Lee also highlights several risks specific to the trust that could affect the achievement of Citi’s target price. First is the cap rate cycle — with industrial cap rates now lower than pre-financial crisis levels and foreign capital consisting of a significant portion of transactional activity, a key risk for the sector is diminishing relative attractiveness of industrial yields.
Citi Research analyst Brandon Lee has kept “buy” on Frasers Logistics & Commercial Trust (SGX:BUOU
) (FLCT) with a lower target price of $1.24 from $1.48 previously.
To reflect revised foreign exchange assumptions, lower occupancies mainly in UK business parks and higher debt cost, Lee has cut his FY2024 and FY2025 distribution per unit (DPU) estimates by 8.4% to 6.88 cents and 7.16 cents respectively. The analyst has also introduced FY2026 DPU estimate of 7.55 cents.
