OCBC starts CapitaRetail China at buy

OCBC Investment Research has initiated coverage on CapitaRetail China Trust with a buy rating and price target of $1.44 a unit.

CRCT, which owns malls in China, was last traded at $1.265, down 0.8% from Thursday. The trust has gained about 10% so far this year.

OCBC said CRCT offers growth through both acquisition and asset enhancement.

Its mall, which are positioned as one-stop family-oriented shopping, dining and entertainment destinations for areas with large population catchment, also benefit from rising consumption.

From 2011 fiscal year figures, CRCT’s portfolio has an average property yield of 6.5% based on book valuation, which OCBC said is attractive compared to Singapore retail property yields of around 5-6%.

“Consumption is likely to overtake investment as China’s largest driver of growth in 2012 for the first time in over a decade,” OCBC said.