K-REIT

K-REIT: Results in-line, NPI at $32.8m, +84.7%, while DPU at 1.97c, +40.7%. Strong YOY performance was largely attributed to contributions from OFC. At current price, grp trades at approx. 5.6% yield and 1x P/B. Mgt note that demand for prime Grade A offices looks relatively more favourable, and is evident from the improved occupancies across its portfolio, led by tenants from legal, natural resources and insurance. Going forward, mgt note that OFC Phase 2 (retail and car park podium) and 8 Chifley Square are on track to be completed by 3Q13. Mgt has also attained approval for the OTB site in Perth (acquisition is expected to be completed by 1Q13). We note that while grp’s gearing at 42.9% is relatively high, this is offset of a 4.8x interst coverage, while grp’s portfolio occupancy rate was at a strong 98.5%. Grp believe KREIT is still the best proxy for the SG Grade A office Ratings as follow: CIMB maintains neutral with $.33 TP CS maintains neutral with $1.32 TP SCB maintains In-line with $1.37 TP Deutsche maintains Hold with $1.38 TP UOB Kay Hian maintains Buy with $1.57 TP