Ascott Reit: Macquarie upgrade to O/p from N, TP $1.27. House note that ART has corrected 16% in the past 3mths on concerns over its exposure to European properties, which accounts for 43% of total assets. Believe this is unjustified as the European portfolio is on master lease
agreements and minimum guaranteed income contracts.
ART offers investors a diversified exposure to its serviced apartment operations in Asia n Europe, where earnings from the latter is stable, given master leases and min. guarantee contracts. shares are attractive, trading on a P/B of 0.76x and the yield of 9.2% is attractive. Believe ART will appeal to high yield funds without liquidity constraints.
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