Fortune REIT - DBS Research 2018-07-24: FY18 Interim Results Preview

Fortune REIT - DBS Group Research Research 2018-07-24: Fy18 Interim Results Preview FORTUNE REAL ESTATE INV TRUST SGX:F25U

Fortune REIT - FY18 Interim Results Preview

  • 1H18 distribution income expected to grow by a modest 3% on higher rental income. 
  • Reversionary growth should stay healthy. 
  • BUY With HK$10.50 Target Price. 


What ’s New 

  • Fortune REIT will announce its interim results for FY18 on 27 July. We forecast its distribution income to rise 3% to HK$501m, led by a modest growth in rental income. 
  • We forecast total revenue to grow 3% to HK$1.03bn, thanks to positive rental reversion. We expect its rental reversion to stay healthy at 10-15% on renewals in 1H18. Cost-to-income ratio is estimated to remain stable at c.25- 26% (1H17: 25.3%). NPI should also grow 3%. io.
  • Fortune REIT has just commenced the asset enhancement works at West Block of Fortune Kingswood, which are carried in three phases with targeted completion in 2020. io.
  • Key things to watch for include asset enhancement progress update, outlook of retail reversionary growth, interest-rate hedging, and acquisition prospects, among others. 





Jeff YAU CFA DBS Group Research Research | Ian CHUI DBS Research | Jason LAM DBS Research | https://www.dbsvickers.com/ 2018-07-24
SGX Stock Analyst Report BUY Maintain BUY 10.500 Same 10.500



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