CapitaCommercial Trust has delivered an interesting presentation on their portfolio. According to their slides, the rents have bottomed out and is slowly increasing again. This would mean that their yield should be able to increase. If it ever reaches its peak again, the rents would be doubled.
If we look at a potential increment of rents by 50% over the next one to two years, we are looking at the yield improving to about 8% which actually is my yield target. With its current trading price below NAV + it has high secured NAV i.e. 80% of my investment would be secured because it is not mortgaged. We have a potential gem in the market.
I am looking at how I am going to re-position my portfolio and this is one which is under my consideration.