Company Name: CAPITACOMMERCIAL TRUST
| Research House: Maybank Kim Eng | Price Call: HOLD | Target Price: 1.06 |
Maybank Kim Eng Research cut its rating on CapitaCommercial Trust (CCT) (CACT.SI) to sell from hold and lowered its target price to $1.06 from $1.25.
CCT's units were flat at $1.25, having risen about 18% so far this year.
Kim Eng said CCT's average office portfolio rent fell to $7.45 per square foot (psf) in March from $7.66 psf in December 2011 and said a quick upturn in office demand is unlikely due to ample supply and the prospect of tepid gross domestic product growth.
“As we do not foresee an imminent upturn in office rents, current valuations appear rich and the 2012 fiscal year yield of 5.9% is insufficient to offset sectoral headwinds.”
However, UOB Kay Hian raised its target price on CCT to $1.20 from $1.15 and kept its hold rating. The broker raised CCT's 2012-2014 distribution per unit forecast by 1-3% due to interest savings from debt refinancing.
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