Introduction to the Report

The CGS International report dated November 19, 2024, provides an in-depth analysis of several Singapore Real Estate Investment Trusts (SREITs) and international companies. This report explores the financial performance, strategic decisions, and market positioning of these entities, offering valuable insights for investors looking to optimize their portfolios.

Keppel DC REIT

Keppel DC REIT has proposed a significant acquisition of two Singapore data centers, KDC SGP 7 and KDC SGP 8, along with a land plot intended for future development. This acquisition, valued at S\$1.38 billion, is expected to enhance the distribution per unit (DPU) by 8.1%, as reported by management. This move will increase the REIT’s exposure to Singapore to 65.5% of its assets under management, further solidifying its position as a major player in the stabilized data center market.

The financial strategy involves a combination of equity fundraising and debt, with an expected increase in aggregate leverage to 33.3%. The company aims to achieve tax transparency by the end of 2025, which should enhance returns further. The report upgrades Keppel DC REIT from a ‘Hold’ to an ‘Add’ rating, with a higher target price of S\$2.48, citing potential re-rating due to the robust market and earnings upside catalysts.

Hospitality SREITs

CapitaLand Ascott Trust

The CapitaLand Ascott Trust is poised for a favorable performance with a dividend yield forecasted to rise from 6.9% to 7.8% over the next two years. Holding an ‘Add’ rating, its strategic positioning within the hospitality sector suggests a strong potential for growth, supported by a solid market cap of \$2,495 million.

CDL Hospitality Trust

CDL Hospitality Trust is marked with an ‘Add’ recommendation, indicating an optimistic outlook with expected dividend yields of 6.2%, 7.3%, and 7.2% over the coming years. Its market cap stands at \$817 million, highlighting its robust presence in the hospitality sector.

Far East Hospitality Trust

Far East Hospitality Trust also carries an ‘Add’ rating. With a market cap of \$925 million, the trust is expected to maintain stable dividend yields, reflecting the resilience of its business model amidst market fluctuations.

Frasers Hospitality Trust

Though not rated, Frasers Hospitality Trust presents a compelling case with a dividend yield projected to increase to 5.2% by FY26F. The trust’s strategic initiatives are anticipated to bolster its market standing.

Industrial SREITs

AIMS AMP Capital Industrial REIT

Though not rated, AIMS AMP Capital Industrial REIT demonstrates robust growth prospects with expected dividend yields of 7.8% to 7.6% over the forecast period. The REIT’s strategic investments are pivotal in enhancing its market penetration.

CapitaLand Ascendas REIT

Carrying an ‘Add’ rating, CapitaLand Ascendas REIT is projected to deliver consistent dividend yields, backed by a strong market cap of \$8,406 million. Its strategic initiatives are likely to ensure sustained growth.

Cromwell European REIT

With an ‘Add’ recommendation, Cromwell European REIT’s dividend yields are expected to reach 9.0%, 8.4%, and 7.7% over the next three years. Its strategic focus on expanding its European market presence is noteworthy.

ESR-LOGOS REIT

ESR-LOGOS REIT, rated ‘Add’, is poised for substantial growth with dividend yields anticipated at 8.6% over the forecast period. Its strategic positioning supports its expansive market reach.

Frasers Logistics & Commercial Trust

Frasers Logistics & Commercial Trust holds an ‘Add’ rating. With a market cap of \$2,669 million, it is well-positioned to capitalize on growth opportunities, reflected in its stable dividend yields.

Keppel DC REIT

As previously discussed, Keppel DC REIT is on a growth trajectory, supported by strategic acquisitions and a favorable market environment, which enhance its dividend yield prospects.

Mapletree Industrial Trust

Mapletree Industrial Trust, with an ‘Add’ rating, is forecasted to maintain strong dividend yields, driven by strategic expansions and a robust market cap of \$4,822 million.

Mapletree Logistics Trust

Rated ‘Add’, Mapletree Logistics Trust is positioned for steady growth with anticipated yields of 7.1%, 6.4%, and 6.0%. Its strategic market expansions are key to its sustained performance.

Sabana Shariah Compliant Industrial REIT

Though not rated, Sabana Shariah Compliant Industrial REIT is expected to yield promising returns, maintaining a stable market presence with a focus on strategic asset management.

Office SREITs

Keppel REIT

Keppel REIT holds an ‘Add’ rating with dividend yields projected at 6.9%, 7.2%, and 7.2%. Its strategic initiatives are expected to strengthen its market position, supported by a solid market cap.

OUE Commercial REIT

OUE Commercial REIT is marked with a ‘Hold’ rating. Despite the cautious outlook, its dividend yields are expected to remain stable, reflecting resilience amidst market challenges.

Suntec REIT

Suntec REIT, carrying a ‘Hold’ rating, is expected to sustain its dividend yields, supported by strategic asset management and market positioning.

Retail SREITs

CapitaLand Integrated Commercial Trust

CapitaLand Integrated Commercial Trust is rated ‘Add’, with a robust market cap of \$10,611 million. It is expected to deliver strong dividend yields, driven by strategic asset management.

Frasers Centrepoint Trust

Frasers Centrepoint Trust, carrying an ‘Add’ rating, is positioned for growth with consistent dividend yields, supported by its strategic market focus.

Lendlease Global Commercial REIT

Lendlease Global Commercial REIT is rated ‘Add’, with an anticipated rise in dividend yields, reflecting its strategic market initiatives and robust financial management.

Mapletree Pan Asia Commercial Trust

Mapletree Pan Asia Commercial Trust, with an ‘Add’ rating, is poised for stable dividend yields, reflecting its strategic market expansions and asset management strategies.

Paragon REIT

Paragon REIT is marked with a ‘Hold’ rating. Despite the cautious outlook, it is expected to maintain stable dividend yields, supported by strategic market positioning.

Starhill Global REIT

Starhill Global REIT, carrying an ‘Add’ rating, is expected to sustain its dividend yields, supported by strategic asset management and market positioning.

Overseas-Centric SREITs

CapitaLand China Trust

CapitaLand China Trust, though not rated, offers promising prospects with rising dividend yields projected through FY26F, reflecting its strategic market positioning in China.

Elite UK Commercial REIT

Elite UK Commercial REIT holds an ‘Add’ rating, with dividend yields expected to rise significantly, reflecting its strategic positioning in the UK market.

Manulife US REIT

Rated ‘Add’, Manulife US REIT presents a unique case with no dividend yield for FY24F and FY25F, but a significant leap expected in FY26F, reflecting strategic repositioning efforts.

Sasseur REIT

With an ‘Add’ recommendation, Sasseur REIT is expected to deliver strong dividend yields, driven by its strategic market positioning and asset management strategies.

Healthcare SREITs

Parkway Life REIT

Parkway Life REIT is rated ‘Add’, with its dividend yield projected to rise steadily, supported by strategic asset management and robust market positioning in the healthcare sector.

Conclusion

The CGS International report provides a comprehensive analysis of various SREITs and international companies, offering valuable insights into their financial performance and strategic initiatives. The report’s recommendations, ranging from ‘Add’ to ‘Hold’, reflect the potential growth and challenges faced by these entities in the dynamic market landscape. Investors are encouraged to consider these insights when making informed investment decisions.