Gear up for a rough road with this office REIT

SINGAPORE (Jan 11): Maybank Kim Eng has named CapitaLand Commercial Trust (CCT) as its top “buy” pick in the office sector with an unchanged target price of $1.81.

In its 2017 strategy report released last Monday, analyst Derrick Heng highlights CCT’s strong weighted average lease expiry (WALE) of 6.8 years along with just 8% of office leases due for renewal this year, making it “well-positioned to ride through near-term headwinds” in the sector.

Additionally, he thinks incremental contributions from CapitaGreen should drive a three-year distribution per unit (DPU) CAGR of 1.8% well into 2018E.

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