Frasers Centrepoint Trust

Frasers Centrepoint Trust: Daiwa believes the recent private placement for funding of Changi City Point (CCP) has finally cleared the equity fundraising overhang. The cap rate for CCP, obtained from two valuers, was 5.7-5.75%, which is considerably higher than the cap rate range of 5.2-5.6% for FCT's existing properties. Management appeared confident on the long-term prospects for CCP, highlighting the proven demand from the surrounding offices/business parks in Changi Business Park, the Singapore Expo (convention centre) next door, education institutions (ITE College East and the Singapore University of Technology & Design) a short walk away, and nearby residential estates. The CCP acquisition should increase FCT's assets under management to $2.4b and management indicated that it will try to grow this to $5b within 5-6 years, mostly through its sponsor's pipeline. Daiwa maintains Outperform rating with TP of $2.20.