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Maybank IB Research downgrades AmanahRaya REIT to hold

KUALA LUMPUR (May 22): Maybank IB Research has downgraded AmanahRaya REIT (ARREIT) to Hold with a target price of 95 sen.

It said ARREIT's 1Q12 results, which will be released by Wednesday, were likely to be subdued with an expected year-on-year decline in earnings mainly due to the loss of rental income at Wisma UEP since Jul 2011 and higher refurbishment costs.

In a note Tuesday, the research house said near-term catalysts could come from: 1) the sale of the Wisma UEP building in Subang Jaya and 2) new acquisitions.

"We maintain our forecasts and 95 sen target price for now. ARREIT is fairly valued at the current price (7.9% gross yield)," it said.

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