Brokers' take

Compiled by Annabeth Leow

CAPITALAND COMMERCIAL TRUST | SELL

APRIL 24 CLOSE: $1.80

TARGET PRICE: $1.63

RHB Securities, April 24

Portfolio occupancy and rents remained steady in the first quarter.

Bugis Village, which accounted for 2.2 per cent of first-quarter 2018 net property income, is to be returned to the state in April next year and CapitaLand Commercial Trust would be paid compensation of $6.6 million plus accrued interest, which is well below its latest book value of $44 million.

Thus, we expect some write-downs in coming quarters and we believe CapitaLand Commercial Trust would use some of the divestment proceeds to top up the loss of income in 2019 and 2020.

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ASCENDAS REIT | BUY

APRIL 24 CLOSE: $2.68

FAIR VALUE: $2.71

OCBC Investment Research, April 24

A-Reit reported its first-quarter results for FY2018, which met our expectations.

Gross revenue rose 3.3 per cent year on year to $215.7 million, while distribution per unit grew 1.5 per cent to 3.91 cents.

Europe and the US are the most probable destinations for inorganic growth beyond Singapore and Australia, with suburban offices and business parks the likely asset classes for acquisitions.

Given the importance of scalability, we believe management would aim to acquire a platform in these new markets, similar to its approach when it penetrated the Australian market previously.

We incorporate A-Reit's full-year results in our model, and fine-tune our finance costs and tax assumptions, while also factoring in its proposed divestment of its 30, Old Toh Tuck Road property and acquisition of a logistics property in Melbourne with 6.5 per cent post-cost net property income yield.

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CAPITALAND MALL TRUST | HOLD

APRIL 24 CLOSE: $2.08

TARGET PRICE: $2.15

Maybank Kim Eng, April 23

We fine-tuned our estimates for CapitaLand Mall Trust following its first-quarter 2018 results, with the reported 0.8 per cent increase in portfolio rental reversion and overall performance in line with our expectation.

With Singapore's retail sector at its early stages of e-commerce disruption, we continue to see a weak growth outlook for CapitaLand Mall Trust and its mall properties.

Against recovering macro fundamentals, we see an earlier improvement in prime Orchard Road rents, possibly benefiting SPH Reit (rated "hold" with a target price $1.00).

We prefer Frasers Centrepoint Trust (rated "buy" with a target price of $2.55) for its dominant suburban mall footprint and visible 4.2 per cent distribution per unit compound annual growth rate profile.

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