Frasers Centrepoint Trust 1QFY26’s business update continue to point towards steady operations. Key developments this quarter include the successful backfilling of cinema spaces at Causeway Point and Century Square with SAS cineplex and Golden Village respectively. This brought portfolio occupancy back up to 99.9% this quarter from 98.1% last quarter.
Shopper traffic and tenant sales rose
- Read this at SGinvestors.io -
Balance sheet metrics remained broadly stable. Aggregate leverage increased marginally q-o-q to 40.3 percent from 39.6 percent, accounting for outgoing capex needs for Hougang Mall AEI.
All-in quarter average cost of debt held flat at 3.5 percent and guided to maintain at current levels for the rest of the year on 81% in-place fixed rate hedge.
Our view -
Enhancement initiatives continue to be the key medium-term growth lever.
- Read this at SGinvestors.io -
We continue to like management’s disciplined approach to refresh and rejuvenate portfolio malls in a timely manner, including Tampines 1 and ongoing Hougang Mall to maintain competitive. Phase 1 of Hougang’s AEI completion brought across several new to Hougang concepts including Sukiya and local dim-sum specialty chain Swee Choon. Overall leasing pre-commitment for Hougang Mall post-AEI has exceeded 80% and track in line to ROI target of ~7%.
The larger NEX AEI was announced to start commencement in 1Q CY26. Estimated capex for NEX totals ~S$ 90 m and on a 2-year completion timeline. The AEI will add ~44k sqft of NLA through conversion of 62k GFA from carpark and we anticipate a substantial uplift to asset valuations with the NEX's total NLA expanding 7% on completion.
While reversions for the quarter was not disclosed, management is guiding for a full year +5% positive rental reversions with stable interest cost at 3.5%. Frasers Centrepoint Trust will be a closely watched counter as the JB-SG RTS sets to launch end-26, posing as an overhang for the overall retail sector and with concerns slightly tilted towards Northern catchment malls closer to the upcoming train connectivity.
Maintain BUY
Read more at SGinvestors.io.
Above is an excerpt from a report by DBS Group Research. Clients of DBS may access the full PDF report @ https://www.dbs.com/insightsdirect/.
