Singapore Retail REITs - DBS Research 2020-06-17: Shopping Starts This Weekend!

CAPITALAND MALL TRUST (SGX:C38U) FRASERS CENTREPOINT TRUST (SGX:J69U) LENDLEASE GLOBAL COMMERCIAL REIT (SGX:JYEU)

Singapore Retail REITs - Shopping Starts This Weekend!

Phase 2 reopening brought forward to 19 June; More than 90% of retail mall tenants can resume operations.
Shopper traffic this weekend will be key as Singaporeans take a breath of fresh air out of their ‘individual households’.
Re-iterate our positive stance on Retail REITs; top picks are Frasers Centrepoint Trust (SGX:J69U), CapitaLand Mall Trust (SGX:C38U), and Lendlease REIT (SGX:JYEU).

With community cases remaining stable despite the increase in workplace activity in Phase 1 of re-opening, Phase 2 of circuit breaker has now been brought forward to 19 June (previously expected to be end June/ early July).
The majority of trade sectors will be allowed resume operations including those within the fashion, fitness and education trade sectors.
Social gatherings will be allowed up to five persons, with home visitations allowed up to five persons as well.
Dine-in option will be available at F&B outlets, subject to a maximum of 5 per table.
Healthcare related tenants will also be given permission to re-operate, including beauty aesthetic services.
Entertainment tenants, on the other hand, will likely be able to re-open only in Phase 3, where larger sized gatherings will be allowed.

While we had anticipated the end of the storm for the retail sector to be close as per our recent upgrade on 29 May, the move to shift forward Phase 2 reopening comes as a positive surprise.
The green light will be given for more than 90% of all retail tenants in the various malls to resume operations.
In our view, the food & beverage, and beauty & health trade sectors will likely lead demand recovery as consumers are allowed to dine-in at F&B outlets, while adhering to crowd density measures.
On the ground sentiment show that Singaporeans (or those around us at least) are ready to flock out of their individual households after being cooped up for almost 2.5 months.
We anticipate a positive response to retail REITs. We re-iterate our BUY call on retail REITs, with Frasers Centrepoint Trust (SGX:J69U) (Target Price S$2.65), CapitaLand Mall Trust (SGX:C38U) (Target Price S$2.15) and Lendlease REIT (SGX:JYEU) (Target Price S$0.85) as our top sector picks.
See recent report:

Singapore Research DBS Group Research | Derek TAN DBS Research | https://www.dbsvickers.com/ 2020-06-16

SGX Stock Analyst Report BUY MAINTAIN BUY 2.150 SAME 2.150

BUY MAINTAIN BUY 2.650 SAME 2.650

BUY MAINTAIN BUY 0.850 SAME 0.850