The outlook is stable. There are no leases expiring in Australia for the remainder of the FY. 9.2% of Singapore leases by gross revenue expiring in the remainder of the FY. We expect recent acquisitions to drive gross rental growth in FY18 by 4.3% YoY and DPU growth of 0.9% YoY.
Maintain Accumulate; unchanged target price of $2.86
Our forecast remains largely unchanged, after incorporating the 1H FY18 results, acquisition of 100 Wickham Street in Australia and divestment of 13 International Business Park during 2Q FY18.
We do not incorporate the divestment of 10 Woodlands Link in 2Q FY18 in this instance, as it was divested before the 1Q FY18 results were announced and are already reflected in our estimates.
We expect a stable 5.9% yield and our target price gives an implied FY18e P/NAV multiple of 1.35x, which compares against the FTSE REIT Index forward 12-months P/NAV multiple of 1.06x.
A-REIT is trading above the peer average P/NAV multiple and at a lower 12M-trailing yield than the peer average.