CGS International April 29, 2025
Frasers Centrepoint Trust Delivers Healthy Operating Metrics in 1HFY25, Maintains Add Rating
FCT’s Strong Start to FY25: DPU In Line, Operational Strength Shines
Frasers Centrepoint Trust (FCT) reported a solid performance for the first half of its fiscal year ending September 2025 (1HFY9/25). The Distribution Per Unit (DPU) came in at 6.054 Singapore cents, representing a 0.5% year-on-year (yoy) increase and aligning with forecasts, reaching 50.1% of the full-year FY9/25 forecast. This performance underscores the resilience of FCT’s portfolio.
Key financial highlights for 1HFY9/25 include:
- Gross Revenue: Increased by 7.1% yoy.
- Net Property Income (NPI): Improved by 7.3% yoy to S\$133.7 million. This growth was driven by higher portfolio occupancy, positive rental uplift, and contributions from the completed asset enhancement initiative (AEI) at Tampines 1.
- Like-for-Like Growth: Excluding the impact of the Changi City Point divestment (Nov 2023), gross revenue and NPI grew by 2.4% yoy and 1.6% yoy, respectively.
- Distribution Income: Expanded by 4.9% yoy to S\$110.1 million, bolstered by the full six-month contribution from the increased 24.5% stake in Waterway Point and improved performance from both Waterway Point and NEX.
Robust Operational Performance: High Occupancy and Strong Rental Reversions
FCT demonstrated strong operational health during the period.
- Portfolio Occupancy: Committed occupancy remained exceptionally high at 99.5% as of the end of 1HFY25.
- Rental Reversion: FCT achieved a significant +9% rental reversion in 1HFY25. This positive trend was supported by a 1% yoy increase in shopper traffic and a 3.3% yoy rise in tenant sales.
- Mall-Specific Reversions: Rent reversions varied across the portfolio, ranging from +5.3% at Tiong Bahru Plaza to a strong +13.3% at Tampines 1.
- Lease Expiry Profile: FCT has 9.6% of gross rental income due for renewal in the second half of FY25 (2HFY25F) and 29% in FY26F.
- Occupancy Cost: With occupancy costs remaining below 16% at the end of 1HFY25, FCT appears well-positioned to continue securing positive rental uplifts during lease re-contracting.
Asset Enhancement Initiatives (AEI) Update
The AEI works at Hougang Mall commenced in April 2025, with completion scheduled for the third quarter of the calendar year 2026 (3QCY26F). Encouragingly, approximately 64% of the AEI spaces at Hougang Mall have already been pre-committed. Management confirmed they are on track to achieve the targeted 7% Return on Investment (ROI) for this initiative. The completion of the AEI at Tampines 1 also contributed positively to 1HFY25 results.
Healthy Balance Sheet and Debt Management
FCT maintained a healthy financial position.
- Gearing Ratio: Declined quarter-on-quarter (qoq) to a comfortable 38.6% as at end-1HFY25.
- Cost of Debt: Decreased qoq to 3.8% at the end of 2QFY25. Management anticipates the cost of debt could trend slightly lower in 2HFY25F, aided by the recent dip in Singapore interest rates and the fact that 24.2% of its debt is on floating rates.
Strategic Acquisition: Northpoint City South Wing (NCSW)
In March 2025, FCT announced the proposed acquisition of Northpoint City South Wing (NCSW) for S$1.13 billion. This acquisition will be funded through a combination of debt and an equity fund-raising exercise. Management indicated that the transaction is expected to be completed by the end of May 2025. This strategic move is anticipated to significantly bolster FCT’s income stream in the second half of FY25 (2HFY25F). Post-acquisition, FCT’s market share of suburban private shopping centres by lettable area will increase to 10.3%, solidifying its position as the largest suburban retail landlord.
Analyst Outlook: Maintained ‘Add’ Rating and Revised Target Price
The ‘Add’ rating for FCT is maintained, with the Dividend Discount Model (DDM)-based Target Price (TP) slightly increased to S$2.70, based on a Cost of Equity (COE) of 6.8%. FY25-26F DPU estimates have been lifted by approximately 0.6% to incorporate contributions from the NCSW acquisition.
