Friday, March 6, 2015

Frasers Commercial Trust

Frasers Commercial Trust (FCT): OCBC maintains Buy with TP of $2.27 following its 1QFY15 results.

House expects growth to be driven by full contribution from Changi City Point and continued positive rental reversions, particularly from its larger malls such as Causeway Point and Northpoint. Despite the soft retail sector outlook, OCBC is still optimistic on FCT’s resilient and defensive portfolio of suburban malls.

In addition, there are interesting developments managed by its sponsor Frasers Centrepoint Limited include Waterway Point and Northpoint City. The latter will comprise over 500 retail outlets spanning an estimated 850,000 sf, taking into account the existing Northpoint Shopping Centre (owned by FCT). Although there could be some cannibalisation from the enlarged retail space upon completion, this would only take place in 2018.

Moreover, house believes FCL will seek to find the optimal tenant mix and extract synergies from the integration with the existing mall.

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