OCBC Investment Research has maintained an ‘Overweight’ rating on the broader Singapore REITs sector, noting steps that have been taken by a number of industrial REITs to bolster their respective property portfolios.
The bank highlighted proposed acquisitions by Ascendas REIT and Mapletree Logistics Trust, both of which have announced separate acquisitions in Singapore’s Science Park, and in the state of Victoria, Australia respectively.
Ascendas REIT’s acquisition of 12,14, and 16 Science Park Drive for SGD420 million (USD292 million) is expected to generate a net property income (NPI) yield of approximately 6.0% post-acquisition costs in the first year of ownership, and increase its weighted average lease expiry (WALE) from 3.7 years to 4.4 years, said the bank.
Meanwhile Mapletree Logistics Trust’s acquisition of four properties downunder for AUD142.2 million (USD103 million) is estimated to generate an estimated initial NPI yield is of 7.6%, it added.
OCBC has also highlighted Ascendas REIT and Frasers Logistics & Industrial Trust as its prefered picks, both of which have been given a ‘Buy’ rating by the bank, with fair value estimates of SGD2.67 and SGD1.10 respectively.
Units of Ascendas REIT and Frasers Logistics & Industrial Trust are currently listed on the Singapore Exchange at SGD2.33, and SGD0.945 respectively.