SINGAPORE (Nov 24): Shares of Sabana Shari'ah Compliant REIT have fallen more than 20% so far this year amid concerns about a bulk of expiring master leases.

But UOB Kay Hian says even assuming a 50% drop in occupancy rate and 30% fall in rents on rental renewal, the Singapore-listed real estate investment trust still offers a healthy 7% yield.

The research house says the lack of clarity over nine expiring master leases are due for renewal on Nov 26 has resulted in a sharp share-price correction, but investors’ wariness over efforts to renew the company’s expiring leases may be overdone, presenting opportunity as negatives are factored in.

UOB Kay Hian is keeping its buy on the stock with a target of 92 cents.

Units of the REIT are trading at 73 cents.