CapitaLand Commercial Trust downgraded by UOB KayHian

Six Battery Road with CapitaLand and CapitaLand Commercial Trust signage; taken October 2018.Six Battery Road with CapitaLand and CapitaLand Commercial Trust signage; taken October 2018.

UOB KayHian downgraded CapitaLand Commercial Trust to Hold from Buy despite the trust benefiting from the office market upcycle’s rent increases.

“CCT is the bellwether for office REITs. However, the stock has already outperformed. Upside is limited and share price could consolidate in the near term,” the brokerage said in a note Thursday.

UOB KayHian nudged its target price for CCT up to S$2.17 from S$2.16, and tipped an entry price of S$1.98.

The unit price was at S$2.15, down 0.92 percent, at 4:17 P.M. SGT.

On Wednesday, CapitaLand Commercial Trust reported its second-quarter net property income increased 0.8 percent on-year to S$78.38 million, bolstered by the acquisition of Gallileo.

UOB KayHian said the results were in line with its forecasts.

But UOB KayHian trimmed its 2020 distribution per unit forecast by 2 percent due to the trust’s plan to close 21 Collyer Quay for upgrading for nine months in 2020 for a S$45 million enhancement project.

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