Ord Minnett revisits REITs after recent market falls and nominates GPT Group as its least favourite sector pick, given it has the lowest interest rate hedging in the sector, at a time of rising inflation.
GPT Group has also raised its gearing to its highest level since 2008 and Ord Minnett spies an asset correction in the wings.
The broker also believes vacancy risk exists in the company's office portfolio, with more than 30% of the portfolio due to expire before the end of 2024.
Lighten rating retained. Target price is $4.60.
Sector: Real Estate.
Target price is $4.60.Current Price is $4.47. Difference: $0.13 - (brackets indicate current price is over target). If GPT meets the Ord Minnett target it will return approximately 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).
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