CIMB Research downgraded CapitaMall Trust to 'underperform' from 'outperform' and lowered its target price to S$2.23 from S$2.43, citing the shopping mall owner's plans to raise funds despite the lack of funding needs.
As of 0137 GMT, CapitaMall Trust units fell 2.4 percent to S$2.07, but have gained nearly 22 percent since the start of the year, compared to the FTSE ST Real Estate Industrial Trust's 32 percent rise.
CapitaMall Trust said on Thursday it would raise S$250 million by selling 125 million new units at S$2.00 each, which would go towards funding capital expenditure needs and upgrading works for its properties.
CIMB cut its 2013-2014 distribution per unit estimates for CapitaMall Trust by up to 4 percent to reflect the new issue, which translates to an unattractive yield of 4.8 percent for next year compared to its peers.
The brokerage prefers Mapletree Commercial Trust and Frasers Centrepoint Trust for exposure to shopping malls.
"Despite the good placement price and small dilution... we are disappointed that CapitaMall Trust has chosen to raise equity in the absence of major funding needs for acquisitions and asset enhancement initiatives," said CIMB in a report.
The brokerage said it understands that the trust has no concrete plans for acquisitions for now even though it remains on the look out.
0955 (0155 GMT)