STOCKS NEWS SINGAPORE-K-REIT Asia up on Ocean Fin stake hike

Last Updated: Tue, Jun 26, 2012 01:50 hrs

Units of K-REIT Asia, a real estate investment trust managed by Keppel Land, rose as much as 3.4 percent to a 9-month high after it said it raised its stake in a Singapore office property to nearly 100 percent.

By 0123 GMT, K-REIT Asia units were 2.4 percent higher at S$1.05, with 426,000 units traded, compared to its full-day average of 589,800 over the last five sessions.

K-REIT said on Monday it will buy 12.39 percent of the partnership that owns Ocean Financial Centre, raising its stake to 99.9 percent.

The acquisition price works out to S$261.6 million or about S$2,380 per square foot of net lettable area, net of rental support of S$24.1 million.

CIMB Research increased its target price for K-REIT Asia to S$1.17 from S$1.14, and kept its outperform rating to factor in the accretion from the purchase.

"We are net positive on K-REIT's acquisition...with increased control and good placement price outweighing slight negatives from higher asset leverage," CIMB said in a report.

0925 (0125 GMT) (Reporting by Charmian Kok in Singapore; Editing by Sunil Nair)

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