CapitaMall Trust: Morgan Stanley removes Ascendas REIT and replaces it with CMT in house Top SG focus list. Believes CMT’s defensive retail mall asset class will fare relatively well in a low economic growth environment. Retail malls, especially those located in the suburbs, have been more resilient through downturns, supported by domestic demand for necessities even through a recession.
Also believes that while CMT is a defensive stock, it should outperform peers on earnings growth. Meanwhile, the soft manufacturing trends and office outlook are likely to weigh on rents for A-REIT’s industrial properties and business parks even though the global macro risk exposure may be offset by long leases and value add from enhancement development work.
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