The positive outlook is based on:
- Suburban Retail Resilience: Exposure to the more defensive suburban retail segment.
- Market Leadership: Strong positioning as the largest suburban retail landlord post-NCSW purchase.
Key Changes in Estimates:
- FY25F DPU increased by 0.58%.
- FY26F DPU increased by 0.6%.
Potential Re-rating Catalysts:
- Stronger-than-forecasted operational performance from NCSW.
Downside Risks:
- A slowdown in consumer spending, potentially weakening tenant sentiment and leasing activities, impacting FCT’s ability to command positive rental reversions.
Financial Summary
| Financial Summary (S\$m) |
Sep-23A |
Sep-24A |
Sep-25F |
Sep-26F |
Sep-27F |
| Gross Property Revenue |
369.7 |
351.7 |
387.5 |
426.6 |
440.9 |
| Net Property Income |
265.6 |
253.4 |
279.9 |
307.8 |
319.6 |
| Net Profit |
215.2 |
213.7 |
220.1 |
232.6 |
245.5 |
| Distributable Profit |
207.7 |
215.0 |
246.4 |
253.5 |
262.4 |
| Core EPS (S\$) |
0.12 |
0.11 |
0.11 |
0.11 |
0.12 |
| Core EPS Growth |
(1.57%) |
(6.83%) |
2.32% |
(0.16%) |
4.99% |
| FD Core P/E (x) |
18.70 |
20.08 |
19.62 |
19.65 |
18.72 |
| DPS (S\$) |
0.12 |
0.12 |
0.12 |
0.12 |
0.13 |
| Dividend Yield |
5.40% |
5.33% |
5.40% |
5.53% |
5.70% |
| Asset Leverage |
34.4% |
31.8% |
34.5% |
35.0% |
35.0% |
| BVPS (S\$) |
2.33 |
2.30 |
2.35 |
2.34 |
2.33 |
| P/BV (x) |
0.97 |
0.98 |
0.96 |
0.96 |
0.97 |
| Recurring ROE |
5.17% |
4.89% |
4.93% |
4.88% |
5.15% |
| % Change In DPS Estimates |
|
|
0.58% |
0.60% |
|
| DPS/Consensus DPS (x) |
|
|
1.01 |
1.00 |
0.99 |
1HFY25 Results Comparison
| FYE Sep (S\$ m) |
1HFY25 |
1HFY24 |
yoy chg |
2HFY24 |
hoh chg |
Prev. FY25F |
Comments |
| Total Revenue |
184.4 |
172.2 |
7.1% |
179.5 |
2.7% |
391.8 |
In line. 1HFY25 at 47.1% of our FY25F forecast. |
| Operating costs |
(50.7) |
(47.6) |
6.5% |
(50.7) |
-0.1% |
(108.7) |
|
| Net property income |
133.7 |
124.6 |
7.3% |
128.8 |
3.8% |
283.1 |
In line. 1HFY25 at 47.2% of our FY25F forecast. |
| NPI margin |
72.5% |
72.4% |
|
71.7% |
|
72.3% |
|
| Interest and other income |
0.1 |
0.4 |
nm |
0.1 |
nm |
0.1 |
|
| Borrowing costs |
(41.0) |
(41.6) |
-1.6% |
(42.5) |
-3.7% |
(89.4) |
|
| Trust expenses |
(1.3) |
(1.5) |
-13.1% |
(1.5) |
-9.2% |
(3.1) |
|
| Manager’s management fees |
(19.4) |
(17.8) |
8.9% |
(19.1) |
1.4% |
(38.1) |
|
| Other expenses |
(0.4) |
(0.4) |
nm |
(0.3) |
nm |
(0.7) |
|
| Net income |
71.7 |
63.6 |
12.7% |
65.5 |
9.5% |
152.7 |
|
| Share of JV profit |
25.3 |
35.0 |
-27.7% |
31.2 |
-18.8% |
62.4 |
|
