ESR-REIT's UE BizHub EAST. (Photo: REITsWeek)ESR-REIT's UE BizHub EAST. (Photo: REITsWeek)

OCBC Investment Research announced on 7 July that it has initiated coverage on Singapore-listed Viva industrial Trust with a ‘Buy’ recommendation.

The research firm has also given a fair value of SGD0.75 to the security.

“Looking ahead, we project [Viva Industrial Trust’s] distributable income to increase by 27.0% in FY16 and 8.6% in FY17”, said OCBC, adding that it expects DPU to decrease by 1.2% to 6.916 Singapore cents in FY16, based on the enlarged share base following the placement last November.

However the firm also added that this is expected to increase by 6.9% to 7.392 cents in FY17.

Based on Viva Industrial Trust’s closing price of SGD0.705 as at 6 July, Viva Industrial Trust is currently trading at a DPU yield of 9.8% for FY2016 and a yield of 10.5% for FY2017, according to OCBC’s forecasts.

Units of Viva Industrial Trust finished 2.1% higher from its previous close on the Singapore Exchange to end at SGD0.72.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.