K-REIT Asia (K71U.SG) off 0.7% at $1.41 on light profit-taking after run-up late last week to more than 2-year high of $1.44. REIT one of best performers in Singapore this year, +29.1% so far in 2010 vs STI +9.8%, FTSE ST REIT Index +9.9% over same period.

Interest in K-REIT driven largely by optimism over Singapore office market’s recovery, with landlord’s recently proposed $1.43 billion acquisition of one-third stake in phase 1 of Marina Bay Financial Centre further boosting sentiment.

But having outperformed market this year, some analysts say valuations no longer attractive. CIMB, which has Underperform call with $1.43 target, says K-REIT trades at just 5.2% FY11 DPU yield vs 6.9% for Suntec REIT (T82U.SG); “We believe that the positives have been priced in.” Initial support at 30-day moving average, last at $1.38.