Frasers Property Limited (FPL): Privatization Proposal and Strategic Analysis
CGS International
May 14, 2025
Frasers Property Limited: Privatization Proposal, Strategic Benefits, and Future Outlook
Overview of the Privatization Proposal
Frasers Property Ltd (FPL) has announced a proposal to privatize Frasers Hospitality Trust (FHT) at S\$0.71 per stapled unit, through its subsidiary Frasers Property Hospitality Trust Holdings Pte Ltd (FPHT). This acquisition excludes the units already owned by FPL (25.59%) and TCC Group Investments Ltd (36.72%). The privatization will occur via a scheme of arrangement [[1]].
- The Scheme Consideration of S\$0.71 per stapled FHT security represents a 36.3% premium over FHT’s 12-month VWAP and 1.11x P/adjusted NAV as of April 2025 [[1]].
- The offer price will be adjusted to include any clean-up distributions to unitholders from the date following its latest financial period to the day immediately before the Scheme becomes effective [[1]].
- The Scheme is subject to shareholder approval at a Scheme meeting and other regulatory approvals. The effective date is projected around late-August 2025, with delisting by early-September 2025 [[1]].
Strategic Benefits for FHT and FPL
This privatization is expected to be a mutually beneficial transaction [[1]].
- For FHT Unitholders: The scheme provides an option to realize their investment at a premium to NAV amid geopolitical tensions, macro uncertainties, and forex headwinds impacting operational and share price performance [[1]]. The cash offer provides certainty in timing and execution [[2]].
- For FPL: The acquisition allows FPL to leverage its multi-asset class capabilities to create value and drive performance via active asset and portfolio management in the hospitality sector [[2]].
Financial Impact on FPL
The proforma financial impact for FPL, based on the reported aggregate Scheme Consideration of S\$515.4m (at S\$0.71/unit) and funded at a 4% interest cost, could result in [[2]]:
- A 1.2% dilution to FY24 NAV [[2]].
- An 8.8-9.5% dilution to FPL’s FY24 core and reported EPS, respectively [[2]].
FPL’s management believes that its multi-class capabilities and longer-term return horizon would enable it to unlock these asset values in the longer run [[2]].
Investment Rating and Recommendation
CGS International maintains an Add rating on FPL with an unchanged TP of S\$1.41, based on a 45% discount to RNAV of S\$2.56, pending completion of the transaction [[2]]. Active capital recycling and improvements in its free float and trading liquidity are potential re-rating catalysts [[2]].
Key Downside Risks
- Slower value unlocking activities due to a weaker macro outlook [[2]].
- High net debt to equity ratio that could drag on its pace of reinvestments [[3]].
Company Overview and Financial Performance
Frasers Property Limited (FPL SP) is currently trading at S\$0.815, with a target price of S\$1.41, offering an upside of 73.5% [[3]].
Key Statistics
- Market Cap: US\$2,453m or S\$3,200m [[3]].
- Average Daily Turnover: US\$0.10m or S\$0.13m [[3]].
- Current Shares O/S: 3,926m [[3]].
- Free Float: 13.1% [[3]].
Price Performance
- 1 Month: Absolute 10.9%, Relative -6.1% [[3]].
- 3 Months: Absolute -4.1%, Relative -6.1% [[3]].
- 12 Months: Absolute 1.9%, Relative -28.8% [[3]].
Major Shareholders
Financial Summary
| (S\$m) |
Sep-23A |
Sep-24A |
Sep-25F |
Sep-26F |
Sep-27F |
| Total Net Revenues |
3,977 |
4,234 |
3,959 |
3,291 |
3,438 |
| Operating EBITDA |
1,242 |
1,147 |
1,007 |
929 |
942 |
| Net Profit |
173.1 |
206.3 |
197.2 |
198.5 |
195.8 |
| Core EPS (S\$) |
0.13 |
0.09 |
0.05 |
0.05 |
0.05 |
Key Financial Ratios
| Key Ratios |
Sep-23A |
Sep-24A |
Sep-25F |
Sep-26F |
Sep-27F |
| Core EPS Growth |
-34.6% |
-43.0% |
0.6% |
(1.4%) |
– |
| FD Core P/E (x) |
6.05 |
9.25 |
16.22 |
16.12 |
16.34 |
| DPS (S\$) |
0.045 |
0.045 |
0.045 |
0.045 |
0.045 |
| Dividend Yield |
5.52% |
5.52% |
5.52% |
5.52% |
5.52% |
| EV/EBITDA (x) |
17.26 |
18.26 |
20.85 |
22.89 |
22.10 |
| Net Gearing |
75.8% |
83.4% |
80.8% |
79.6% |
73.4% |
| P/BV (x) |
0.30 |
0.32 |
0.31 |
0.31 |
0.29 |
| ROE |
5.22% |
3.54% |
2.02% |
1.99% |
1.89% |
Peer Comparison Table
A comparison of Singapore developers shows FPL’s relative positioning [[2]].
