It prefers those with stronger earnings growth potential and/or have potential to deliver earnings surprises. Preferred S-Reits are Perennial China Retail Trust (PCRT), MGCCT and Cambridge Industrial Trust based on their upside potential.
PCRT is seen as attractive due to its valuations and earnings visibility as operations are ramping up at its malls. New development assets are also completed and seen generating cashflow. Target price is around $0.84.
MGCCT offers investors “an attractive opportunity to own iconic, best-of-breed commercial assets”. The trust has resilient cashflow with strong organic growth drivers. The target price at $1.18.
As for Cambridge, its completed acquisitions and asset enhancement initiatives (AEIs) are expected to contribute positively. Its target price is seen around $0.93. I personally am not comfortable with Cambridge because it lacks a tai kor.
It advises investors who benefited from price gains in Mapletree Industrial Trust, AReit, Suntec Reit and Parkway Life Reit shares, to consider selling these.