Frasers Commercial Trust > Buy DBS Group Research, Jan 19 Jan 19 close: S$1.53 Target price: S$1.71

WHILE the share price of Frasers Commercial Trust (FCOT) over the past 18 months has rallied, it has lagged the other office Reits, such as CapitaLand Commercial Trust and Keppel Reit, given concerns over the impact of Hewlett-Packard (HP) vacating Alexandra Technopark and concerns over a lack of growth.

As these issues, in our view, have been addressed, we believe FCOT's share price should catch up, as the roughly 2 per cent yield differential between FCOT and its large-cap peers is higher than the historical average spread of about 0.8 per cent.