In addition, internalisation of the Trustee-Manager was completed in August 2016. CRT achieved a one-month cost savings of JPY29.9mn from the internalisation. Full savings of c.JPY90mn per quarter should start to kick in from 2Q17 onwards.
Maintain ACCUMULATE with an unchanged DDM-derived target price of S$0.93. We continue to like CRT for its long WALE and visible strong growth drivers over the next two FYs. Full cost savings from reduced financing costs, and internalisation of Trustee-Manager would gradually kick in over the next few quarters, which would improve distributions. SGD/JPY hedge rate of 83.57 for FY17 represents a c.1.7% improvement from FY16.
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