CIMB Research said reports of initial public offerings in Singapore and a recent capital-raising exercise by Cache Logistics Trust point to an opportunity for equity fund raising for Singapore real estate investment trusts (REITs).
Cache’s $57 million placement, priced at the top end of the pricing range, and news of IPOs such as M&L REIT point to improved sentiment, spurring questions about whether others will follow suit, CIMB said.
It said candidates looking to catch the wave should have traits such as recent share price appreciation, a price-to-book value of near or above one time, assets for acquisition and the need for equity fund-raising for acquisition.
“We believe that such equity fund raising could offer a cheaper entry for investors looking to partake in these REITs,” CIMB said. Its top picks are CDL Hospitality Trusts and CapitaCommercial Trust for portfolio upside and strong balance sheets.
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