Vested. From DMG:-
Saizen REIT: FY08 In Line With IPO Prospectus’ Forecast (Unrated\S$0.55)
Brandon Lee (62323891,
[email protected])
Saizen REIT (SZR), a Japan-based residential REIT with
166 properties across 13 Japanese cities, posted FY08 DPU of S$0.0467, which was in line with its IPO prospectus’s stated forecasts.
Topline jumped 87.2% YoY to JPY3.6b, mainly attributable to a
64.4% increase in the number of properties under management. However, on the back of property revaluation losses, one-time IPO expenses and forex losses,
SZR posted a net loss of JPY3.7b, as compared to FY07’s net income of JPY2.1b.
Looking ahead for FY09, management foresees continued tightness within the credit markets, accompanied by a stifled Japanese real estate arena. Although the emergence of attractive investment opportunities cannot be ruled out, SZR should be placing
emphasis on loan refinancing and establishment of banking relationships, in lieu of more acquisitions. As such,
we guess that FY09 DPU should remain flat, as any organic upside from improving its portfolio occupancy (currently 91.4%) could be mitigated by a spike in financing costs.
Along with the broad market sell-off, SZR has fallen 38.2% YTD, and its current unit price of S$0.55 is still a far cry from its IPO price of S$1.00. Based on SZR’s FY07 DPU of S$0.0467, it is currently trading at a
yield of 8.5%, against a market-weighted 7.8% of S-REITs. At the moment, we do not have a rating for SZR, but the counter is under our SGX Scheme’s coverage of stocks.
Source: DMG & Partners Securities Pte Ltd
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