Macquarie upgrades K-REIT Asia (K71U.SG) to Outperform from Neutral, lifts target price to $1.38 from $1.05 after raising FY12-15 DPU estimates by 7%-16% to reflect higher rental assumptions from 2012, says Dow Jones.

"K-REIT is a beneficiary of our upgraded office outlook," says Macquarie.

Research house notes 85% of its portfolio comprises Singapore office assets. Adds pace of office rent recovery stronger than expected, with prime Grade A rents reaching $9.00 psf/month as at 3Q10 after bottoming in 1Q10 at $8.00 psf/month, due to active pre-leasing activity.

Tip Marina Bay Financial Centre, 33%-owned by K-REIT's sponsor Keppel Land (K17.SG), as potential acquisition target in 2011. Price +0.8% at $1.29.