Frasers Centrepoint Trust

Buy

Target price: $2.48

Jan 24 close: $2.31

Broker: DBS Group Research, Jan 24

We raised our rental growth assumptions at key assets over the next few years, and we lifted the target price by 4.7 per cent as a result.

We forecast a 7 per cent rise in distribution per unit (DPU) in 2018, against the consensus of

2.5 per cent, as Northpoint returns to full operations; and annual DPU growth of around

4 per cent to 5 per cent in the next couple of years, whereas consensus believes DPU will stay flat.

Given the enlarged footprint and lack of supply in the north of Singapore, Frasers Centrepoint Trust retains its bargaining power in the region. Target price was raised from $2.37 to $2.48 as we adjust rental reversions higher at key assets.

Maintain "buy".

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