>

CICT seen as 'strongest contender' for Mercatus portfolio among local retailers: DBS

By Felicia Tan

/ The Edge Singapore |

August 16, 2022 2:47 PM SGT

Given the strong upward trajectory in the Singapore office market, the analysts also believe that CICT is well positioned to ride on the office upcycle due to its being the largest Singapore REIT with a Singapore-central commercial portfolio.

SINGAPORE (EDGEPROP) - DBS Group Research analysts Rachel Tan and Derek Tan have kept “buy” on CapitaLand Integrated Commercial Trust (CICT) as they see the REIT benefitting from the reopening of domestic and international borders.

The REIT is also seen as a key proxy of the reopening play.

“We estimate CICT could deliver a 6% two-year distribution per unit (DPU) compound annual growth rate (CAGR), one of the stronger growth rates among its peers,” the analysts write.

Given the strong upward trajectory in the Singapore office market, the analysts also believe that CICT is well positioned to ride on the office upcycle due to its being the largest Singapore REIT (S-REIT) with a Singapore-central commercial portfolio.

In addition, CICT is one of the few S-REITs that has the opportunity to acquire newly completed prime Singapore office assets such as the remaining 50% stake in CapitaSpring, as well as potentially more commercial Singapore assets in the sponsor pipeline.

On the Mercatus portfolio, the analysts see CICT being the “strongest contender” among local retailers.

“[The] Mercatus portfolio would potentially benefit CICT with a longer runway of assets as it builds a bigger base of resilient suburban malls in Singapore,” they write.

In their report, the analysts have kept their target price of $2.70, which implies a P/NAV of 1.3x at +1 standard deviation (s.d.) of CICT’s historical range.

“Despite near-term potential headwinds, we are one of the first to look forward on its growth potential following from its portfolio optimisation and asset recycling efforts,” the analysts write.

“The key risks to our view are an economic downturn, as well as a prolonged recovery and weak sentiment. Setbacks from new waves of the pandemic could delay CICT’s recovery,” they add.

Units in CICT closed 1 cent lower or 0.47% down at $2.11 on Aug 15.

This article first appeared on The Edge Singapore.

Tags:

CapitaLand Integrated Commercial Trust REIT

Follow our channels to receive property news updates 24/7 round the clock.

Subscribe to our newsletter

Top Articles

1

Emerald of Katong hits 99% sales at launch, averaging $2,621 psf

2

Kingsford sells 76% of Chuan Park units at an average price of $2,579 psf

3

Is it a Good Deal?: $1.03 million for a four-room HDB flat in District 10

4

Sim Lian Group’s Emerald of Katong: Will it be another top-seller?

5

CDL sells 20% of Union Square Residences at an average price of $3,200 psf

Our Site

Property Research

Condos

HDBs

Landed

Commercial

Industrial

Properties For Sale

Properties For Rent

Edgeprop.sg (previously known as The Edge Property Singapore) is the best property portal for real estate agents, investors, home-seekers and sellers alike in Singapore. On EdgeProp, you will be able to find the latest and hottest property news, property listings, and access tools for your research and analysis.

Whether you are looking to buy, sell or rent apartments, condominiums, executive condos, HDBs, landed houses, commercial properties or industrial properties, we bring you Singapore’s most comprehensive and up-to-date property news and thousands of listings to facilitate your property decisions. Click into any listing to check out the new AI Redesign tool to envision your property based on your preferred style, be it Scandinavian, Minimalist or many others.

Make data-driven property decisions with our easy-to-use free and paid tools. The Edge Fair Value tool lets users calculate the fair value of a property, while the En Bloc Calculator helps to determine the probability of a Singapore project being put up for collective sale. Our whole new Research tool provides you data on past transactions, price trends, and more for condos, HDBs, landed houses, commercial properties and industrial properties.

Aside from that, EdgeProp also offers a market trends tracker that lets you access historical property data, sales volume and compare how similar properties are selling, a heatmap that shows you where Singapore’s most popular property sales locations are, a HDB lease tool to calculate your HDB tenure, an affordability calculator, and property alerts to track your preferred Singapore property by project or location, as well as information on new launches.

On the lookout for undervalued property or looking to rent? EdgeProp’s powerful search filters will let you personalise your property-seeking experience – whether you are looking for a property near MRT stations, amenities like schools, or within a HDB Estate or District – so that you find exactly what you are looking for.