SINGAPORE (Nov 18): DBS is maintaining its “buy” call on iREIT Global with a revised target price of 77 cents as the research house believes the market has already priced in a liquidity discount and risk of further devaluation of the EUR versus the SGD.

iREIT recently completed the acquisition of a property in Berlin for EUR144.2 million ($218.6 million), which implies 7.1% proforma FY14 NPI yield. Beyond the boost in earnings, the property further diversifies IREIT’s portfolio to five German cities and increases cash flow visibility with weighted average lease expiry (WALE) by gross rental income (GRI) now at about 7 years, up from about 6 years previously.

In a Wednesday report, lead analyst Mervin Song says, “We lowered our DCF-based TP to $0.77 from $0.90 after incorporating the 45-for-100 rights issue at $0.468 per unit and the acquisition of the Berlin property. With an attractive 9.4% FY16 yield and 15% upside to our revised TP of S$0.77, we reiterate our Buy recommendation.”

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