In a report released today, Jonathan Koh from UOB Kay Hian maintained a Buy rating on Elite Commercial REIT (MXNU – Research Report), with a price target of £0.35.
Jonathan Koh has given his Buy rating due to a combination of factors that highlight Elite Commercial REIT’s strategic growth and financial stability. The REIT has successfully reduced its leverage, lowering its aggregate leverage by 6.6 percentage points year-over-year to 43.4%, which positions it well for future growth initiatives. Additionally, the management’s plan to divest the Peel Park site is expected to further reduce gearing and potentially provide a special dividend to shareholders.
Elite Commercial REIT has also demonstrated discipline in asset management through positive rental reversions and strategic divestments. The REIT achieved a 30% rental increase for Dallas Court and a 5% increase for Theatre Buildings, while also extending the lease for Dallas Court by 10 years. Furthermore, the REIT’s asset recycling strategy has resulted in divestments at a premium to valuation, enhancing financial flexibility. With a focus on repositioning assets like the Peel Park site for high-value redevelopment, Elite Commercial REIT is poised for sustainable growth, making it an attractive investment opportunity.