Frasers Centrepoint Trust - CGS-CIMB Research 2020-07-01: One Step Closer

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

Frasers Centrepoint Trust - One Step Closer



Acquiring another 12% in PGIM Real Estate AsiaRetail Fund Limited



An earnings-accretive acquisition

  • The acquisition will increase Frasers Centrepoint Trust’s interest in ARF from 24.82% to 36.89%. This, together with the holdings of Frasers Property (SGX:TQ5)'s 63.1%, raises the group’s shareholding in ARF to ~100%. The acquisition will be fully funded by debt and is expected to raise Frasers Centrepoint Trust’s proforma gearing from 32.9% to 36.2%.
  • Based on its proforma estimates, the deal is expected to be slightly DPU accretive at 0.13%, while NAV remains unchanged.


One step closer to acquiring assets under ARF

  • We see this as one step closer to acquiring the assets under ARF which owns five suburban retail malls (Tiong Bahru Plaza, White Sands, Hougang Mall, Century Square and Tampines) in Singapore and one suburban retail mall in Malaysia (likely Setapak Central). Being purely in a suburban mall space, ARF’s portfolio fits well into Frasers Centrepoint Trust’s portfolio and if acquisitions materialise, would further enhance Frasers Centrepoint Trust’s position as a pure suburban mall landlord.
  • Quality malls are hard to come by in Singapore at reasonable prices and we see the potential acquisition of the assets under ARF as a good opportunity for Frasers Centrepoint Trust to widen its footprint in the suburban space and further underpins its income stability.
  • ARF’s assets attract strong traffic of 86 person psf versus listed malls’ 84 person psf on average. Aside from retail malls, ARF also owns an office property, Central Plaza in Tiong Bahru, Singapore.


Maintain ADD






EING Kar Mei CFA CGS-CIMB Research | LOCK Mun Yee CGS-CIMB Research | https://www.cgs-cimb.com 2020-07-01
SGX Stock Analyst Report ADD MAINTAIN ADD 2.490 SAME 2.490



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