SG Morning Highlights | Keppel Reit to Acquire 50% Interest in Sydney Office Building for A$363.8 Million

Singapore shares opened higher on Monday. The $FTSE Singapore Straits Time Index(.STI.SG)$ rose 0.12 percent to 3,227.77 as at 9.05 am.

$Keppel Reit(K71U.SG)$: Keppel Real Estate Investment Trust has agreed to acquire a 50% interest in a freehold Grade A office building in Sydney's central business district for A$363.8 million (S$321 million). The remaining interest in the property at 255 George Street will continue to be held by the seller, Mirvac Funds Management Australia Limited, as trustee of Mirvac Wholesale Office Fund I. The property is expected to generate a first-year yield that exceeds 6% and distribution per unit accretion of 1.4% on a pro-forma basis. The building has a total net lettable area of 38,996.8 square metres, including 38,805.0 square metres of office space and 191.8 square metres of retail space, as well as 188 car park lots. The acquisition builds on Keppel Reit's existing partnership with Mirvac, as they already jointly own 8 Chifley Square in Sydney and David Malcolm Justice Centre in Perth.

$Sembcorp Ind(U96.SG)$: Sembcorp Energy (Shanghai), a wholly owned subsidiary of Sembcorp Industries, has signed a dual currency-denominated revolving credit facility with DBS (Hong Kong) for offshore funds amounting to 400 million yuan (S$76 million). The facility comes with an initial tenure of three years, as well as a two-year extension option, and is guaranteed by Sembcorp Utilities. The drawdowns from the facility will be used for general corporate purposes including refinancing, capital expenditure, working capital, equity investments, and funding mergers and acquisitions in China. Sembcorp sees China as a key market and continues to see attractive opportunities in the renewables sector. The establishment of the offshore renminbi facility enhances the group's capital base to fund its growth.

$ComfortDelGro(C52.SG)$: ComfortDelGro Corporation Limited has reported its latest annual results, with revenues of S$3.9 billion, in line with analyst forecasts, and statutory earnings per share (EPS) of S$0.083, beating expectations by 4.1%. The latest consensus from eight analysts projects revenues of S$4.04 billion in 2024, implying a credible 4.1% increase on its revenue over the past 12 months, and a 19% increase in statutory EPS to S$0.099. The analysts reconfirmed their price target of S$1.64, showing that the business is executing well and in line with expectations. However, ComfortDelGro's revenue growth is expected to remain slower than the industry, with analysts forecasting an annualized growth rate of 4.1% to the end of 2024, compared to the industry's projected 5.5% growth.