“The P/NAV of 0.98x, which is trading near five-year lows at -1 standard deviation (s.d.) level, might seem cheap,” he says in his Sept 19 report. “However, we think this is fair given the rising interest rate environment. The yield spread has fallen from over 4% at the start of the year to 2.65%, and we expect this to fall even further as well.”
PhillipCapital Research analyst Darren Chan has kept his “accumulate” rating on Frasers Centrepoint Trust (FCT) as the REIT’s occupancy and tenant sales have already recovered to above its pre-pandemic levels.
However, Chan has lowered his target price to $2.38 from $2.64 previously as he increases his cost of equity from 6.41% to 7.08% on a higher risk-free rate assumption P/NAV of 0.98x.
