DBS started Cromwell European REIT at Buy, pointing to its exposure to European real-estate markets with high yield spreads.
“Cromwell European Real Estate Investment Trust (CERT) is the first Singapore-listed REIT with a diversified Pan-European portfolio that offers investors a unique opportunity to invest in office, light industrial/logistics and retail assets located in Denmark, Germany, France, Italy, and the Netherlands,” DBS said in a note on Tuesday. “With an improving European economy, CERT is well positioned to benefit from an uplift in rents. In addition, with European property yield spreads being above the historical 10-year average, CERT is poised to gain from increases in property values.”
The initial portfolio has 74 properties appraised at 1.35 billion euros, it noted.
CERT offers an “attractive combination” of a high 7.3 percent yield, strong cashflow visibility and steady dividend per unit growth outlook.
It set a 0.63 euro target price.
The unit is expected to begin trading on April 16.