| Company |
Bloomberg Ticker |
Recom. |
Price (lc) |
Tgt Px (lc) |
Mkt Cap (US\$ m) |
Core P/E (x) FY24A |
Core P/E (x) FY25F |
RNAV |
Prem./(Disc.) FY25F to RNAV (%) |
P/BV (x) FY24A |
P/BV (x) FY25F |
Div. Yield (%) FY24A |
Div. Yield (%) FY25F |
| APAC Realty Ltd |
APAC SP |
Add |
0.43 |
0.45 |
117 |
15.9 |
12.9 |
n.a. |
n.a. |
0.94 |
0.90 |
4.8% |
5.9% |
| Capitaland Investment |
CLI SP |
Add |
2.53 |
4.30 |
9,718 |
26.6 |
15.4 |
4.78 |
-47% |
0.93 |
0.88 |
4.7% |
4.7% |
| City Developments |
CIT SP |
Add |
4.83 |
8.97 |
3,323 |
61.6 |
18.1 |
16.32 |
-70% |
0.48 |
0.45 |
2.1% |
2.5% |
| Frasers Property Limited |
FPL SP |
Add |
0.82 |
1.41 |
2,464 |
9.2 |
16.2 |
2.57 |
-68% |
0.32 |
0.31 |
5.5% |
5.5% |
| Hongkong Land Holdings Ltd |
HKL SP |
Hold |
5.06 |
4.91 |
11,140 |
27.3 |
16.6 |
na |
na |
0.37 |
0.36 |
4.5% |
4.7% |
| Propnex Ltd |
PROP SP |
Add |
1.04 |
1.25 |
593 |
18.8 |
12.3 |
n.a. |
n.a. |
6.24 |
5.97 |
7.5% |
7.7% |
| UOL Group |
UOL SP |
Add |
5.75 |
8.20 |
3,741 |
16.9 |
14.4 |
13.66 |
-58% |
0.42 |
0.41 |
3.1% |
3.1% |
| Singapore average |
|
|
|
|
|
23.0 |
15.9 |
|
-50% |
0.48 |
0.47 |
4.3% |
4.4% |
ESG Analysis
According to LSEG, FPL scored a B- for its overall ESG in 2023, with Environmental (B+), Social (B-) and Governance (C+) ratings [[2]]. Its ESG Controversies stood at A+ [[2]].
Key ESG Highlights
- Arranged S\$3.5bn in green and sustainability-linked loans in FY23, bringing the total to S\$11.4bn [[2]].
- 51% of owned or asset-managed operating properties and 90% of new development projects were green-certified/pursuing certification as of September 2023 [[2]].
- A 29% decrease in total Scope 1 and Scope 2 location-based carbon emissions vs. FY19 [[2]].
- Generated more than 18 GWh of renewable energy on-site, a 16% increase from FY22 [[2]].
- Almost all employees are trained on sustainability [[2]].
ESG Trends
FPL ranks well for resource use (A), emissions score (A+), workforce (A-) and CSR strategy (A+) [[2]].
Detailed Financial Analysis
Profit & Loss Statement
| (S\$m) |
Sep-23A |
Sep-24A |
Sep-25F |
Sep-26F |
Sep-27F |
| Total Net Revenues |
3,977 |
4,234 |
3,959 |
3,291 |
3,438 |
| Gross Profit |
1,574 |
1,513 |
1,342 |
1,192 |
1,220 |
| Operating EBITDA |
1,242 |
1,147 |
1,007 |
929 |
942 |
| Operating EBIT |
1,162 |
1,068 |
924 |
845 |
857 |
| Net Profit |
173 |
206 |
197 |
199 |
196 |
Cash Flow Statement
| (S\$m) |
Sep-23A |
Sep-24A |
Sep-25F |
Sep-26F |
Sep-27F |
| EBITDA |
1,242 |
1,147 |
1,007 |
929 |
942 |
| Cashflow From Operations |
369 |
78 |
(34) |
(291) |
424 |
| Capex |
(1,854) |
(1,384) |
(230) |
(230) |
(230) |
| Cash Flow From Investing |
(1,468) |
(339) |
(78) |
(19) |
(28) |
| Cash Flow From Financing |
(689) |
(847) |
(778) |
(743) |
(743) |
Balance Sheet
| (S\$m) |
Sep-23A |
Sep-24A |
Sep-25F |
Sep-26F |
Sep-27F |
| Total Cash And Equivalents |
2,658 |
2,717 |
2,837 |
2,743 |
3,354 |
| Total Current Assets |
7,672 |
7,215 |
7,227 |
6,942 |
7,526 |
| Total Non-current Assets |
32,110 |
32,422 |
32,652 |
32,882 |
33,112 |
| Total Current Liabilities |
6,635 |
6,117 |
5,936 |
5,494 |
5,594 |
| Total Non-current Liabilities |
14,946 |
16,051 |
16,051 |
16,051 |
16,051 |
| Total Liabilities |
21,581 |
22,167 |
21,987 |
21,545 |
21,645 |
| Total Equity |
18,200 |
17,470 |
17,892 |
18,279 |
18,993 |
Key Ratios and Drivers
| Key Ratios |
Sep-23A |
Sep-24A |
Sep-25F |
Sep-26F |
Sep-27F |
| Revenue Growth |
1.8% |
6.8% |
(6.1%) |
(16.9%) |
4.5% |
| Operating EBITDA Growth |
1.0% |
(7.6%) |
(12.2%) |
(7.8%) |
1.4% |
| Net Cash Per Share (S\$) |
(3.52) |
(3.71) |
(3.68) |
(3.70) |
(3.55) |
| BVPS (S\$) |
2.75 |
2.53 |
2.59 |
2.65 |
2.79 |
| ROIC (%) |
16.3% |
16.9% |
16.4% |
14.7% |
14.2% |
| ROCE (%) |
3.60% |
3.37% |
2.92% |
2.63% |
2.63% |
