Brokers' take

Frasers Centrepoint Trust (FCT) | Neutral May 17 close: S$2.40 Target price: S$2.25 RHB Research Institute, May 17

FCT's much-awaited acquisition of Waterway Point is a positive move that will diversify earnings, strengthen its tenant base and provide growth opportunities. The mall is directly connected to the Punggol MRT and LRT stations, and is part of an integrated development - which gives it a catchment population.

In addition, the mall's trading area has one of the lowest retail mall floor space per capita at 2.77 sq ft, versus Singapore's overall average of 5.9 sq ft. This has translated to healthy tenant sales growth (+10 per cent) and shopper traffic (+3.9 per cent) last year. We expect this trend to continue, albeit at a slightly slower pace in the coming years - which gives it room for positive rental reversions ahead. We expect positive rent reversions of 3 to 5 per cent in the near term. Overall, we believe the mall is a good strategic fit for FCT's suburban mall portfolio, and …