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Office REITs trading 'unjustly' below book value, says DBS who has CCT as top pick

PC Lee
PC Lee7/11/2018 11:08 AM GMT+08  • 2 min read
Office REITs trading 'unjustly' below book value, says DBS who has CCT as top pick
SINGAPORE (July 11): Manulife Centre on Bras Basah Road is targeted by British property group Chelsfield for $550 million, according to media reports.
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SINGAPORE (July 11): Manulife Centre on Bras Basah Road is targeted by British property group Chelsfield for $550 million, according to media reports.

This translates to a psf price of $2,300 on net lettable area (NLA) of 242,000 sf.

In a Tuesday note, DBS Group Research says the potential sale of Manulife Centre at a mid-2% yield based on NPI (net property income) is a continuation of the trend of fringe CBD office properties being sold on tight yields contrary to investor expectations that Singapore office cap rates should expand in a rising interest rate environment.

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