OCBC has therefore reduced its FY18-19F DPU forecasts by 2.2%-2.9% despite the belief that the trust’s current FY18F dividend yield of 7% could compress further, given its significantly lower forward yield of about 5.5% registered at the start of the last rental recovery cycle in 1H13.
SINGAPORE (July 2): OCBC Investment Research is reiterating its “buy” call on Frasers Commercial Trust (FCOT) while lowering its fair value estimate by a cent to $1.53 after incorporating more conservative assumptions for near-term DPU projections.
While the research house notes an encouraging upward trend in spot rents, it highlights the near-term DPU’s dependence on support drawn from the distribution of capital gains arising from FCOT’s previous disposal of hotel development rights for China Square Central.
