KLCC (5235SS) : Research house maintains ‘hold’ call on KLCC Property
KLCC Property Holdings Bhd
(Dec 16, RM6.66)
Maintain “hold” with a target price (TP) of RM6.90: KLCC Property organised a visit to two of the buildings in its portfolio, Menara ExxonMobil and Menara 3. Both buildings are located in the vicinity of Kuala Lumpur City Centre (KLCC). After the tour of the offices, the company hosted a lunch session at the nearby Mandarin Oriental Hotel where we had the opportunity to discuss with the management the outlook for the company. The visit gave us an opportunity to see the interior of the two office buildings while KLCC Property’s management gave us insight into the general operations of the buildings.
We were pleasantly surprised that the Menara ExxonMobil building still looks relatively new and well maintained despite being almost 20 years old. The building, which is fully tenanted by ExxonMobil, was built in 1996. The tenancy will be expiring in 2017. We understand that negotiations on the next term of tenancy have already started between the two parties. From our discussions with management, we believe that the new agreement is likely to be a long-term agreement as well. During our tour of the Menara 3 building, we noted that the modern interior of the building was completed in 2011.
We maintain our “hold” call on KLCC Property although we note that in the current market conditions, real estate investment trusts could provide a safe haven for capital preservation given its stable dividend yields. Our dividend discount model-based TP is maintained at RM6.90. — CIMB Research, Dec 16
http://www.theedgemarkets.com
KLCC Property Holdings Bhd
(Dec 16, RM6.66)
Maintain “hold” with a target price (TP) of RM6.90: KLCC Property organised a visit to two of the buildings in its portfolio, Menara ExxonMobil and Menara 3. Both buildings are located in the vicinity of Kuala Lumpur City Centre (KLCC). After the tour of the offices, the company hosted a lunch session at the nearby Mandarin Oriental Hotel where we had the opportunity to discuss with the management the outlook for the company. The visit gave us an opportunity to see the interior of the two office buildings while KLCC Property’s management gave us insight into the general operations of the buildings.
We were pleasantly surprised that the Menara ExxonMobil building still looks relatively new and well maintained despite being almost 20 years old. The building, which is fully tenanted by ExxonMobil, was built in 1996. The tenancy will be expiring in 2017. We understand that negotiations on the next term of tenancy have already started between the two parties. From our discussions with management, we believe that the new agreement is likely to be a long-term agreement as well. During our tour of the Menara 3 building, we noted that the modern interior of the building was completed in 2011.
We maintain our “hold” call on KLCC Property although we note that in the current market conditions, real estate investment trusts could provide a safe haven for capital preservation given its stable dividend yields. Our dividend discount model-based TP is maintained at RM6.90. — CIMB Research, Dec 16
http://www.theedgemarkets.com
