The company has acquired two assets for $380.5m, funded with a $273m equity raising. UBS increases the valuation, raising the target to $2.82 from $2.74, after incorporating the transaction but downgrades to Neutral from Buy on valuation grounds.
UBS incorporates the acquisition of four office assets in Brisbane, Sydney and Melbourne for $501m into its numbers. The price target is reduced to $2.58 from $2.60 to reflect dilution to financial metrics balanced against the benefits of the transaction.
Centuria Metropolitan has revalued its portfolio, resulting in a lift of 3.6% to $930.5m, mainly from NSW assets. Morgans believes the stock offers an attractive FY19 distribution yield of around 7.5%, underpinned by 96% of rental income having fixed annual increases of 3.6%.
UBS updates numbers post the acquisition of two assets for $128m and a $60m equity raising. The main benefits of the transaction include diversifying individual tenant risk, increasing liquidity and improving the portfolio quality.