| Revaluation of investment properties |
– |
– |
nm |
14.7 |
nm |
– |
|
| Others |
(0.0) |
11.2 |
nm |
(0.1) |
-98.1% |
– |
|
| Total return before tax |
97.0 |
85.2 |
13.8% |
111.3 |
-12.8% |
215.1 |
|
| Tax |
0.0 |
1.1 |
nm |
– |
nm |
– |
|
| Total return after tax |
97.0 |
86.3 |
12.4% |
111.3 |
-12.8% |
215.1 |
|
| Distributable income |
110.1 |
103.8 |
6.0% |
109.4 |
0.6% |
245.2 |
|
| Core net profit |
97.0 |
75.1 |
29.2% |
96.6 |
0.4% |
215.1 |
|
| DPU (Scts) |
6.054 |
6.022 |
0.5% |
6.020 |
0.6% |
12.10 |
In line. 1HFY25 at 50.1% of our FY25F forecast. |
Key Earnings Revisions
| FYE Sep (S\$m) |
Previous |
New |
% chg |
|
FY25F |
FY26F |
FY25F |
FY26F |
FY25F |
FY26F |
| Gross revenue |
365.1 |
368.4 |
387.5 |
426.6 |
6.12% |
15.80% |
| Distribution income |
219.3 |
225.1 |
246.4 |
253.5 |
12.33% |
12.62% |
| DPU (Scts) |
12.09 |
12.37 |
12.16 |
12.44 |
0.58% |
0.60% |
ESG Profile and Commitment
Frasers Centrepoint Trust achieved a combined ESG score of ‘B’ in FY24, according to LSEG. Its pillar scores were ‘B’ for Environmental, ‘C+’ for Social, and ‘B+’ for Governance, while maintaining an ‘A+’ for ESG Controversies.
Key ESG Highlights & Implications:
- Rankings & Ratings: FCT ranked 30th out of 99 Singapore companies and 9th out of 26 Residential & Commercial REITs in Singapore based on LSEG scores. It maintained a 5-star GRESB Real Estate Assessment rating for the third consecutive year in 2024 and achieved an ‘AA’ rating from MSCI ESG Ratings in 2024.
- Green Portfolio: All 9 properties in FCT’s portfolio are Green Mark certified (4 Platinum, 5 Gold), following Hougang Mall’s Platinum certification in November 2022.
- Net-Zero Commitment: FCT is committed to achieving net-zero carbon emissions by 2050.
- FY24 Progress: Reduced water intensity by 2.9% yoy, lowered Scope 3 emissions by 6% yoy, and generated 308 MWh of renewable energy on-site (a 109.5% increase over FY23).
- Green Financing: Increased the proportion of green loans in its borrowings significantly to 82.8% as at end-FY24, up from 55.6% in FY23 and 31.9% in FY22.
- Social Pillar Focus: The combined ESG score was primarily impacted by the Social pillar (‘C+’). Addressing this area could improve overall scores.
- Valuation Impact: Currently, no premium or discount for ESG factors is ascribed in the valuation. However, continued ESG efforts are viewed positively for long-term operations and financials. Faster implementation and better disclosures could attract more investor attention.
