Singapore - Comm Properties & REITS 02 (Jan 13 - Dec 18)

Re: Singapore - Comm Properties & REITS 02 (Jan 13 - Dec 18)

Postby winston » Tue Sep 04, 2018 9:28 am

Singapore REITs: A defensive armour despite some chinks

All the 23 S-REITs under our coverage reported 2QCY18 results which met our expectations.

The average DPU growth came in at -0.8% on a YoY basis, versus -2.6% in 1QCY18.

Looking ahead, we are projecting stable DPU growth (market-cap weighted) of 1.7% for the current financial year (FY18/19F) and 1.6% for the next financial year (FY19/20F).

From a balance sheet perspective, the S-REITs under our coverage have remained prudent on their capital management.

Although the current yield spread remains relatively tight at 363 bps, or 1.1 standard deviations below the 5-year mean, the ongoing macroeconomic uncertainties has resulted in a flight to defensive ideas.

We thus believe S-REITs can have a strategic position in investors’ portfolio, but in a selective manner.

Maintain NEUTRAL on S-REITs. Our preferred picks are MAGIC [BUY; FV: S$1.42], KDCREIT [BUY; FV: S$1.54], FCT [BUY; FV: S$2.49] and FLT [BUY; FV: S$1.18].


Source: OCBC
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Re: Singapore - Comm Properties & REITS 02 (Jan 13 - Dec 18)

Postby winston » Tue Oct 16, 2018 10:47 am

REITS (OVERWEIGHT)
Still a Better Place Amidst Uncertainties


Sector Update

Maintain OVERWEIGHT. We believe selective SREITs still offer value for investors despite lingering concerns over rising interest rates.

While we do not expect a broad-based sector outperformance, we believe SREITs with stock-specific catalysts continue to find favour.

Key reasons supporting SREITs: a favourable demand-supply outlook, inorganic growth potential from recent acquisitions, and well-equipped balance sheets to mitigate rising borrowing costs.

While valuations are closer to mean, we do not think they are stretched.

Among the sub-sectors, our preference is for industrial and hospitality REITs (Ascendas, CDL Hospitality Trust) – we believe they are well-poised to tap into demand growth.

Source: RHB

https://research.rhbtradesmart.com/atta ... bdb127.pdf
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