Capitaland Ascendas REIT (CLAR) has announced the acquisition of a modern logistics facility in Ohio for S$945m, according to a recent DBS report. This strategic move is expected to enhance the distribution per unit (DPU) by approximately 1%, with further organic growth anticipated through a 3.5% built-in annual escalation. Despite a temporary breach in gearing levels, which could exceed 40%, improvements are expected with the year-end valuations for FY25. DBS maintains a “BUY” recommendation with an unchanged target price of S$320.
Meanwhile, City Developments Ltd (CDL) has shown significant market momentum, with shares up 12% year-to-date and nearly 30% over the past three months. The report suggests a tactical play on potential special dividends and valuation adjustments, noting that market concerns over CDL’s gearing are overstated, with stable gearing at 0.7x. Positive factors include lower interest rates, resolution of a boardroom dispute, and an ongoing strategic review. DBS reiterates a “BUY” rating for CDL, with a target price of S$1,180.
These developments underscore the strategic positioning of both companies in the current market landscape, with potential for growth and value realisation in the near term.
