Company Name: ASCENDAS REAL ESTATE INV TRUST
| Research House: Citigroup | Price Call: BUY | Target Price: 2.68 |
Stock Name: MapletreeInd
Company Name: MAPLETREE INDUSTRIAL TRUST
| Research House: Citigroup | Price Call: BUY | Target Price: 1.60 |
Citigroup tips S-REITs over developers as it initiates coverage of the Singapore property sector.
“On the back of QE3, we believe interest rates would remain low near-term, which would continue to drive investor appetite for yield plays. Low bond yields, stable money markets and a strong Singapore dollar could all serve to keep investor interest in S-REITs healthy near-term and continue to drive yield compression. We believe forward DPU growth supports the sustainability of the yield compression cycle.”
It believes the developers’ risk-reward is unfavorable, as the market digests the recent round of policy tightening. After S-REITs strong year-to-date performance, it advises being more selective, preferring industrial and retail S-REITs; its preferred industrial picks are Ascendas REIT and Mapletree Industrial Trust, while its commercial-segment picks are Suntec REIT and CapitaMall Trust.
It views the office-segment outlook as weak, as while demand remains healthy, rents continue to see slight downward pressure.
It initiates A-REIT’s target at $2.68, Mapletree Industrial’s at $1.60, Suntec’s at $1.70 and CMT’s at $2.30, started all four at Buy.
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