Singapore REIT Peer Comparison (as at 28 Apr 2025)
Below is a comparison across various SREIT sectors:
Hospitality
| Ticker |
Rec. |
Price (LC) |
Target Price (LC) |
Mkt Cap (US\$m) |
Asset Leverage |
Last NAV |
P/NAV |
FY25F Yield |
FY26F Yield |
FY27F Yield |
| CLAS SP |
Add |
0.85 |
1.13 |
\$2,464 |
39.9% |
1.15 |
0.74 |
7.2% |
7.4% |
7.5% |
| CDREIT SP |
Add |
0.79 |
1.07 |
\$755 |
38.8% |
1.48 |
0.53 |
7.5% |
8.1% |
8.3% |
| FEHT SP |
Add |
0.55 |
0.75 |
\$844 |
30.8% |
0.92 |
0.60 |
7.3% |
7.2% |
7.2% |
| FHT SP |
NR |
0.63 |
NA |
\$773 |
35.0% |
0.64 |
0.98 |
4.1% |
4.4% |
4.8% |
| Simple Average |
|
|
|
|
36.1% |
|
0.71 |
6.5% |
6.8% |
6.9% |
Industrial
| Ticker |
Rec. |
Price (LC) |
Target Price (LC) |
Mkt Cap (US\$m) |
Asset Leverage |
Last NAV |
P/NAV |
FY25F Yield |
FY26F Yield |
FY27F Yield |
| AAREIT SP |
NR |
1.24 |
NA |
\$754 |
33.7% |
1.26 |
0.98 |
7.4% |
7.3% |
7.5% |
| CLAR SP |
Add |
2.68 |
3.10 |
\$8,970 |
38.9% |
2.20 |
1.22 |
5.7% |
5.9% |
6.1% |
| EREIT SP |
Add |
0.20 |
0.36 |
\$1,221 |
42.8% |
0.28 |
0.73 |
10.9% |
11.3% |
11.5% |
| FLT SP |
Add |
0.89 |
1.35 |
\$2,533 |
36.2% |
1.13 |
0.78 |
7.6% |
7.8% |
7.6% |
| KDCREIT SP |
Add |
2.09 |
2.48 |
\$3,586 |
30.2% |
1.53 |
1.37 |
4.8% |
4.9% |
5.1% |
| MINT SP |
Add |
2.03 |
2.82 |
\$4,402 |
39.8% |
1.74 |
1.17 |
6.9% |
7.0% |
7.1% |
| MLT SP |
Add |
1.13 |
1.63 |
\$4,355 |
40.7% |
1.31 |
0.86 |
7.1% |
6.6% |
6.6% |
| SERT SP |
Add |
1.50 |
1.92 |
\$955 |
40.2% |
1.33 |
1.13 |
8.5% |
8.7% |
8.5% |
| SSREIT SP |
NR |
0.36 |
NA |
\$291 |
37.4% |
0.50 |
0.72 |
0.0% |
0.0% |
0.0% |
| Simple Average |
|
|
|
|
37.8% |
|
1.00 |
6.5% |
6.6% |
6.7% |
Office
| Ticker |
Rec. |
Price (LC) |
Target Price (LC) |
Mkt Cap (US\$m) |
Asset Leverage |
Last NAV |
P/NAV |
FY25F Yield |
FY26F Yield |
FY27F Yield |
| KREIT SP |
Add |
0.85 |
1.08 |
\$2,502 |
42.1% |
1.24 |
0.69 |
6.4% |
6.7% |
6.9% |
| OUEREIT SP |
Add |
0.28 |
0.33 |
\$1,171 |
40.6% |
0.59 |
0.47 |
7.2% |
7.6% |
7.9% |
| SUN SP |
Hold |
1.14 |
1.26 |
\$2,544 |
43.4% |
2.01 |
0.57 |
5.5% |
5.8% |
6.1% |
| Simple Average |
|
|
|
|
42.0% |
|
0.58 |
6.4% |
6.7% |
7.0% |
Retail
| Ticker |
Rec. |
Price (LC) |
Target Price (LC) |
Mkt Cap (US\$m) |
Asset Leverage |
Last NAV |
P/NAV |
FY25F Yield |
FY26F Yield |
FY27F Yield |
| CICT SP |
Add |
2.17 |
2.45 |
\$12,072 |
38.7% |
2.09 |
1.04 |
5.1% |
5.4% |
5.7% |
| FCT SP |
Add |
2.25 |
2.70 |
\$3,460 |
38.6% |
2.22 |
1.01 |
5.4% |
