Federal Realty Investment Trust (FRT) is positioned for accelerating growth through targeted acquisitions that focus on improving portfolio returns, UBS Securities said.

The firm said in a Monday note that purchases of Town Center Plaza and Crossing in Kansas and Annapolis Town Center in Maryland fit the company's strategy of adding well-located, under-managed assets in affluent markets to its portfolio.

The brokerage noted that the Kansas acquisition marks Federal Realty's entry into a new Midwest market, with the company planning to expand into several new regions over the next few years.

UBS expects these properties to contribute about 4.5% compound annual growth in net operating income over the next five years.

Additionally, the company has identified roughly $1.5 billion in slow-growth retail and residential assets that it could sell to fund new investments. The firm sees disposal of these assets as a way to recycle capital into higher-return town-center assets without materially increasing leverage.

UBS has a neutral rating and $103 price target on the stock.

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