DBS Vickers has raised its target price on Frasers Centrepoint Trust (FCT) to $2.11 from $2.04 previously, on higher earnings expected following asset enhancement initiatives at Northpoint, a mall at Yishun that’s part of its portfolio.
“With an enlarged footprint, we see Northpoint as a key driver in accelerating growth in the medium term,” says DBS Vickers in its March 7 report.
“Our positive stance comes from the group having close to 75% market share of retail malls on a comparable malls basis, and entrenching itself further as a major player in the northern part of Singapore,” the broker adds.
The broker notes that northern Singapore now has the lowest retail space density in the country but its population is fast growing, which bodes well for retailers in the medium term.
DBS Vickers notes that FCT has historically achieved returns of between 11% and 17% on its previous AEIs, and based on this, is assuming a return of 11.5% on the estimated capital expenditure of $45 million on Northpoint.
The broker is raising its distribution per unit estimates to 11.89 cents for FY16 and to 12.07 cents come FY18, which represents a yield of 6.1% to 6.2%.
At 11.02am, FCT was unchanged at $1.955.
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“With an enlarged footprint, we see Northpoint as a key driver in accelerating growth in the medium term,” says DBS Vickers in its March 7 report.
“Our positive stance comes from the group having close to 75% market share of retail malls on a comparable malls basis, and entrenching itself further as a major player in the northern part of Singapore,” the broker adds.
The broker notes that northern Singapore now has the lowest retail space density in the country but its population is fast growing, which bodes well for retailers in the medium term.
DBS Vickers notes that FCT has historically achieved returns of between 11% and 17% on its previous AEIs, and based on this, is assuming a return of 11.5% on the estimated capital expenditure of $45 million on Northpoint.
The broker is raising its distribution per unit estimates to 11.89 cents for FY16 and to 12.07 cents come FY18, which represents a yield of 6.1% to 6.2%.
At 11.02am, FCT was unchanged at $1.955.
Click Here To Register For Free Trial Services OR Give A Missed Call : +6531581402 Follow Us On Twitter : www.twitter.com/epicresearchsg Like Us On Facebook : www.facebook.com/EpicResearchSingapore Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg
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