Q: BRE had what looks like a positive announcement today - market reaction is mixed - this is a small company; no dividend growth buy high yield over many years. I have a small allocation in my portfolio just to give my overall yield a bit of a boost. Do you like the deal announced today? Is it a ‘safer’ company ad a result of this deal?
5i Research Answer:
We think it is a good move and makes it a 'bit' safer. The additional brokerages is not highly material but we do like the internalization of management, which will align them more closely with shareholders. The cleaner structure should allow for an improved valuation, over time.