Company Name: ASCOTT RESIDENCE TRUST
| Research House: OCBC | Price Call: BUY | Target Price: 1.12 |
OCBC Investment Research has upgraded Singapore’s Ascott Residence Trust (ART) (ASRT.SI) to buy from hold and raised its price target to $1.12 from $0.98 mainly due to lower capitalisation rates for European assets.
ART units were up 1.4% at $1.08 and have risen around 12% so far this year.
Four of ART’s 17 properties in France are in Paris and are unlikely to face significant long-term capital value downside due to their prime quality and locations, OCBC said.
It added that all four of ART’s properties in Britain are in prime London areas run under management contracts with minimum guaranteed income clauses.
“ART shares are attractive given a robust yield of 7.9%, which should underpin the share price, and an undemanding price-to-book ratio of 0.8 times, which provides a reasonable margin of safety for bear case fair-value write-downs,” OCBC said.
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