Credit Suisse starts Ascott Residence Trust (A68U.SG) at Neutral with a $1.30 target price. Says the hospitality REIT’s earnings have become more stable after its recent acquisition of 26 serviced apartments in Europe, with 47% of its EBITDA now derived from stable income vs 4% previously.

But expects the overall DPU to increase only 2%-6% in FY10-12, mitigated by the average low single-digit growth in certain European markets like France and Germany, and other Asian markets like Vietnam and China.

Says ART could acquire up to $1 billion worth of assets in China, Singapore, Malaysia and India in the next 12 months, but adds a cash call may be necessary given a limited debt headroom of $140 million and 41% gearing. The REIT is flat at $1.22.