Date of Report: October 28, 2024
Broker: CGS International Securities

Overview of Frasers Centrepoint Trust

Frasers Centrepoint Trust (FCT) focuses on investments in retail properties, specifically suburban malls in Singapore. The trust is recognized for its stable performance and strategic asset management, which positions it as a resilient player in the retail real estate sector.

Financial Performance

FY9/24 Distribution Per Unit (DPU)

For the fiscal year ending in September 2024 (FY9/24), FCT reported a Distribution Per Unit (DPU) of 12.0 Singapore cents, a slight decline of 0.9% year-on-year. This DPU was in line with expectations, meeting 100.4% of the forecast for FY24.

Portfolio Strength and Positive Reversions

FCT’s portfolio has shown strength through:

• Stable Asset Performance: The properties under FCT’s portfolio maintain healthy occupancy rates, driven by strong demand for suburban retail spaces in Singapore.
• Positive Rental Reversions: The trust has reported healthy positive reversions, indicating that rental agreements are being renewed or renegotiated at favorable terms, reflecting strong tenant demand.

Active Asset Management and New Asset Enhancement Initiatives (AEI)

FCT has announced new Asset Enhancement Initiatives (AEI) to enhance the value of its assets further. These initiatives aim to maximize the potential of its prime suburban malls, aligning with FCT’s long-term strategy to drive organic growth.

Investment Outlook

Reiterate Add Recommendation

CGS International Securities maintains an Add rating on FCT, given its solid portfolio performance and growth potential through active asset management. The broker notes the trust’s resilience and the steady demand for well-located suburban retail spaces as key factors supporting this recommendation.

Conclusion

Frasers Centrepoint Trust stands out for its stable DPU, healthy portfolio performance, and proactive asset management. The trust’s focus on suburban malls, combined with its growth strategies, makes it a compelling investment for those interested in Singapore’s retail real estate sector.