According to the Department of Statistics of Singapore, retail sales jumped by a robust 5.3% YoY and 5.1% MoM for the month of Nov. Excluding motor vehicles, retail sales improved 4.7% YoY.

Growth was largely driven by Computer & Telecommunication Equipment (+16.6% YoY) and Supermarkets (+9.7% YoY). This was also the second strongest YoY growth (excluding motor vehicles) in a month for 11M17 (Apr: +4.8% YoY), which we believe is a reflection of the more positive consumer sentiment on the ground.

The share prices of retail REITs have been laggards within the REITs sector due to concerns over the e-commerce threat and softer rental reversion figures. We still see value in selective names, and highlight our preference for Frasers Centrepoint Trust [BUY; FV: S$2.40] and CapitaLand Mall Trust [BUY; FV: S$2.20].

Maintain NEUTRAL on the broader S-REITs sector.

Source: OCBC Research - 15 Jan 2018