[Click eStock] "ESR Square REITs, Low Burden from Interest Rate Increase"

[Asia Economy Reporter Ji Yeon-jin] Daishin Securities announced on the 14th that it has set a target price of 7,000 KRW and a buy rating for ESR Kendall Square REIT based on its net asset value (NAV). The target price has a 33% upside potential compared to the current stock price.

Jang Seung-woo, a researcher at Daishin Securities, stated, "ESR Kendall Square REIT has a borrowing structure that is less burdensome despite rising interest rates. The average duration is 2.8 years, and 24% of bonds will mature by the end of next year. Although there are concerns about increased refinancing interest costs due to rising market interest rates, there are no refinancing events in the short term, so the earnings fundamentals are expected to remain solid."

ESR Kendall Square REIT is a logistics REIT based on logistics centers as underlying assets. As of last month, it holds a total of 18 assets, with total assets under management (AUM) of 2.4 trillion KRW. By region, there are 2 urban logistics centers, 14 in the Seoul and Gyeonggi areas, and 2 in the Busan area. The major shareholders are the Canada Pension Plan Investment Board (CPPInv) and Kendall Square REIT Management, with respective stakes of 24.9% and 9.9%.

The asset value is estimated at 2.5 trillion KRW, and the expected operating income for this year is 94 billion KRW, which is a 75% increase compared to the previous year. The dividend per share is 272 KRW, up 43% from the previous year, and as of the 12th, the expected dividend yield is 5.3%.

ESR Kendall Square REIT’s logistics centers are classified as prime A-grade logistics centers with excellent locations. These logistics centers meet last-mile conditions and are highly preferred by e-commerce and third-party logistics companies as tenants. The distance to highway interchanges ranges from 0.2 to 7 km, placing most centers in key transportation hubs. The major tenant composition is 55.5% e-commerce, 26.5% third-party logistics companies, and 18% consumer goods industries.

This content was produced with the assistance of AI translation services.