K-REIT – Lehman

Organic Growth via Rental Revision

Investment Conclusion

We initiate coverage of K-REIT with a 1-Overweight investment rating on the shares and a
12-month dividend discount model–derived price target of S$3.42. Based on our FY08E distribution yield projection of 4%, 120bp above the Singapore Government 10-year bond, we estimate K-REIT offers potential return of 36% at the current price. (This is an excerpt from our full initiation report – “Robust Organic Growth via Rental Revision”.

Summary