DBS Group Research has initiated “buy” on Daiwa House Logistics Trust (DHLT) with a target price of 95 cents, representing a 17% upside to the REIT’s last-traded price of 81.5 cents as at Jan 21.
The target price assumes a weighted average cost of capital (WACC) of 5.2% and a risk-free rate of 1.5%. This implies a target yield of 5.5% to 5.6%. The target price also does not assume any acquisitions in the analysts’ projections.
DHLT is a REIT that has a pure-play on logistics with a portfolio of 14 modern facilities in Japan with “solid fundamentals”, say analysts Dale Lai and Derek Tan in their Jan 24 report.