Keppel Land (KPLD) announced yesterday that it has agreed to divest its 80% stake in BG Junction, a strata-titled retail mall development in Surabaya, Indonesia, for ~INR400b (S$42.8m). The group expects to book an after-tax profit of about S$12.5m from the sale.

The retail mall, BG Junction, is located near the CBD in Jalan Bubutan. It comprises a net floor area of 47k sqm and is currently ~95% occupied. The divestment price is fairly decent, in our view, and we continue to like KPLD for its active capital recycling strategy, diversified exposure across property segments and geographical markets, and strong balance sheet.

Maintain BUY with an unchanged fair value estimate of S$4.09 (30% discount to RNAV).

Source: OCBC Research - 23 Sep 2014