5.5% |
5.7% |
| LREIT SP |
Add |
0.51 |
0.69 |
\$949 |
40.8% |
0.74 |
0.69 |
7.7% |
7.8% |
7.9% |
| MPACT SP |
Add |
1.21 |
1.48 |
\$4,848 |
37.7% |
1.78 |
0.68 |
6.6% |
6.9% |
7.0% |
| PGNREIT SP |
Hold |
0.98 |
0.98 |
\$2,105 |
35.3% |
0.92 |
1.07 |
5.2% |
5.4% |
5.6% |
| SGREIT SP |
Add |
0.50 |
0.60 |
\$864 |
36.2% |
0.69 |
0.72 |
7.3% |
7.4% |
7.5% |
| Simple Average |
|
|
|
|
37.9% |
|
0.87 |
6.2% |
6.4% |
6.6% |
Overseas-centric
| Ticker |
Rec. |
Price (LC) |
Target Price (LC) |
Mkt Cap (US\$m) |
Asset Leverage |
Last NAV |
P/NAV |
FY25F Yield |
FY26F Yield |
FY27F Yield |
| CLCT SP |
NR |
0.68 |
NA |
\$916 |
42.6% |
1.09 |
0.62 |
8.4% |
8.5% |
8.6% |
| ELITE SP |
Add |
0.29 |
0.35 |
\$224 |
45.5% |
0.39 |
0.73 |
10.3% |
10.3% |
10.4% |
| MUST SP |
Add |
0.07 |
0.13 |
\$117 |
60.8% |
0.23 |
0.29 |
0.0% |
41.8% |
48.5% |
| SASSR SP |
Add |
0.63 |
0.85 |
\$602 |
24.8% |
0.83 |
0.76 |
9.8% |
10.1% |
10.4% |
| Simple Average |
|
|
|
|
43.4% |
|
0.60 |
7.1% |
17.7% |
19.5% |
Healthcare
| Ticker |
Rec. |
Price (LC) |
Target Price (LC) |
Mkt Cap (US\$m) |
Asset Leverage |
Last NAV |
P/NAV |
FY25F Yield |
FY26F Yield |
FY27F Yield |
| PREIT SP |
Add |
4.14 |
4.91 |
\$2,054 |
36.1% |
2.42 |
1.71 |
3.7% |
4.1% |
4.2% |
Note: Forecasts for Not Rated (NR) companies are based on Bloomberg consensus estimates.
Detailed Financials and Key Ratios
Profit & Loss (S\$m)
| (S\$m) |
Sep-23A |
Sep-24A |
Sep-25F |
Sep-26F |
Sep-27F |
| Rental Revenues |
369.7 |
351.7 |
387.5 |
426.6 |
440.9 |
| Gross Property Revenue |
369.7 |
351.7 |
387.5 |
426.6 |
440.9 |
| Total Property Expenses |
(104.1) |
(98.3) |
(107.5) |
(118.9) |
(121.3) |
| Net Property Income |
265.6 |
253.4 |
279.9 |
307.8 |
319.6 |
| Management Fees |
(35.5) |
(36.9) |
(38.1) |
(38.5) |
(38.5) |
| Trustee’s Fees |
(1.0) |
(1.0) |
(1.1) |
(1.1) |
(1.1) |
| EBITDA |
232.9 |
215.4 |
240.7 |
268.2 |
280.0 |
| EBIT |
232.9 |
215.4 |
240.7 |
268.2 |
280.0 |
| Net Interest Income |
(80.6) |
(83.7) |
(83.0) |
(99.2) |
(99.6) |
| Associates’ Profit |
53.1 |
66.2 |
62.4 |
63.7 |
65.0 |
| Exceptional Items |
10.1 |
14.7 |
0.0 |
0.0 |
0.0 |
| Pre-tax Profit |
215.4 |
212.6 |
220.1 |
232.6 |
245.5 |
| Taxation |
(0.3) |
1.1 |
0.0 |
0.0 |
0.0 |
| Net Profit |
215.2 |
213.7 |
220.1 |
232.6 |
245.5 |
| Distributable Profit |
207.7 |
215.0 |
246.4 |
253.5 |
262.4 |
Cash Flow (S\$m)
| (S\$m) |
Sep-23A |
Sep-24A |
Sep-25F |
Sep-26F |
Sep-27F |
| Pre-tax Profit |
