Frasers Centrepoint Trust - OCBC Investment 2024-07-25: Resilient Occupancy But Growth In Tenants’ Sales Softened

• Frasers Centrepoint Trust (SGX:J69U) provided a business update for 3QFY24, with no profit and loss statement items disclosed as per its usual practice.

Retail portfolio committed occupancy down sequentially but remained at a very healthy level

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• Frasers Centrepoint Trust highlighted that the AEI at Tampines 1 is on track to be completed in Sep 2024 with 100% committed occupancy. There will be 68 new-to-mall concepts (of which 46 are new to Frasers Centrepoint Trust’s portfolio) accounting for 28% of the mall’s net lettable area (NLA). The return on investment (ROI) is expected to exceed management’s initial guidance of 8%, partly due to higher-than-expected signing rents.

Tenants’ sales and shopper traffic grew 0.7% and 4.1% y-o-y in 3QFY24, respectively

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• No rental reversion figures were provided during the quarter, but management hinted that the run-rate was comparable to the rental reversions clocked in 1HFY24 (+7.5%).
• We also note that suburban retail market rents increased 2.6% y-o-y and 0.3% q-o-q to S$31.95 per square foot per month in 2Q24, according to data from CBRE Research, and this was the twelfth consecutive quarter of sequential rental increase.

Aggregate leverage ratio increased to 39.1%, while proportion of debt hedged declined slightly to 67.2%

• Read more at SGinvestors.io.

OCBC Research Team OCBC Investment Research | https://www.iocbc.com/ 2024-07-25 SGinvestors.io

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