Find out who among S-REITs will be the loser in September results season

There are 2 predicted sectors.

According to Barclays, the REITs will kick-start the Sep quarter results season from 14 Oct.

While Barclays is most positive on the Office, Industrial, Retail and Residential sectors in that order, thjey expect the Sep quarter DPU for the Office and Industrial sectors to be flattish to down slightly, due to company-specific issues such as expiry of income support (CCT -2% y/y), AEI disruption (SUN -4% y/y), exit of key tenant (MINT -1% y/y).

These are, however, relatively well flagged.

Here's more from Barclays:

MLT could register 5% DPU y/y growth on earlier acquisitions. Retail REITs and residential developers, on the other hand, could register decent growth due to completion of previous years’ investments (CT), and progress with or delivery of developments (CAPL, KPLD, CIT), especially CAPL, which we expect to be strong due to delivery of its Shanghai residential projects.

We would look beyond near-term results to the potential cyclical recovery in Office, resilient dividends in Industrial, expensive valuations for the retail majors and expected deterioration of Singapore residential fundamentals in 2014-15.

Our top picks are Keppel REIT (KREIT), CapitaCommercial Trust (CCT), Ascendas REIT (AREIT) and Mapletree Industrial Trust (MINT), all OW. W

e are Underweight the residential developers – CDL and KPLD, except for CAPL, where we have an OW rating due to its more diversified profile (10% Singapore residential) and attractive valuation (36% disc to RNAV).

We have an Equal Weight rating on Suntec REIT (SUN), Mapletree Logistics Trust (MLT), CapitaMall Trust (CT) and CapitaMalls Asia (CMA) on their fair risk/rewards. Please refer to our recent reports Correction in sight (Oct 1) and Developer fundamentals weakening (Sept 27).

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