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UOB KAYHIAN |
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Suntec REIT Step by step
■ SUN’s 3Q/9M DPU of 2.491/7.398 Scts were within our expectations at 25%/74% of our FY18F forecast. ■ We expect office revenue to benefit from the rental upcycle, while improving retail offerings should drive up Suntec Mall’s traffic and sales. ■ Maintain Add with slightly lower TP of S$2.06
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REITs – Singapore
3Q18: Suntec (In Line), 2QFY19: MINT (In Line), 4QFY18: FCT (In Line) Suntec REIT’s, MINT’s and FCT’s results came in line with expectations. Suntec REIT: 3Q18 income was dragged by lower contributions from 177 Pacific Highway on a weaker AUD. Maintain HOLD with a target price of S$2.01. MINT: Continues to face challenges in backfilling spaces, from the exit of major tenants. Maintain HOLD with a target price of S$1.94. Entry price: S$1.76. FCT: FY18 results were led by Northpoint City North Wing, which saw improvements post-AEI. Maintain BUY with a target price of S$2.32.
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| OCBC | PHILLIP SECURITIES |
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Frasers Centrepoint Trust: A blip but full-year growth still positive
Frasers Centrepoint Trust (FCT) reported an in-line set of 4QFY18 results. DPU fell 3.6% YoY to 2.862 S cents, but if we strip out one-off property expenses, it would have come in flat. All of FCT’s properties, with the exception of Northpoint City North Wing (NPNW), saw a compression in cap rates by 15-25 bps during its valuation exercise. Operationally, FCT’s portfolio occupancy improved 0.7 ppt QoQ to 94.7%. We expect improvements at Bedok Point and Anchorpoint ahead due to secured lease commitments. Overall rental reversions came in at only a mild +0.2% in 4QFY18, but were 3.2% higher for the full-year (FY17: 5.1%). We trim our DPU forecasts for FY19 and FY20 by 2.1% and 2.4%, respectively, as we factor in higher finance costs and lower distribution from associates and JVs. As we also roll forward our valuations, our fair value inches up from S$2.49 to S$2.50. Maintain BUY.
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Mapletree Industrial Trust Operational weakness SINGAPORE | REAL ESTATE (REIT) | 2Q19 RESULTS
2Q19 gross revenue and DPU were within our estimates Portfolio WALE stands at 3.5 years and aggregate gearing of 35.1% Operational rental weakness was mitigated by inorganic contribution Resumption of DRP to strengthen balance sheet and fund development projects Maintain Neutral; new target price of $1.99 (previous: $2.09)
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Check out our compilation of Target Prices
