricing First REIT at a 0.8x price-to-book value ratio (P/Bv) and distribution yield of 9.3% for FY2023.
