Research houses put 'hold' recommendation on Hektar REIT

KUALA LUMPUR: CIMB Research and AmResearch have put a "hold" recommendation on Hektar REIT.

CIMB Research said as a pure retail REIT, Hektar REIT stands to benefit from the improving retail sector outlook in Malaysia.

In its research note, CIMB Research said it is projecting gross yields of eight to nine% for Hektar REIT for the financial year 2011-2013, supported by rental reversion, annual step-up rates and asset enhancement initiatives.

AmResearch meanwhile, said while the REIT is fundamentally sound, the "hold" rating is mainly premised on the lack of newsflow on the asset acquisition front.

"Hektar has identified a few assets to be injected into the REIT but no deal has been concluded," AmResearch said.

AmResearch downgraded the rating on Hektar REIT from "buy" to "hold".

"We are cautious about the competition faced by its main asset, Subang Parade,which provided 51% of the portfolio’s net operating income (NOI) last year," it added. — Bernama