SINGAPORE (Jan 26): DBS Group Research has upgraded Cambridge Industrial Trust to a “buy” rating with a higher target price from 54 cents to 60 cents, after the REIT had a change of sponsor to e-Shang Redwood.

DBS’ analyst Derek Tan noted that Cambridge’s new sponsor is a logistics developer and operator in North Asia and believes that there could be greater synergies between the two entities going forward.

On the other hand, the REIT is currently undergoing a portfolio repositioning involving asset enhancement initiatives and divestments to allow it to invest in higher yielding assets. At the same time, it has had to seek new acquisition targets in Australia after its Australian partner termination their joint venture.

In fact, the REIT could potentially see distributions per unit fall further from the impact of its single-to-multi tenant conversions.

For now, the REIT manager has appointed Goldman Sachs Singapore to conduct a strategic review of its business and operations and added that the conclusion of the review could open up greater business opportunities for the group.

Shares in Cambridge are trading at 56.5 cents on Thursday.