SINGAPORE (Oct 7): DBS Vickers Securities is keeping its “hold” call on SPH REIT at a slightly higher price target of $1 from 99 cents previously as the research house believes the stock is fairly priced, despite a more bullish view on rents at selected malls in Orchard Road.
In a Thursday report, analyst Derek Tan explains that although SPH REIT’s dividend yield of 5.7% reflects its strength in assets and stable earnings, he thinks comparable retail Singapore REITs are offering even more attractive yields.
Nevertheless, the REIT’s gearing of 25.7% and cost of debt of 2.82% leads Tan to conclude it is “well poised for debt-funded acquisitions”.
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