Excerpt from OCBC Group Research report.

Report Summary
• Frasers Centrepoint Trust (FCT) has successfully backfilled vacant cinema spaces at Causeway Point and Century Square, increasing portfolio committed occupancy to 99.9%.
• Shopper traffic and tenants’ sales saw year-on-year growth of 1.3% and 2.7% respectively, with steady operational performance and ongoing asset enhancement initiatives.
• Aggregate leverage ratio rose slightly to 40.3%, with 81.2% of debt hedged and average cost of debt stable at 3.5%.
• FCT’s share price has underperformed year-to-date due to concerns over potential retail sales leakage from the upcoming Johor Bahru-Singapore RTS Link, but the broker believes these concerns are overdone given new housing developments in key regions.
• Fair value estimate lowered to SGD2.49 (from SGD2.59) due to a higher cost of equity assumption, but BUY rating is maintained with expected total returns of 16%.
• Potential catalysts include asset divestments above valuation, accretive acquisitions, and stronger-than-expected footfall and sales; risks include economic slowdown, higher interest rates, and weaker rental reversions.
• FCT is one of the largest suburban retail mall owners in Singapore, focusing on necessity spending, food & beverage, and essential services, with a resilient portfolio supported by stable shopper footfall.

Above is an excerpt from a report by OCBC Group Research. Clients of OCBC Group Research can be the first to access the full report from the OCBC Group Research website: https://www.ocbc.com