Brokers' take

Croesus Retail Trust | Buy Target price: S$0.99 Feb 15 close: S$0.875 DBS Group Research, Feb 15

We believe the perception of a greater alignment between the interest of Croesus Retail Trust's (CRT) unitholders and management following CRT's move to be the first internally managed trust will help close the discount to our target price. This is despite dissatisfaction from some unitholders with the price paid to buy out CRT's trustee-manager (about S$50 million) and concerns over the large upfront cash payment to the current management team for their stake in the trustee-manager.

In addition, we believe that without an external trustee-manager, CRT could remove a hurdle to potential takeover by a J-Reit as speculated by some market participants due to the trust's persistent high yield and discount to its net asset value.