SINGAPORE (Sept 9): Maybank Kim Eng has upgraded two Singapore office REITs, CapitaLand Commercial Trust (CCT) and Keppel REIT, to “buy” from “hold”, even as office rents are expected to continue to slide in the near term.
“We believe the issue is well-flagged and the market could instead focus on a bottom,” says Maybank analyst Derrick Heng in a Thursday report. “We expect rents to bottom over the next 5-6 quarters and REIT prices could react ahead.”
Grade A office rents have fallen for five consecutive quarters to $9.50 psf per month, a cumulative decline of 17%, according to 2Q16 data from CBRE.
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