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UI Boustead's Cost of Debt Could Be Pressured by Higher Japan Interest Rates — Market Talk
UI Boustead's Cost of Debt Could Be Pressured by Higher Japan Interest Rates — Market Talk
About this update from Ui Boustead Reit
UI Boustead REIT's cost of debt could be slightly pressured by higher Japanese interest rates, says UOB Kay Hian's Jonathan Koh in a note. Yen-denominated loans account for 46% of the Singapore real-estate investment trust's total borrowings, the analyst notes. He estimates that the REIT's cost of debt could rise 15 bps to 2.65% if the three-month Tokyo interbank offered rate rises to 1.30%, compared with November's 0.80%. However, he reckons this would still be manageable for the REIT. UI Boustead's distribution yield remains attractive at 9.2% for FY 2027, he adds, noting peers' lower projected yields. UOB KH maintains its buy rating and S$1.13 target price. Units rise 3.2% to S$0.805. ([email protected])