Fully let mall, growing tenant sales and lower cost of debt were the key highlights of the preceding quarter. Hougang Mall AEI has received three quarters leasing pre-commitment and is on track for mid-to-high single digit return on capex. Commentary suggests 2H reversion is trending up.
- Read this at SGinvestors.io -
Business as usual.
Frasers Centrepoint Trust's occupancy inched up to 99.9% (2Q 99.5%). Barring slight dip in NEX, all other malls saw occupancy flat-to-up. Tenant sales grew 4.4% (2Q +3.3%, 1Q +2.5%).
Hougang Mall AEI commenced in April and is targeting completion by Sep next year. It has received 74% leasing pre-commitment with new-to-mall concepts onboard.
- Read this at SGinvestors.io -
Takeaways from post-result investor lunch.
Management of Frasers Centrepoint Trust indicated 2H reversion is trending up (1H +9%). Debt cost guide is expected to trend down to mid 3% for next fiscal year. The group is looking at longer tenure (~5 years) of loans for subsequent refinancing.
Management is looking at more AEIs to drive growth. Following AEI is likely to be for NEX with capex of ~S$80-100m, financed by existing JV resources. Commentary suggests construction costs based on tender prices are stable for now.
Frasers Centrepoint Trust wants to be SG-focussed and further grow the portfolio but local assets are tightly held.
Retail outlook remains steady with usual tenant churn. Store openings are almost as active as store closures and backfilling is fast. F&B, jewellery, beauty and education/enrichment are active categories. Cathay Cineplexes account for less than 1% of GRI and Frasers Centrepoint Trust has already provided for the debt. Management is exploring how to use the space.
Maintain BUY.
Read more at SGinvestors.io.
Above is an excerpt from a report by Maybank Research. Clients of Maybank Securities may be the first to access the full PDF report @ https://www.maybanktrade.com.sg/.
Use Trust Referral Code PGKPSWAE to sign up NTUC Link or Trust Link Credit Card or open a Trust Bank savings account this December: ✨Earn up to S$1,000 cashback reward 🎟 and win an XPENG G6 SUV 🚙 !
