Reits

Reits: Following the conclusion of the 2Q15 results season, OCBC notes that out of the 23 S-REITs under its coverage, all four hospitality REITs reported earnings which fell short of expectations, while the rest delivered results which were in-line.

Despite the positive boost from the SEA Games in June, it was not sufficient to offset continued softness in tourist arrivals and weak corporate sentiment.

House also notes the trend of continued moderation in rental reversions across the various sub-sectors, and REIT Managers are largely cautious on the outlook.

OCBC opts to maintain NEUTRAL on the S-REITs sector for now, despite the FTSE ST REIT Index plunging to a 3-year low recently. Nevertheless, house do see some opportunities to bargain hunt for selective stocks, and recommend Frasers Centrepoint Trust (Buy with TP of $2.24), Keppel DC REIT (Buy with TP of $1.24), Frasers Commercial Trust (Buy with TP of $1.65) and Starhill Global REIT (Buy with TP of $0.93) as top sector picks.