MGCCT

MGCCT: The recent 2QFY14 results beat StanChart's DPU estimates by 8% due to higher rental income at Festival Walk (FW), while Gateway Plaza (GWP) achieved reversions of 81%, in line with expectations. StanChart upgrade its FY14-17E DPU estimates by 6% on average to account for higher signing rents at FW and GWP. House now estimate that MGCCT would offer a 6.9% FY14E DPU yield compared to 6.1% for retail SREITs. House also expect MAGIC’s DPU to rise by 13% next year, driven largely by organic rent reversions. This is the fastest DPU growth rate among large-cap SREITs. StanChart upgrades MGCCT to Outperform with TP $1.03 (from $0.94).