SINGAPORE (Nov 15): DBS Group Research is keeping Croesus Retail Trust at “buy” with an unchanged target price of 99 cents following 1Q17 results that were “in line with expectations”.

CRT announced a DPU of 1.79 cents for 1Q17 ended Sept, a 9.8% increase from the restated DPU of 1.63 cents in the same quarter last year.

Gross revenue of JPY 3,126 million ($41.4 million) for 1Q17 was 55.8% higher than the JPY2,007 million recorded in 1Q16.

(See <a href="http://www.theedgemarkets.com.sg/sg/article/croesus-retail-trust-announces-dpu-179-cents-1q-98-higher-restated-dpu-163-cents-year-ago">Croesus Retail Trust announces DPU of 1.79 cents for 1Q</a>)

In a report on Friday, DBS lead analyst Mervin Song described it as a “solid start to FY17”.

For the rest of the year, Song believes CRT should continue to benefit from the full-year contribution from four recent acquisitions over the past year: Torius property in Fukuoka, Fuji Grand Natalie, Mallage Saga, and Feeeal Asahikawa.

“CRT has one of the highest growth rates among our SREIT universe with a two-year DPU CAGR of 8% in SGD terms,” says Song. “This is before any interest savings on the back of lower Japanese interest rates which we have yet to fully price in.”

Song adds that CRT could also see upside potential in the medium term from asset enhancement initiatives and tenant remixing, as well as further acquisitions.

In addition, Song says the “perception of a greater alignment” between the interests of CRT’s unitholders and its management will help close the discount to its target price.

As at 12.58pm, units of Croesus Retail Trust are trading 0.6% higher at 84 cents.

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Croesus Retail Trust off to a ‘solid start’ in FY17

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