Frasers Centrepoint Trust

Frasers Centrepoint Trust: UOB Kay Hian maintains Buy with $1.80 TP. House hosted client luncheon with mgt recently. Investor queries were centred on the defensiveness of the portfolio and forward catalysts for the REIT. Key highlights are as follows. 1) FCT’s suburban retail portfolio is defensive and remains resilient in the face of any potential slowdown. 2) FCT will continue to reap the benefits from positive rental reversions at Causeway Point over the next 12 months. 3) Changi City Point remains the near-term acquisition target. Upcoming Downtown Line 3 to enhance connectivity at Changi City Point. 4) Participating in upcoming rights issue in Hektar REIT 5) Besides the more immediate pipeline in Singapore from FCT’s sponsor F&N, FCT is also looking at further acquisition opportunities in Malaysia. 6) Conservative gearing structure likely to remain. Overall, house maintain BUY with an unchanged target price of $1.80. Use the dividend discount model (required rate of return: 7.4%, terminal growth:2.0%) to value FCT.