By Jenny Ruth
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Thursday 25th February 2010 |
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ING Medical Properties Trust's (IMP) first-half result was ahead of expectations and has led to him raising his full-year forecast 8% and his 2011 forecast by 3%, says Forsyth Barr analyst Jeremy Simpson.
He has also raised his valuation from $1.16 per unit to $1.21.
The trust reported a 15.3% rise in pre-tax profit to $6.76 million for the six months ended December.
"Total net property revenue was up 6% to $12 million due to underlying rental increases of 5% and occupancy increasing from 96.5% to 99%," Simpson says. That and flat operating expenses contributed to the profit rise.
"With its long lease term (8.5 years weighted average), the nature of its medical industry tenant base, low lease expiry profile and CPI-based rental structure, IMP is well placed to continue to provide investors with a strongly defensive property exposure relative to the broader commercial property sector," Simpson says.
Gearing at 34% provides significant headroom over its banking covenants which don't roll over until March 2011.
"IMP's unique healthcare portfolio is low risk and it has a proven track record of providing diversification away from the cyclical downturn in traditional commercial property."
Simpson values the stock at $1.21 and is forecasting a $11.8 million normalised net profit.
BROKER CALL: Forsyth Barr rate IMP as hold.
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