SINGAPORE (June 16): DBS is keeping Soilbuild Business Space REIT at “buy” with an 84-cent target price ahead of an EGM over Soilbuild REIT’s proposed acquisition of the Bukit Batok Connection property for a total of $100.5 million.
Soilbuild REIT is looking at a buy-and-leaseback deal on the property with SB (Westview) Investment.
Lim Chap Huat, who holds 100% interest in SB Westview, is also the controlling unitholder of Soilbuild REIT. Given that the acquisition is regarded as an interested party transaction, an EGM is expected to be convened.
“We have maintained our estimates for now pending the completion of the EGM in 3Q16,” says DBS lead analyst Derek Tan in a Wednesday report. “We believe this transaction will improve the REIT’s earnings visibility and stability at a time where the competitive environment has added pressure to topline and distributions.”
“At an NPI yield of 8.0%, we believe the acquisition is accretive to earnings,” Tan adds.
As at 11.23am, Soilbuild REIT is up 0.73% at 69 cents.
