Frasers Centrepoint Trust - DBS Research 2020-05-29: Suburban Giants To Lead Retail Recovery; Upgrade To BUY

FRASERS CENTREPOINT TRUST (SGX:J69U) | SGinvestors.io FRASERS CENTREPOINT TRUST (SGX:J69U)

Frasers Centrepoint Trust - Suburban Giants To Lead Retail Recovery

  • c.97% of Frasers Centrepoint Trust's tenants allowed to reopen doors during phase 2 of Circuit Breaker.
  • Suburban giants in the best position to capture first flock of shoppers post Circuit Breaker (phase2).
  • Rebound likely to be swift as these dominant malls contribute c.75% of Frasers Centrepoint Trust’s revenues.
  • Revised target price implies a 1.2x target P/BV.



Upgrade Frasers Centrepoint Trust to BUY, Target Price S$2.65.

  • The worst is likely over for local retail landlords as retail tenants can look to resume operations as early as the first week of July. Dominant suburban malls will likely lead the retail recovery, as the vast majority of Frasers Centrepoint Trust (SGX:J69U)’s tenants (c.97%) will be allowed to reopen their doors, from the current c.30% that are still maintaining operations.
  • Our revised target price implies a target P/BV ratio of 1.2x, and an implied FY20 target yield of 3.9%.


Where we differ: Dominant malls located within large residential catchment areas to lead recovery.

  • Frasers Centrepoint Trust’s portfolio of suburban malls will be in the best position to capture immediate shopper traffic and pent-up demand as retail malls reopen during phase 2 of post-Circuit Breaker measures. Rental revenues from suburban giants Northpoint, Causeway Point and Waterway Point contribute c.75% of Frasers Centrepoint Trust’s annual revenue, of which about half of their tenants are in trade sectors we anticipate to recover swiftly.
  • Moreover, additional support from the government and retail landlords announced in the Fortitude Budget should aid affected retailers in the reopening of their businesses.


PGIM acquisition to return to spotlight in 2H20.







Singapore Research Team DBS Group Research | Derek TAN DBS Research | https://www.dbsvickers.com/ 2020-05-29
SGX Stock Analyst Report BUY UPGRADE HOLD 2.65 UP 2.050



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