OCBC Investment Research has initiated coverage on Frasers Logistics & Industrial Trust (FLT) with a "buy" rating premised on a fair value estimate of S$1.09.
"We believe FLT has ample avenues to spur its future growth. This would come in the form of both organic and inorganic growth drivers," a research note from the brokerage said.
The brokerage holds the view that the current demand-supply dynamics are favourable within Australia's industrial real estate market.
Citing property consultancy firm Jones Lang LaSalle, the research note said that "the supply of industrial assets in Australia is expected to come in below the 10-year annual average of 1.7m sq m (million square metres) in 2016 (compared) to demand, as measured by occupier take-up, (of) 2.3m sq m in 2015".
FLT's portfolio of industrial and logistics assets has a high occupancy rate of 98.3 per cent as at its initial public offering, with a diverse and high quality tenant base spread across a broad range of sectors, the brokerage added.