215 |
213 |
220 |
233 |
245 |
| Depreciation And Non-cash Adj. |
28 |
17 |
21 |
36 |
35 |
| Change In Working Capital |
3 |
(22) |
19 |
8 |
3 |
| Others |
(3) |
8 |
27 |
25 |
21 |
| Cashflow From Operations |
243 |
216 |
287 |
301 |
304 |
| Capex |
(8) |
(42) |
(9) |
(54) |
(6) |
| Other Investing Cashflow |
(349) |
87 |
(1,101) |
61 |
62 |
| Cash Flow From Investing |
(357) |
45 |
(1,110) |
7 |
56 |
| Debt Raised/(repaid) |
1,147 |
875 |
913 |
506 |
302 |
| Equity Raised/(Repaid) |
0 |
200 |
421 |
0 |
0 |
| Dividends Paid |
(208) |
(208) |
(246) |
(253) |
(262) |
| Cash Interest And Others |
(831) |
(1,133) |
(219) |
(546) |
(392) |
| Cash Flow From Financing |
108 |
(266) |
868 |
(293) |
(352) |
| Total Cash Generated |
(6) |
(5) |
45 |
15 |
7 |
Balance Sheet (S\$m)
| (S\$m) |
Sep-23A |
Sep-24A |
Sep-25F |
Sep-26F |
Sep-27F |
| Total Investments |
5,966 |
6,342 |
7,515 |
7,572 |
7,581 |
| Total Non-current Assets |
5,966 |
6,342 |
7,515 |
7,572 |
7,581 |
| Total Cash And Equivalents |
32 |
27 |
72 |
87 |
94 |
| Other Current Assets |
377 |
10 |
12 |
13 |
13 |
| Total Current Assets |
409 |
36 |
84 |
99 |
107 |
| Trade Creditors |
95 |
69 |
91 |
100 |
103 |
| Short-term Debt |
353 |
320 |
450 |
296 |
415 |
| Other Current Liabilities |
55 |
40 |
40 |
40 |
40 |
| Total Current Liabilities |
504 |
429 |
581 |
435 |
558 |
| Long-term Borrowings |
1,842 |
1,708 |
2,174 |
2,389 |
2,279 |
| Other Long-term Liabilities |
56 |
81 |
81 |
81 |
81 |
| Total Non-current Liabilities |
1,898 |
1,789 |
2,255 |
2,470 |
2,360 |
| Shareholders’ Equity |
3,973 |
4,161 |
4,762 |
4,766 |
4,771 |
| Total Equity |
3,973 |
4,161 |
4,762 |
4,766 |
4,771 |
Key Ratios
|
Sep-23A |
Sep-24A |
Sep-25F |
Sep-26F |
Sep-27F |
| Gross Property Revenue Growth |
3.6% |
(4.9%) |
10.2% |
10.1% |
3.3% |
| NPI Growth |
2.7% |
(4.6%) |
10.5% |
9.9% |
3.9% |
| Net Property Income Margin |
71.8% |
72.0% |
72.2% |
72.1% |
72.5% |
| DPS Growth |
(0.63%) |
(1.23%) |
1.31% |
2.35% |
3.05% |
| Gross Interest Cover |
2.83 |
2.56 |
2.90 |
2.70 |
2.81 |
| Net Dividend Payout Ratio |
97% |
101% |
112% |
109% |
107% |
| Current Ratio |
0.81 |
0.09 |
0.14 |
0.23 |
0.19 |
| Return On Average Assets |
3.49% |
3.35% |
3.15% |
3.05% |
3.20% |
Key Drivers
|
Sep-23A |
Sep-24A |
Sep-25F |
Sep-26F |
Sep-27F |
| Occupancy Rate (%) |
97.7% |
111.0% |
96.5% |
95.3% |
96.9% |
| Average rent (S\$ psf per month) |
7.4 |
7.3 |
6.2 |
6.3 |
6.4 |
