In a note dated Jan 18, Jefferies has initiated coverage on CapitaLand Integrated Commercial Trust (CICT) with a “buy” rating and target price of $2.32.
CICT is the merged entity between CapitaLand Mall Trust (CMT) and CapitaLand Commercial Trust (CCT).
According to the brokerage, CICT is a scale play on recovery, rejuvenation and regionalisation of Singapore retail and office space.
The trust’s valuation is also “reasonable” with a yield of 5% and implied psf of $2,200, it adds.
Although the yield curve steepening is a “handicap”, Jefferies notes that CICT’s non-linear journey needs to be seen in the context of 30% growth in distribution.
Moreover, the news flow has been positive for CICT.
Jefferies points out that household brands are setting up shops on the high street, while asset managers and family offices are “making a beeline”.
As at 12.49 pm, CICT was down 5 cents or 2.1% at $2.30 with 13.2 million shares changed hands.
