What’s the new SPC mall’s im­pact?

Singapore Business Review - - FIRST -

Low Pei han, an­a­lyst at OCBC

In terms of con­tri­bu­tion to rental and prop­erty-re­lated in­come, we es­ti­mate about S$17m p.a. (at steady state) from the mall, up from ~S$8m-$9m an­nu­ally. This com­pares to Sing­post’s to­tal rental and prop­erty-re­lated in­come of S$39m in FY16 be­fore the mall was closed for re­de­vel­op­ment. As of 30 Septem­ber 2017, com­mit­ted oc­cu­pancy was 80.4%. How­ever, the mar­ket’s fo­cus is still likely to be on the group’s strate­gic re­view over the next few months.

Sachin Mit­tal, an­a­lyst at DBS

The com­pany has an­nounced that the mall had 80.4% com­mit­ted oc­cu­pancy as of 30 Septem­ber 2017 with ma­jor ten­ants such as Fair­price, Golden Vil­lage, and Ko­pi­tiam. This is in­line with our fore­cast where we have as­sumed that the SPC mall will open pro­gres­sively in 2HFY18F and full rental in­come con­tri­bu­tion for the mall will kick in from FY19. We es­ti­mate SPOST’S rental in­come to rise to S$17m in FY19F ver­sus only S$6m in FY18F on the back of this. We had high­lighted in our pre­vi­ous note that in the medium term, the po­ten­tial di­vest­ment of SPC mall could be a cat­a­lyst for the stock.

John Cheong, an­a­lyst at May­bank Kim Eng

It has achieved a healthy oc­cu­pancy rate of 80.4%, helped by its con­ve­nient lo­ca­tion, next to Paya Le­bar MRT in­ter­change sta­tion. The mall also high­lights Sing­post’s em­brace­ment of how tech­nol­ogy is chang­ing the re­tail land­scape.

We ex­pect an ad­di­tional rental in­come of S$22m, which trans­lates to c.s$13m earn­ings at steady state of 90% oc­cu­pancy. For FY18E, Sing­post Cen­tre should con­trib­ute S$3m of earn­ings

(3% of to­tal) and S$13m of earn­ings (10% of to­tal) for FY19E. This is en­abling the firm to move away from a highly cash-gen­er­a­tive, but de­clin­ing mail busi­ness into a high-vol­ume, high-growth e-com­merce lo­gis­tics one.

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