RHB Group Research analyst Vijay Natarajan has upgraded his rating for EC World REIT from ‘neutral’ to ‘trading buy’ after the manager of the REIT announced on May 17 that it has been approached by its sponsor-led consortium for the potential transaction involving all its properties.

Natarajan believes a potential takeover could be on the cards. “[EC World REIT’s] high [forecasted] FY2021 ending December dividend yield of 7.6%, coupled with a logistics-focused portfolio, makes it an ideal acquisition target for funds looking for stable recurring income,” he says in a May 18 research note.

He notes that the REIT’s sponsor Forchn International, which holds a 43.6% stake, is leading talks on behalf of a consortium of purchasers, which may lead to the divestment of its assets.

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