Singapore Stock Market News

Singapore REITs - Creating Yield Accretion

StockFanatic
Publish date: Fri, 26 Jun 2015, 11:39 AM
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Frasers Hospitality Trust
Ascott Residence Trust
ART's proposed acquisition of a S$298m portfolio in Australia and Japan looks to be yield accretive through the creative use of perps and debt instruments. We downgrade ART to HOLD with an unchanged target price of S$1.42 as the 2.9% accretion in DPU is offset by the raised risk profile from the relatively higher debt levels after factoring in perpetual securities (20bp increase in required rate of return). Separately, Frasers Hospitality Trust's private placement on the back of its Sydney acquisition was largely anticipated. Maintain MARKET WEIGHT.
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