Broker's take: DBS upgrades MCT to 'buy' on revised optimism in commercial office sector

ANALYSTS from DBS Group Research have upgraded Mapletree Commercial Trust (MCT) from "hold" to "buy", raising its target price from S$1.62 to S$1.75, on the back of improving sentiment in the commercial office sector.

The broker cited the strong earnings visibility of MCT's VivoCity and Mapletree Business City Phase 1 (MBC 1) properties and believe they will remain resilient during periods of uncertainty.

In addition, improvements in rental reversions at VivoCity may lead to earnings and share price upside, together with a better than-expected performance from MBC 1, the broker added.

However, DBS cautioned on VivoCity's weak operational performance and signs of a slowdown as the mall is gradually entering a matured stage. But this could be mitigated by Mapletree's efforts to revamp the mall's offerings.

MCT units were trading S$0.01 or 0.6 per cent higher at S$1.59 at 9.55am on Monday.