CapitaLand in February acquired four income-producing office and retail properties in the Greater Tokyo area for 49.7 billion yen ($620.1 million).
With the recent acquisitions, the group is on track to achieve at least $3 billion worth of AUM in Japan by the end of 2017, said CapitaLand President and Group CEO Lim Ming Yan.
(See: CapitaLand sees potential to double Japan AUM to $5 billion)
However, the Japan market still only accounts for a relatively small part of CapitaLand’s total portfolio.
“With the recent acquisitions, the Japan market accounts for approximately 3% of CapitaLand's total AUM,” says RHB analyst Vijay Natarajan in a flash note on Wednesday.
According to Natarajan, CapitaLand’s core markets – China and Singapore – account for 44% and 35% of the group’s total assets, respectively.
As such, the analyst has an unchanged target price of $3.84 for CapitaLand, which is pegged at a 20% discount to its revalued net asset value (RNAV).
“Downside risks to the share price is a potential slowdown in residential sales from tightening of residential policy measures across various Chinese cities,” Natarajan says.
Meanwhile, key catalysts ahead include the possibility of big M&A transactions and the setting up of more private funds that can boost the group’s ROEs.
As at 12.22pm, shares of CapitaLand are trading 3 cents higher at $3.62.
