BHG Retail REIT - A Year Of Recovery
- BHG Retail REIT (SGX:BMGU)'s FY21 net property income grows 14.9% y-o-y to S$41.8m, Total DPU for FY21 stands at S$0.0217. DPU miss hints at possible protracted recovery.
- While FY20 was undoubtedly the bottom of BHG Retail REIT’s three-year declining DPU trend, its recovery is expected to be slower, as FY21 DPU numbers did not bounce back as quickly as anticipated.
- Still, we maintain our FY22F estimates, as Hefei Mengchenglu is set to make a bigger contribution this year following disruptions from its AEI in FY21.
- BHG Retail REIT offers investors a good mix of growth and stability. We note that the REIT has exposure to three properties located in Hefei and Chengdu, where urban disposable income grew at 5-year CAGRs of 8.5% and 7.9%, respectively, outpacing Beijing’s 7.2%.
- BHG Retail REIT has a right-of-first-refusal (ROFR) over ~10 assets. The pipeline of assets may expand beyond the ROFR, with previously proposed acquisitions that are outside the ROFR. We understand that the manager remains keen to tap into the sponsor’s pipeline to accelerate its growth.
- With yields of ~5.0% and limited upside to our target price, we maintain HOLD rating for BHG Retail REIT.
Above is the excerpt from report by DBS Group Research.
Clients of DBS may access the full report in PDF @ https://www.dbs.com/insightsdirect/.
Woon Bing Yong DBS Group Research | Derek TAN DBS Research | https://www.dbs.com/insightsdirect/ 2022-03-07 2022-03-07
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