In a note dated Jan 18, Jefferies has initiated coverage on CapitaLand Integrated Commercial Trust (CICT) with a “buy” rating and target price of $2.32.

CICT is the merged entity between CapitaLand Mall Trust (CMT) and CapitaLand Commercial Trust (CCT).

According to the brokerage, CICT is a scale play on recovery, rejuvenation and regionalisation of Singapore retail and office space.

The trust’s valuation is also “reasonable” with a yield of 5% and implied psf of $2,200, it adds.

Although the yield curve steepening is a “handicap”, Jefferies notes that CICT’s non-linear journey needs to be seen in the context of 30% growth in distribution.

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Moreover, the news flow has been positive for CICT.

Jefferies points out that household brands are setting up shops on the high street, while asset managers and family offices are “making a beeline”.

As at 12.49 pm, CICT was down 5 cents or 2.1% at $2.30 with 13.2 million shares changed hands.