Brokers' take

Ascott Residence Trust | Sell Target price: S$1.00 July 25 close: S$1.14 OCBC Investment Research, July 25

Ascott Residence Trust's (ART) Q2 revenue rose 6 per cent y-o-y to S$130.5 million, while DPU (distribution per unit) was flat at 1.84 cents or 27 per cent of our initial full-year forecast. DPU for the first half of the year came up to 47 per cent of our full-year forecasts, which is within expectations.

ART remains the largest hospitality S-Reit by market cap, with a diversified base of quality assets in gateway cities. Operationally, we like ART for the strong brand recognition of its assets, and the resilient nature of its portfolio. Additionally, gearing stands at a reasonable rate of 35.7 per cent as at June 30, with about 84 per cent of ART's total borrowings on fixed interest rates.