RHB Investment Bank Bhd (RHB Research) and CIMB Investment Bank Bhd (CIMB Securities) maintained their BUY calls on Sentral REIT with target prices of RM0.87 and RM0.81 respectively, after the REIT’s 1H26 results came in broadly within expectations.
Sentral REIT reported 1H26 core earnings of RM39.9 million, up 0.4% year-on-year, while revenue rose 3.3% to RM97.4 million. The REIT declared a distribution per unit of 3.17 sen, up marginally from 3.16 sen a year earlier, while portfolio occupancy improved to 89% from 85%.
RHB Research said earnings were supported by the contribution from Arcoris Mont Kiara, acquired in December 2025, alongside low single-digit rental reversions. However, higher utility costs, the vacant Sentral Building 2 and Arcoris’ lower-margin retail component weighed on the net property income margin.
CIMB Securities highlighted prospective FY26-27 dividend yields of 8.8% to 9.3% as the highest within its sector coverage. It also viewed the acquisition of Arcoris and disposal of Wisma Sentral Inai positively, saying these moves have modestly reduced the REIT’s reliance on office assets and improved income diversification.
RHB expects earnings growth to remain supported by stable occupancy, manageable lease expiries and rental reversions. It estimated the Sentral Building 2 vacancy currently creates a RM4 million to RM5 million earnings gap, with meaningful upside possible as the space is progressively filled from FY27.
CIMB added that stronger rental reversions, sustained occupancy improvements and value-accretive acquisitions or asset enhancement initiatives could provide upside catalysts.
As of 10.56 am, the stock price slips 0.68% to RM0.73.
