On 29 April 2025, Frasers Centrepoint Trust (“FCT”) have announced their half year result for FY2025. There were no significant changes during this quarter, and their portfolio continues to remain stable. FCT has increased the percentage of debt hedged to fixed interest rate from the previous quarter, which may be a good move from FCT management to mitigate the risk of potential interest rate increases with the ongoing trade war. Investors will need to monitor over the next few quarters if there are any impacts.
The equity fund raising that was completed in April 2025 also seems to be well received, with the share price being able to remain above the subscription share price throughout the period. The proceeds will be used to fund the acquisition of Northpoint City South Wing and repay existing debts. This will continue to consolidate FCT’s position as Singapore’s leading prime suburban retail space owner, while improving their debt profile.
Disclaimer: Not financial advice. All data and information provided on this site is for informational purposes only.
Website: Financial Statements And Related Announcement::Second Quarter And/Or Half Yearly Results
Website: General Announcement::Use of Proceeds From The Equity Fund Raising
Financial Highlights
Distribution Per Unit (“DPU”)
| Metrics | Current | Previous |
|---|---|---|
| Distribution Per Unit | +0.6% | No Update |
| Rating | Favorable | Unfavorable |
DPU for the first half of FY2025 has increased by 0.6% to SGD0.06054 per unit from SGD0.06020 per unit in the second half of FY2024. The metric is Favorable as FCT was able to increase DPU, though the increase is not significant.
Occupancy
| Metrics | Current | Previous |
|---|---|---|
| Occupancy | 99.5% | 99.5% |
| Rating | Favorable | Favorable |
Occupancy rate as of 31 March 2025 remained unchanged at 99.5%. This metric remains Favorable as it is above my expected healthy occupancy rate of 95%.
Gearing ratio
| Metrics | Current | Previous |
|---|---|---|
| Gearing Ratio | 38.6% | 39.3% |
| Rating | Neutral | Neutral |
Gearing ratio as of 31 March 2025 has decreased to 38.6%. Noted the decrease was due to a decrease in borrowings, with an amount of SGD 2,057 million as of 31 March 2025 from SGD 2,105 million in the previous quarter. The metric remains Neutral. Gearing ratio may further decrease next quarter with the equity fund raising in April 2025.
Interest coverage
| Metrics | Current | Previous |
|---|---|---|
| Interest Coverage | 3.3x | 3.3x |
| Rating | Favorable | Favorable |
The adjusted interest coverage as of 31 March 2025 remain relatively unchanged at 3.3 times. The metric remains Favorable as it is above my preference of 3.0 times.
Debt maturity profile
| Metrics | Current | Previous |
|---|---|---|
| Debt Maturity Profile | 3.0 years | 3.0 years |
| Rating | Favorable | Favorable |
Weighted average term to maturity of their debt as of 31 March 2025 remains unchanged at 3.0 years. The metric remains Favorable as there is sufficient time to refinance their debts as they fall due. Do note that approximately 22.1% of their debt will mature by the end of FY2026.
Price to Book Ratio
| Metrics | Current | Previous |
|---|---|---|
| Price to Book Ratio | 0.96 | 0.93 |
| Rating | Favorable | Favorable |
The Price to Book (“P/B”) ratio increased to 0.96. This is computed using the closing share price of SGD2.19 on 16 May 2025 and the net asset value per share of SGD2.28 as of 31 March 2025. The P/B ratio is Favorable given the slight discount to book value.
As of 16 May 2025, the Market Capitalization is approximately SGD4,429 million.
Website: Yahoo Finance: Frasers Centrepoint Trust (J69U.SI)
Other Metrics
Tenant profile
FCT has a well-diversified tenant profile with the top 10 customers as of 31 March 2025 account for about 19.3% of monthly portfolio gross rental income. Furthermore, no single tenant accounts for more than 5.4% of FCT’s gross rental income. This is Favorable as FCT will not be too reliant on any single tenant for income.
Heartland Living
The Singapore government intend for every town to have a shopping mall available and successful. Such that they are willing to have measures to help support heartland businesses financially. This means that as an investor of retail properties, you can be assured that there will almost always be tenants for your shopping malls, which translates to rental income. It may still be subjected to capital depreciation and appreciation when exposed to economic conditions, such as the current high interest rates. However as of now, your interests are in line with the government.
