Healthy financials: Gearing remains healthy at 30.2 per cent, well below the optimum level of 45 per cent. With no major refinancing needs till 2013, the group is in good financial position to make further acquisitions.
We maintain our ‘buy’ call, TP of $0.73. The improving office outlook and stabilised retail market should lead to further improvement in its Singapore portfolio that represents 60 per cent of its total revenue. We see relative value in SGReit with the stock trading at 0.7x P/BV and offering forward FY2011-2012 yields of about 6.9-7.3 per cent.