Frasers Centrepoint Trust (FCT) reported 3QFY13 DPU of 2.85 S cents, representing a YoY growth of 9.6%. This brings the 9MFY13 DPU to 7.95 S cents (+8.9%), forming 73.2% of our FY13F DPU. This is largely in line with our expectations, as we expect the remaining S$2.9m retained in 1H to be distributed in 4Q. Key drivers for 3Q performance remained Causeway Point (CWP) and Northpoint. However, pockets of weakness persisted at YewTee Point and Bedok Point. Looking ahead, FCT expects CWP and Northpoint to remain as the main engines for growth, as leases amounting to a substantial 75.6% of FCT’s gross rent are up for renewal in FY14, and positive rental reversions are still expected. On its acquisition front, FCT believes that the injection of Changi City Point in FY13 now appear remote as the strata title division of One@Changi City is still ongoing. We are keeping our forecasts largely unchanged, but as we switch our valuation to dividend discount model and factor in higher risk free rates, our fair value drops from S$2.13 to S$1.96. Maintain HOLD on FCT.
3QFY13 results within view
Frasers Centrepoint Trust (FCT) reported its 3QFY13 results last evening. NPI climbed 15.4% YoY to S$28.5m, while distributable income rose 14.2% to S$23.1m. During the quarter, FCT also released S$0.4m or 0.05 S cents per unit from cash retained in 1HFY13. As such, 3Q DPU stood at 2.85 S cents, representing a YoY growth of 9.6%. For 9MFY13, NPI was up 11.4% to S$84.3m, whereas DPU was up 8.9% to 7.95 S cents, forming 73.2% of our FY13F DPU of 10.86 S cents (consensus: 10.9 S cents). This is largely in line with our expectations, as we expect the remaining S$2.9m retained in 1H to be distributed in 4Q.
No surprises in underlying performance
Key driver for 3Q performance remained Causeway Point (CWP), which registered a 30.3% YoY growth in the mall’s NPI amid significantly improved occupancy and rental rates post asset enhancement. In addition, Northpoint saw its NPI grew 7.9% YoY on positive rental growth and car park income. However, pockets of weakness persisted at 1) YewTee Point as FCT continued to seek good tenants to fill up the space vacated by two previous tenants, and 2) Bedok Point as the mall undergoes a repositioning exercise. Nevertheless, we understand that FCT has recently found a quality tenant at YewTee Point, and this should lead to better occupancy and performance in 4Q. At Bedok Point, we note that management intends to secure an anchor tenant for its basement one. This may translate to a more stable performance at the mall, although asking rents may be under pressure.
Maintain HOLD on valuation grounds
Looking ahead, FCT expects CWP and Northpoint to remain as the main engines for growth, as leases amounting to a substantial 75.6% of FCT’s gross rent are up for renewal in FY14, and positive rental reversions are still expected. On its acquisition front, FCT believes that the injection of Changi City Point in FY13 now appear remote as the strata title division of One@Changi City is still ongoing. We are keeping our forecasts largely unchanged, but as we switch our valuation to dividend discount model and factor in higher risk free rates, our fair value drops from S$2.13 to S$1.96. Maintain HOLD on FCT.
Frasers Centrepoint Trust (FCT) reported its 3QFY13 results last evening. NPI climbed 15.4% YoY to S$28.5m, while distributable income rose 14.2% to S$23.1m. During the quarter, FCT also released S$0.4m or 0.05 S cents per unit from cash retained in 1HFY13. As such, 3Q DPU stood at 2.85 S cents, representing a YoY growth of 9.6%. For 9MFY13, NPI was up 11.4% to S$84.3m, whereas DPU was up 8.9% to 7.95 S cents, forming 73.2% of our FY13F DPU of 10.86 S cents (consensus: 10.9 S cents). This is largely in line with our expectations, as we expect the remaining S$2.9m retained in 1H to be distributed in 4Q.
No surprises in underlying performance
Key driver for 3Q performance remained Causeway Point (CWP), which registered a 30.3% YoY growth in the mall’s NPI amid significantly improved occupancy and rental rates post asset enhancement. In addition, Northpoint saw its NPI grew 7.9% YoY on positive rental growth and car park income. However, pockets of weakness persisted at 1) YewTee Point as FCT continued to seek good tenants to fill up the space vacated by two previous tenants, and 2) Bedok Point as the mall undergoes a repositioning exercise. Nevertheless, we understand that FCT has recently found a quality tenant at YewTee Point, and this should lead to better occupancy and performance in 4Q. At Bedok Point, we note that management intends to secure an anchor tenant for its basement one. This may translate to a more stable performance at the mall, although asking rents may be under pressure.
Maintain HOLD on valuation grounds
Looking ahead, FCT expects CWP and Northpoint to remain as the main engines for growth, as leases amounting to a substantial 75.6% of FCT’s gross rent are up for renewal in FY14, and positive rental reversions are still expected. On its acquisition front, FCT believes that the injection of Changi City Point in FY13 now appear remote as the strata title division of One@Changi City is still ongoing. We are keeping our forecasts largely unchanged, but as we switch our valuation to dividend discount model and factor in higher risk free rates, our fair value drops from S$2.13 to S$1.96. Maintain HOLD on FCT.
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