SINGAPORE (Dec 2): DBS is optimistic on CapitaLand Retail China Trust (CRCT) upgrading it to a “buy” call with a target price of $1.60, citing the REIT’s preparations for the future.

In a Thursday report, lead analyst Mervin Song notes that while the REIT faces headwinds with a weaker average RMB exchange rate, impact from higher property taxes in Beijing and increased interest rates, he believes these risks have already been priced in.

Furthermore, the potential of CRCT malls have not been maximised, notes Song, with several properties still ramping up or in transition. These include Grand Canyon, which is still generating annualised net property yield of 5.3%, well below the target range of 7% to 8%.

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