5 recommendations by Maybank as the S-REIT space eases into recovery mode

By Michelle Zhu / The Edge Singapore | March 1, 2019 1:30 PM SGT
SINGAPORE (Feb 28): Maybank Kim Eng is remaining “positive” on the Singapore REIT space as it believes sector valuations will remain supported by recovering distributions per unit (DPUs), especially for hospitality; increased traction of capital recycling initiatives and acquisition momentum; and a backdrop of a slower rate hike cycle.
Maybank continues to favour large-caps and laggards, specifically Ascendas REIT(A-REIT), CDL Hospitality Trusts (CDL HT), and Frasers Commercial Trust (FCT) as they continue to trade at 5.7-6.1% FY19 dividend yield, versus the sector’s 4.9% average.
All three REITs are rated “buy” with target prices of $2.95, $1.80 and $2.55, respectively, and projected to deliver 3.6-6% DPU CAGR against the sector’s 0.5-3.5% range.
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