DBS Group is maintaining its "buy" recommendation on Frasers Centrepoint Trust with a revised target of $2.10 as FCT offers investors a "steady DPU profile".
"This is made possible by FCT’s current conservative strategy of paying the majority of its management fees in cash, which enables FCT to temporarily increase payment of fees in units to sustain DPU," says lead analyst Derek Tan in a Monday report.
FCT also has a "near-monopoly of shopping malls in the north". Northpoint and Causeway Point together contribute roughly 71% of FCT’s NPI.
In recent years, DBS says both malls have performed well, delivering strong tenant sales growth and rental reversions after successful AEI works.
"With limited retail supply in the north of Singapore and strong population growth (88% over the next five to 10 years), we believe that FCT will be a beneficiary of increase in retail spending and demand for shop space," says Tan.
"Upon the completion of the AEI and integration of Northpoint and Northpoint City in 2018, the quality of FCT’s earnings will improve. Its position in the North will be further strengthened by having the destination mall to-be."
Units of FCT last traded at $2.
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"This is made possible by FCT’s current conservative strategy of paying the majority of its management fees in cash, which enables FCT to temporarily increase payment of fees in units to sustain DPU," says lead analyst Derek Tan in a Monday report.
FCT also has a "near-monopoly of shopping malls in the north". Northpoint and Causeway Point together contribute roughly 71% of FCT’s NPI.
In recent years, DBS says both malls have performed well, delivering strong tenant sales growth and rental reversions after successful AEI works.
"With limited retail supply in the north of Singapore and strong population growth (88% over the next five to 10 years), we believe that FCT will be a beneficiary of increase in retail spending and demand for shop space," says Tan.
"Upon the completion of the AEI and integration of Northpoint and Northpoint City in 2018, the quality of FCT’s earnings will improve. Its position in the North will be further strengthened by having the destination mall to-be."
Units of FCT last traded at $2.
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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