FRASERS CENTREPOINT TRUST (SGX:J69U)
Frasers Centrepoint Trust - Spending On The Mend
Improving suburban mall metrics, BUY
- Frasers Centrepoint Trust (SGX:J69U)'s 1H22 DPU rose 2.3% y-o-y and 0.8% h-o-h, driven by higher occupancy and recovering rents. We expect tenants’ sales to gain traction in 2H22 as restrictions ease and consumer sentiment improves.
- Strong leasing momentum, tenant remixing and high mall occupancy should support rental upside. We continue to see suburban malls anchoring Singapore’s retail sector recovery during the reopening phase, with resilient operating metrics for Frasers Centrepoint Trust’s sizeable suburban malls portfolio underpinning its DPU visibility.
Higher occupancy, leasing momentum
- Frasers Centrepoint Trust's portfolio occupancy climbed to 98.7% in 2Q22 (from 97.2% in 1Q22), with all of its nine retail malls reporting stable or higher occupancy, and two (Northpoint City North Wing and Hougang Mall) being fully occupied.
- We see improvement at the Central Plaza office asset, where occupancy is low at 77.3% (it fell from 91.8% in 4Q21) due to the exit of an anchor tenant, but plans to reconfigure the space to draw service trade tenants should raise occupancy and rents.
- Frasers Centrepoint Trust has further de-risked its leasing expiries, with 15.0% of renewals in FY22E (from 22.8% in 1Q22).
Reversion turned positive, set to rise
- Tenant sales continued to improve with easing of dining-in carpark income.
Strong balance sheet, deal upside
- Frasers Centrepoint Trust's balance sheet remains strong with gearing at 33.3% (from 34.5% at end- Dec 21) and interest cover maintained for Frasers Centrepoint Trust (COE: 6.2%, LTG: 2.0%) are unchanged. BUY.
- See
Chua Su Tye
Maybank Research
|
https://www.maybank-ke.com.sg/
2022-04-27
SGX Stock
Analyst Report
2.900
SAME
2.900
