DW 4Q2012 S-REITs Review (Retail)

S-REITs have been releasing their results over the past 2 weeks. From now onwards, I will be doing reviews every quarter. Let’s start off with retail REITs.

1. CapitaMall Trust

Construction at the West Gate (source)

Positives/ Catalysts:

·       Completion of AEIs at Bugis+, Plaza Singapura, Atrium@Orchard and Clarke Quay. These properties have started to contribute more rental income.

·       Increase in distributable income.

·       High occupancy rate.

·       Achieve positive rental reversions of leases.

·       No refinancing needs in 2013.

·       AEI of IMM commencing in June 2013.

·       Completion of retail portion of the West Gate by 2013 year end. Several prominent tenants have already been secured, including department store Isetan, Food Republic, Yamaha Music School, Paradise Dynasty, Menya Musashi Ramen, Cafe Crema, and Paul Bakery.

·       Possible acquisition of iON Orchard in the future.

Negatives/ Risks:

·       DPU growth probably already priced in. Competition from JEM.

·       Trading at a huge premium to its NAV.

·       Yield has been compressed to less than 5%.

2. Frasers CentrePoint Trust

Successful completion of AEI at Causeway Point

Food Republic at Causeway Point Level 4
(There is another Halal food court at level 6, called 'Bagus')

     Positives/ Catalysts:

·       Completion of AEI at Causeway Point mall. Some tenants are still fitting out their stores. They shall be ready by the festive Chinese New Year period.

·       Achieve positive rental reversions of leases.

·       Increase in distributable income.

·       High occupancy rate.

·       Possible acquisition of Changi City Point in the future.

Negatives/ Risks:

·       DPU growth probably already priced in.

·       Trading at a premium to its NAV.

·       Yield has been compressed to less than 6%.