AffinHwang downgrades IGB REIT to Add, target price RM1.34

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KUALA LUMPUR (Oct 30): AffinHwang Capital Researh had downgraded IGB REIT Bhd at to Add (from Buy) at RM1.30 with an unchanged target price of RM1.34 and said IGB REIT’s 9M14 realised net profit of RM176.4 million (+14.6% y-o-y) and accounted for 81% of house estimate of RM217.6 million and 80% of consensus estimate.

In a note Thursday, the research house said the 9M14 gross rental income grew by 4.5% y-o-y, driven by tenancy renewals, i.e. 33% of Mid Valley Megamall (MVM)’s NLA and 54% of The Gardens Mall (TGM)’s NLA saw a +15% revision  in rates last year.

“We downgrade our Buy rating to Add as upside potential has narrowed.

“Our DDM-derived 12-month target price of RM1.34 remains unchanged,” it said.