FRASERS CENTREPOINT TRUST
J69U.SI
Frasers Centrepoint Trust - Top Pick of retail REITs
- CBRE released 2Q16 retail rents data. In brief, although both declined slightly suburban rents outperformed prime orchard road.
- Suburban retail rents have fallen 0.7% QoQ to SGD29.45 psf/mth, while rents in orchard road declined 1.1% QoQ to SGD32.50psf/mth. This confirms our preference for suburban mall space, as it proves to be highly resilient.
- In regards to orchard road rents, we would like to highlight two pointers to investors:
- Rental rates within Orchard Road should be supported by the lack of supply pipeline in the region.
- We are expecting stronger headwinds for other property asset classes, such as office and industrial, as compared to the retail segment.
- Therefore, we remain our preference for retail REITs, with Frasers Centrepoint Trust (FCT SP, Buy TP: SGD2.22) as our top pick of the sector.
- The REIT yields 6.0%, with low gearing ratio of 28.3%.
Ivan Looi
RHB Invest
|
Vijay Natarajan
RHB Invest
|
http://www.rhbinvest.com.sg/
2016-06-10
RHB Invest
SGX Stock
Analyst Report
2.22
Same
2.22
