MIDF Research uprades IGB REIT to Buy, raises target to RM1.46

KUALA LUMPUR (March 26): MIDF Research has upgraded IGB REIT to “Buy” (from Neutral) with a higher target price of RM1.46 (from RM1.41) and said IGB REIT had the highest dividend growth among peers in FY14 due to good cost control.

In a note today, MIDF Research said IGB REIT will reconfigure additional 40,000 sq ft of net lettable area (NLA) in Mid Valley Megamall (MVM) to improve rental revenue.

MIDF Research expects a marginal rental reversion of +2.5% this year.

“Strong occupancy rate for MVM and The Garden Malls likely to sustain. We have imputed in a blended occupancy rate of 98.9% for both FY15 and FY16.

“Minimal impact from any interest rate rise as 98% of its loans are in fixed rate.

“Earnings forecast raised by 2.8% for FY15 after factoring in additional 40,000 NLA in MVM. Upgrade to Buy with a higher target price of RM1.46,” it said.