Brokers' take

CapitaLand Commercial Trust > Neutral RHB Research, Jan 25 Jan 25 close: S$1.90 Target price: S$1.86

MAINTAIN "neutral" but raise target price by 3 per cent to S$1.86, one per cent upside, with a 5 per cent yield. CapitaLand Commercial Trust's (CCT) Q4/FY18 results met expectations. We have revised our FY19-21 distribution per unit (DPU) estimates by 1-4 per cent, factoring in strong momentum in Grade-A office rentals which is expected to continue in FY19-20. Key catalysts are the announcement of redevelopment plans for 21CQ, accretive acquisition of remaining stake in CapitaSpring and overseas assets.

Despite a positive outlook, a 1.0 times FY19 price/book valuation and FY19F yield of 5.0 per cent are not compelling in our view so we would recommend investors to buy on dips.