Report Summary

• Frasers Centrepoint Trust (FCT) reported higher shopper traffic and tenant sales in 1QFY9/26, with occupancy rising to 99.9% after backfilling cinema spaces.
• FCT is undertaking asset enhancement initiatives (AEIs) at Hougang Mall, NEX Mall, and planning a major revamp at Causeway Point, targeting 7% ROI for these projects.
• Aggregate leverage increased to 40.3%, with an interest coverage ratio of 3.54x and average debt cost expected at 3.4%-3.5% for FY26.
• The REIT maintains its exposure to resilient suburban retail in Singapore and is rated “Add” with a target price of S\$2.86, representing a 26.5% upside from current levels.
• ESG efforts include all properties being green-certified, significant solar installations, and increased green loans, positioning FCT well for long-term sustainability.
• Potential upside catalysts include stronger rental reversions and accretive acquisitions, while downside risks include weaker consumer spending and tenant sentiment.
• Financial forecasts show steady growth in revenues, distributable profit, and dividend yield over FY26-28.
• Peer comparison highlights FCT’s competitive dividend yield and asset leverage among Singapore REITs.