Cap­i­taLand Com­mer­cial Trust | Buy

The Straits Times - - BUSINESS -

Sept 13 close: $1.74 Tar­get price: $2.12 Bro­ker: DBS Group Re­search, Sept 13

Cap­i­taLand Com­mer­cial Trust (CCT) an­nounced it has signed a one-year lease ex­ten­sion with HSBC for the whole of 21 Col­lyer Quay. The orig­i­nal lease with HSBC was sched­uled to ex­pire next April. The news is a dis­ap­point­ment as we had orig­i­nally as­sumed HSBC would ex­tend its lease for a longer pe­riod... Nev­er­the­less, should CCT de­cide to con­tinue own­ing the build­ing, it has an­other two years to find a re­place­ment ten­ant, which is am­ple time.

Al­ter­na­tively, given the higher de­mand for of­fice build­ings in Sin­ga­pore with re­cent trans­ac­tions at “tight” yields, there is po­ten­tial for CCT to sell the build­ing above book value to demon­strate the con­ser­va­tive val­u­a­tion of its build­ings and why it de­serves to trade at a pre­mium to book as im­plied by our tar­get price.

Newspapers in English

Newspapers from Singapore

© PressReader. All rights reserved.