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RHB |
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REITs – Singapore S-REITs Weekly
S-REITs retraced marginally by 0.6% wow. Hospitality REITs FHT, CDREIT and ART increased 2.1%, 1.9% and 1% respectively as hotels could start receiving guests on staycations. We turn our spotlight on FCT, a pure play on suburban retail malls in Singapore that provides a distribution yield of 4.8%. Maintain OVERWEIGHT on SREITs. BUY retail REITs CMT (Target: S$2.60) and FCT (Target: S$2.85), hospitality REIT FEHT (Target: S$0.62) and office REIT KREIT (Target: S$1.30).
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Real Estate Showing Resilience; Maintain OVERWEIGHT
Stay OVERWEIGHT – CapitaLand is our Top Pick. Despite a sharp deterioration in economic outlook, the property sector has largely remained resilient, as anticipated. Key reasons are ultra-low interest rates, government economic stimulus, predominant local buying and healthy household balance sheets pre-crisis. Developers’ low margins have also limited price wars. We stay OVERWEIGHT on the sector mainly on valuation grounds, with developer stocks trading at attractive 40-60% discounts to book value.
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CGS CIMB |
DBS VICKERS |
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Frasers Logistics & Commercial Trust On a stronger growth trajectory
■ FLCT offers stronger acquisition growth prospects post-merger, in our view. ■ Stable and resilient portfolio due to long WALE and inbuilt rental escalations. ■ We reiterate our Add rating with a higher DDM-based TP of S$1.43.
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Ascott Residence Trust (ART SP) : BUY Profit warning but negatives priced in
• Profit warning: DPU for 1H20 to be reduced by 65- 75% from 3.43 Scts in 1H19 • Worst is likely over with phased-in reopening; six out of 88 assets are still not scheduled for reopening • We estimate that ART will be able to deliver at least 1.9-2.0 Scts of DPU purely based on its master lease contributions • ART currently trades at 0.80x P/NAV; negatives priced in at -1 SD P/NAV
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Check out our compilation of Target Prices