Singapore office rents could bottom in the near term and provide some support for real estate investment trusts such as Suntec Real Estate Investment Trusts (SUNT.SI) and CapitaCommercial Trust, CIMB said.
The broker upgraded its rating on Suntec to outperform from trading buy and highlighted Suntec and CapitaCommercial Trust as its top picks for office property stocks.
Singapore office rents have come under pressure in recent quarters as the weaker global economic outlook led firms to hold back their expansion.
“We believe that the office sector is approaching the end of a de-rating cycle. Average rents are now back at the second quarter of 2009 levels, around the period of the global financial crisis,” CIMB said in a report.
Suntec REIT rose 1.2%, while CapitaCommercial Trust inched downd 0.4% in a flat broader market.
Unit prices of Suntec REIT and CapitaCommercial Trust have risen by about 17% so far this year, slightly outperforming a rise in the benchmark index.
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