Company Name: CAPITACOMMERCIAL TRUST
| Research House: OCBC | Price Call: HOLD | Target Price: 1.14 |
OCBC Investment Research has downgraded Singapore’s CapitaCommercial Trust to hold from buy and lowered its share price target to $1.14 from $1.29.
CCT shares were up 1.2% at $1.235 in early trade.
OCBC forecast office rentals in Singapore would fall 10-15 percent in the 2012 fiscal year due to macroeconomic uncertainties and an ample office pipeline. It added that office capital values could come under pressure.
“For CCT’s share price, we see key risks stemming from fair value write-downs as the domestic office sector softens further,” OCBC said.
But it said any price downside is likely to be capped by a currently undemanding valuation of 0.7 times price-to-book ratio and a fairly attractive yield of 5.7% for high quality Grade A office exposure.
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