Frasers Centrepoint Trust Q3 FY2024 Update (Apr 2024 To Jun 2024)

Much of the business updates for Frasers Centrepoint Trust (FCT) tend to be rather boring, and that is a good thing to me.

Whether you are a curious investor or just someone who loves a good mall trip, this Q3 FY2024 report by FCT has some interesting tidbits that might surprise you. From nearly full occupancy rates to upcoming tailwinds, FCT’s update paints a picture of resilience in the face of high interest rates.

You can view the presentation slides for the FCT Q3 FY2024 business updates here.

There Is Low New Retail Supply For Singapore

One new thing that I learnt from the presentation slides by Frasers Centrepoint Trust is that OCR refers to Outside Central Region.

Scrolling through the update, I chanced upon this term, which I knew nothing about.

A quick check here revealed that Singapore is made up of 28 districts divided into three market segments.

Instead of being geographically separated, these are based on their proximity to the central region.

1. Core Central Region (CCR) e.g. Orchard (District 9)
2. Rest of Central Region (RCR) e.g. Tiong Bahru (District 3)
3. Outside Central Region (OCR) e.g. Punggol (District 19)

FCT’s Financial Position Is Healthy

I have already shared about the debt situation for FCT in a previous article.

FCT has not issued any hybrid securities, so its adjusted ICR and ICT are the same at 3.26x.

The leverage limit inched up slightly to 39.1%, but I think there is nothing to worry about at the moment.

Because it is higher than 2.5 times, FCT is able to increase its leverage limit beyond 45% (up to 50%) if necessary.

Almost 100% Committed Occupancy For FCT

More than 99% committed occupancy has been achieved at every mall in FCT’s portfolio, including Tampines 1, which is slated to relaunch in September 2024.

Good news is good news, there isn’t much to say about this but investors should be glad to see the resilience of FCT.

Shopper Traffic and Tenants’ Sales

Shopper traffic is still slightly below the pre-COVID average, but interestingly, tenants’ sales are way higher.

FCT Tailwinds For Upcoming Months

Despite the high interest rate environment, there are positive tailwinds to be happy about.

The acquisition of the 24.5% effective interest in NEX (FCT now owns 50% in total) will make a full contribution from 2H FY2024 onwards. (see update in October 2024)

Tampines 1 AEI (asset enhancement initiative) is on schedule to be completed by September 2024 and will make a full contribution from FY2025. (see update in April 2025)

Frasers Centrepoint Trust has hinted that that they will announce plans for another AEI project to drive growth when the time is right.

Riding on the expectations that the next FOMC meeting will see a rate cut, FCT could be one of the early beneficiary when it comes to share price.

Read About Frasers Centrepoint Trust

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