Frasers CT – DMG
FRASERS CENTREPOINT TRUST (FCT SP: S$1.76): Venturing overseas
FCT has ventured into Malaysia through the acquisition of a 27% stake in Malaysian-listed Hektar Reit for S$46.6m. At the same time, its sponsor FCL would also take a 40% share of Hektar Reit’s manager. The purchase would have a small but accretive immediate impact to FCT’s bottomline. However, more importantly, it opens a strategic platform for FCT to enter into the Malaysian retail property market as well as opportunities for cross-border operational synergies. In terms of growth, Hektar Reit offers potential for organic and acquisition growth with its planned pipeline of 1.25msf GFA. This would further boost FCT’s existing growth prospects in Singapore as well as accelerate its objective of doubling NLA under management over the next 3 years. Our fair value target price is raised to $1.90. Maintain Neutral.