Jefferies Maintains Buy Ratings for Mapletree Logistics and Suntec REIT
January 28, 2021 – Jefferies has maintained buy ratings for Mapletree Logistics Trust and Suntec REIT on account of positive performance and recovery prospects for 2021.
Recent analyst reports from the think tank said that while Mapletree Logistics Trusts’ portfolio is likely to witness some frictional vacancy as tenants adjust space requirements in light of new operating conditions, the REIT has a large diversified portfolio to minimise impact to income.
“The regional network is well positioned to benefit from intra-Asia trade flows, growing domestic consumption, growing e-commerce and supply chain shifts,” Jefferies Equity Analyst Krishna Guha said.
Jefferies has put a price target of S$2.4 on Mapletree Logistics Trust, with an upside scenario of S$2.6 and a downside scenario of S$1.8.
The research house also assigned a buy rating for Suntec REIT.
According to Jefferies, while high gearing and potential dilution from convertible bonds are things to watch for Suntec, the REIT offers 50 to 100 basis points higher yield against its peers.
“Further, as the operation of retail malls improves, Suntec can potentially top up distribution to the tune of S$40 million (S$30 million). Australia’s office portfolio is expected to provide DPU [distribution per unit] stability,” Guha said.
Jefferies raised its Suntec price target to S$1.75 from S$1.70 with an upside scenario of S$2 and a downside scenario of S$1.35.
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