Frasers Centrepoint Trust - RHB Invest 2024-10-28: Strengthening Its Suburban Mall Positioning

• Frasers Centrepoint Trust’s 2HFY24 financials were broadly in line. Operational performance across assets remains largely healthy with high occupancy expected to be maintained and rent reversions to be in the mid-single digits.
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Portfolio occupancy was flat q-o-q at 99.7%

• Portfolio occupancy was flat q-o-q at 99.7%, with improvement seen at Causeway Point (99.8%) and Central Plaza (office) (95%), but offset by a slight decline at Tiong Bahru Plaza, Waterway Point and White Sands.
• Average portfolio rent reversion strengthened to 7.7% for FY24 (FY23: 4.7%, 1HFY24:7.5%), with overall occupancy cost of 16% (FY23: 15%). However, there has been a noticeable lull in retail sales growth across Singapore in the last two quarters. Some of the factors driving this include the normalisation of retail spend post COVID-19, higher outbound travel spending, and more value conscious purchases.

Hougang Mall to undergo S$51m AEI

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• AEI is expected to commence in 2QCY25 and complete in 3QCY26 with the mall continuing operations. Targeted ROI for the AEI is ~7%.
• The move follows the completion of Tampines 1’s AEI in Aug 2024. Post AEI, the mall has achieved full occupancy with a freshly curated mix of tenants and final ROI of >8%.

Remains optimistic on Causeway Point

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Vijay Natarajan RHB Securities Research | https://www.rhbgroup.com/ 2024-10-28 SGinvestors.io

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