REIT's Asset Sales Could Place Pressure on Near-Term Earnings
Dow Jones
Aug 18
0508 GMT - ESR-REIT's asset sales are likely to put some pressure on the real-estate investment trust's near-term earnings, says DBS Group Research's Dale Lai in a note. He has an upbeat view on the REIT's ongoing portfolio recalibration over the longer term. The trust is replacing shorter-tenure Singapore assets with freehold logistics properties in Australia that offer longer weighted average lease expiries, which should improve the portfolio's resilience. However, the loss of income from divested assets are likely to weigh on earnings, with contributions from the Australian acquisitions only likely to commence after completion in mid-September. DBS has a hold rating and 2.80 Singapore dollar target price on ESR-REIT's units, which fall 0.4% to S$2.35.
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