What’s the new SPC mall’s impact?
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.