S-REITS: Nomura has REITS report. House remains Bullish on sector, following a faster-than-expected 19.9%YoY pick-up in rents in 2010. Raises office rent assumptions and expect rents to rise by 7.5-10% in 2011F and 5% in 2012F and by more than 10% in 2013F as vacancies fall, delivering upgrades to NAV/PTs for CCT, K-REIT and Suntec….
Maintain positive stance and see office demand broadening and lifting occupancy/rents at SGREIT prompting an upgrade to PT and rating to BUY. see the valuations of CMA and GLP as attractive, although premium multiples at CMT and AREIT sees house maintaining REDUCE calls.
UBS like Nomura has REITS report. Note that 1Q11 SREIT reporting season, mostly in line, with Retail REITs reporting continued strong leasing momentum, CMT posted positive rental reversion of +6.5% in FY10, FCT +11.6%, CRCT +5.1%, and Fortune REIT +10.8%.
Key picks for S-REITs are Frasers Centrepoint Trust for its suburban retail exposure, and K-REIT, Suntec, and CCT for their office exposure.
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