Website: The Bull Case For Investing In Singapore Retail Property
Dividend
| Year | Yield | Total |
|---|---|---|
| 2025 | 2.81% | SGD 0.062 |
| 2024 | 5.50% | SGD 0.120 |
| 2023 | 5.55% | SGD 0.122 |
| 2022 | 5.58% | SGD 0.122 |
| 2021 | 5.46% | SGD 0.120 |
| 2020 | 4.19% | SGD 0.092 |
With the payout in May 2025, the expected total payout for the calendar year 2025 is likely to be slightly higher than the calendar year 2024. As a conservative estimate, we will continue to use the amount of SGD0.120 per share for the calendar year 2024 as a base. With a closing share price of SGD2.19 on 16 May 2025, this translates to a dividend yield of 5.50%. For my benchmark, a general reasonable range would be around 5.25%. The dividend yield is Favorable.
Website: Reasonable Dividend Yield 2025Q2 – 5.25%
Investors will need to be mentally prepared that the share price may fall further should the interest rates and yield of safe assets increase. If the required dividend yield increases to 6.25% as a benchmark, based on the dividend of SGD0.120 per share there is potential for FCT to see its share price drop by another 12.3% to SGD1.92.
| Yield | Share Price | Downside |
|---|---|---|
| Current | 2.19 | – |
| 6.25% | 1.92 | -12.3% |
| 7.25% | 1.66 | -24.4% |
Interest Rate Sensitivity
The Federal Reserve on 8 May 2025 have kept interest rates unchanged at a range of 4.25% to 4.50%, despite pressure from Trump to lower borrowing costs. The US central bank has warned that President Donald Trump’s tariffs have created “so much uncertainty” that it is unsure what to do about interest rates. The chairman Jerome Powell said the economic fallout from Trump’s tariffs meant it was “not at all clear” what the bank should do next.
Website: Fed holds rates because of tariff ‘uncertainty’
As FCT have debts that are exposed to floating rate, any change in interest rate will result in FCT experiencing changes to their cost of debt. Below is the debt profile for FCT as of 31 March 2025:
| Description | Amount (SGD’000) |
|---|---|
| Total Debt | $2,057,400 |
| Debt Not Hedged (%) | 24.2% |
| Debt at Floating Rate Exposed | $497,891 |
| Distributable Income FY2024 | $214,313 |
I have performed the interest rate sensitivity analysis as below:
| Change in Interest Rates | Change in Distributable Income (SGD’000) | Change as % of FY2024 Distribution |
|---|---|---|
| 50 bps | $2,489 | 1.2% |
| 100 bps | $4,979 | 2.3% |
| 150 bps | $7,468 | 3.5% |
| 200 bps | $9,958 | 4.6% |
Do note the above is my estimation which may be different from management’s estimation. Nonetheless, if the interest rates were to change by the basis points above, FCT may experience a change in DPU accordingly.
Summary
| Metrics | Financials | Rating |
|---|---|---|
| Distribution Per Unit | +0.6% | Favorable |
| Occupancy | 99.5% | Favorable |
| Gearing Ratio | 38.6% | Neutral |
| Interest Coverage | 3.3x | Favorable |
| Debt Maturity Profile | 3.0 years | Favorable |
| Price to Book Ratio | 0.96 | Favorable |
| Overall | Favorable |
Overall, there were no significant changes for this quarter and the metrics remain Favorable to invest in FCT. Investors can continue to monitor and wait for the next quarter update for any changes.
Background
FCT is a leading developer-sponsored REIT and one of the largest suburban retail mall owners in Singapore. FCT’s property portfolio comprises nine retail malls and an office building located in the suburban regions of Singapore, near homes and within minutes to transportation amenities.
FCT is among the top ten largest Singapore REITs (“S-REITs”) by market capitalization. It is also an index constituent of several benchmark indices including the FTSE EPRA/NAREIT Global Real Estate Index Series (Global Developed Index), FTSE ST Real Estate Investment Trust Index, MSCI Singapore Small Cap Index and the SGX iEdge S-REIT Leaders Index.
Listed on the Main Board of the Singapore Exchange Securities Trading Limited since 5 July 2006, FCT is managed by Frasers Centrepoint Asset Management Ltd., a real estate management company and a wholly owned subsidiary of Frasers Property Limited.
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Website: Frasers Centrepoint Trust (SGX: J69U): 2025 First Quarter Business Update
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