As the Singapore REIT (S-REITs) sector gained some 1.3% on the week from May 16 to 31, UOB Kay Hian analyst Jonathan Koh has kept his “overweight” call on the sector.
In his June 2 report, Koh noted that Singapore should be able to ease safe distancing measures after June 13, echoing Prime Minister Lee Hsien Loong’s speech to the nation on May 31 that the republic is on track to relaxing its heightened measures then.
In his June 2 report, Koh has also kept “overweight” on the healthcare, industrial, office and retail sub sectors, while maintaining “marketweight” on the hospitality sub-sector.
The top outperformer within UOB Kay Hian’s S-REIT Index was ARA LOGOS Logistics Trust, which gained 6.6% due to its attractive yield and “continued re-rating”.
Parkway Life REIT (PLife REIT) gained 5.7% on the back of optimism following the potential extension of its master leases for three of its Singapore hospitals.
Mapletree Industrial Trust (MINT) rounded up the index’s top-three performing S-REITs with a 5.1% gain due to the proposed acquisition of 29 data centres in the US.
Keppel REIT, on the other hand, was the index’s top underperformer as it declined 5% amid the tightened measures.
Hospitality REITs such as CDL Hospitality Trusts (CDL HT), Far East Hospitality Trust (FEHT) and Ascott Residence Trust (ART) loss 2.5%, 0.8% and 0.5% respectively on the back of tightened border control measures.
Keppel DC REIT lost 1.1% as its competitor MINT “gained scale in data centres”.
On this, Koh has recommended investors “buy” blue chips such as Ascendas REIT (A-REIT), Frasers Centrepoint Trust (FCT), Keppel REIT and MINT with target prices of $3.82, $3.06, $1.49 and $3.62.
He has also recommended investors accumulate “laggards” such as ARA LOGOS Logistics Trust, FEHT, LREIT and United Hampshire REIT with target prices of 89 cents, 71 cents, 97 cents and 95 US cents.
Units in A-REIT, FCT, Keppel REIT and MINT closed $2.92, $2.43, $1.16 and $2.78, while units in ARA LOG, FEHT, LREIT and United Hampshire REIT closed 79 cents, 59.5 cents, 77 cents and 75.5 US cents on June 3.
