KLCC Property (HOLD) - Maintaining The Status Quo

KLCC Property (HOLD)

Maintaining The Status Quo

• KLCC Property hosted their Corporate Day last Friday, and we came with the following key takeaways:  
• No new updates on the RCULS or the possibility of a REIT creation, despite numerous probing.
• PETRONAS Towers 1, 2 and 3 will have their respective head lease agreements finalised soon, between KLCC Property and PETRONAS.  We have already factored in rental step ups in our forecasts, hence no change to our numbers.
• In terms of pipeline, Menara Dayabumi will see an extra 500k sft of NLA under Ph. 3 of its refurbishment programme, while we gathered that there are another 7 parcels of land within the KLCC locale, making up 370,000 sft (including Lot D1) for further development.
• All in all, we see KLCC Property as maintaining the status quo both operationally and strategically.  Maintain HOLD call and TP at RM 3.46 (15% discount to RNAV).

HLIB Research - 2 April 2012