Macquarie upgrades CapitaCommercial Trust (C61U.SG) to Outperform from Neutral, lifts target price to $1.40 from $1.13 to assume higher prime office rents in Singapore, according to Dow Jones.

Macquarie tips average rents +8% this year to $7.30 psf, +10% to $8.00 psf by end 2011, “a recovery in financial services employment and better-than-expected take-up have led to higher occupancy levels.”

Research house says with incoming supply of prime-grade office space over next two years, older buildings that aren't so well located won't be able to maintain high occupancy, rentals.

“In this light, we view CCT's portfolio reconstitution strategy to position itself for the longer term as sound,” says Macquarie.

REIT flat at $1.30.