Brokers' take

Keppel Reit > Buy Close: S$1.145 Target price: S$1.23 DBS Group Research, June 30

Keppel Reit announced that it has entered into an agreement to purchase a 50 per cent interest in a premium office tower that will be developed at 311 Spencer Street, Melbourne, Australia. We understand the vendor is Australia Post.

We are positive on the expected distribution per unit (DPU) accretion in the medium term and the good cashflow visibility provided by the property given the 30-year lease and in-built rental escalations. However, this is balanced against some near term dilution to DPU.