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Investing.com - JPMorgan upgraded IGB REIT (IGBREIT:MK) from Neutral to Overweight on Wednesday, raising its price target to MYR2.75 from MYR2.20, citing the company’s acquisition of Mid Valley Southkey mall in Johor Bahru.
The research firm highlighted the MYR2.65 billion acquisition, which is expected to yield 7.2% and deliver approximately 15% distribution per unit (DPU) accretion for fiscal year 2026. The deal will be funded through a combination of 38% debt and 62% equity consideration.
JPMorgan noted that the acquisition diversifies IGB REIT’s income stream beyond the Klang Valley region and adds what it describes as "the best-in-class and largest Johor mall" to the company’s portfolio. The timing aligns with the planned opening of the Rapid Transit System (RTS) in early 2027, which will connect Johor Bahru, Malaysia, and Singapore.
The firm expects the transit connection to drive growth in tenant sales at the newly acquired property. With this acquisition, JPMorgan forecasts IGB REIT’s three-year DPU compound annual growth rate to accelerate to approximately 9% from about 3% previously.
The new price target represents JPMorgan’s June 2026 valuation, which the firm describes as a "Street-high" target for the Malaysian real estate investment trust.
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