ESR-REIT - Near-Term Cost Hiccup, Growth Plans Intact
- ESR-REIT (SGX:J91U)'s 1Q22 DPU of S$0.00723 was slightly below expectations at 23.3% of our FY22F forecast.
- Portfolio occupancy rate stood at 91.5% in 1Q22. ESR-REIT leased a total of 305,613 sqft of space in 1Q, with a retention rate of 75.6%. There was strong leasing interest received from third-party logistics providers and end-users with new demand from chip manufacturers and electronics companies looking to expand amidst the global supply chain disruptions. Rental reversion during the quarter was +3.1%,
- We lower our FY22-24F DPU estimates for ESR-REIT (SGX:J91U) by 4-7.9% to factor in higher operating expenses. Accordingly, our DDM-based target price for ESR-REIT (SGX:J91U) is lowered to S$0.474. At this level, ESR-REIT continues to offer attractive dividend yield of 7%.
Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @ https://www.itradecimb.com.sg/.
EING Kar Mei CFA CGS-CIMB Research | LOCK Mun Yee CGS-CIMB Research | https://www.cgs-cimb.com 2022-04-28 2022-04-28
Previous report by CGS-CIMB:
2022-01-28 ESR-REIT - Stable Income, Attractive Yield
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