SPH REIT

SPH REIT: Credit Suisse initiating coverage on SPH REIT with a NEUTRAL Call and $1.05 TP. Supportive sector fundamentals should continue to underpin rental growth, with healthy income growth (low unemployment) as well as a manageable supply outlook. Two Orchard Road malls, completing this year, are already 80-100% pre-leased; Clementi Mall is supported by a strong catchment and good transport links. Further, growth is likely to be driven by acquisitions. SPH REIT has ROFR for SPH's (sponsor) Asia Pacific retail-focused assets. The Seletar Mall may be in SPH REIT's future pipeline. SPH REIT has the lowest gearing among SG-dominant retail REITs, at 27%, implying S$1 bn debt headroom assuming 45% gearing. SPH REIT trades on 5.5% FY14 yield (5.3% ex. income support).