Brokers' take

SPH Reit | Buy Target price: S$1.07 Oct 10 close: S$1.01 DBS Group Research, Oct 10

We believe that SPH Reit can continue to deliver resilience with sticky occupancies while its low gearing of 26 per cent empowers the manager to undertake value-accretive acquisitions. The Q4 2017 results once again highlight the ability of SPH Reit to deliver steady distributions despite ongoing market uncertainties. The catalyst will come when the manager executes on the purchase of Seletar Mall.

We believe timing of the acquisition of The Seletar Mall (around S$500 million) from its sponsor is near and continue to price in the deal in our estimates. We expect the deal to complete in 2019 (2018 previously), leading us to raise our target price from S$1.04 to S$1.07 on lower new equity issuance assumptions.