FOLLOWING the Straits Times Index’s (STI) March quarterly review, it was announced that Frasers Centrepoint Trust (FCT) will be added to the STI and Emperador to be removed from it, effective at the start of business next Monday (Mar 18). This brings the total number of Singapore real estate investment trusts (S-Reits) in the STI to seven.
At a market capitalisation of S$3.9 billion, FCT will join the STI with an approximate weight of 0.8 per cent. FCT is also the second Frasers Property-sponsored Reit to join the benchmark after Frasers Logistics & Commercial Trust. The combined indicative weightage of the seven S-Reits in the STI will be around 12.5 per cent.
FCT listed in Singapore on July 5, 2006, with an initial public offering (IPO) price of S$1.03. According to Bloomberg data, FCT has paid more than S$1.80 per unit in distributions since its listing. This brings its annualised total returns since the IPO to 10 per cent. At listing, FCT’s initial portfolio consisted of just three suburban malls – Causeway Point, Northpoint and Anchorpoint – with a combined value of S$915 million at the time.
Today, FCT’s portfolio has grown to nine suburban retail malls and an office building with a combined S$6.5 billion in assets under management as at Dec 31, 2023. FCT is also one of the three remaining pure-play Singapore property S-Reits alongside Sabana Industrial Reit and Far East Hospitality Trust.
FCT has also been active on the acquisition and divestment front in recent years. The Reit most recently increased its initial 25.5 per cent acquisition of retail mall Nex in February 2023, to a 50 per cent interest, which was partially funded with a private placement of S$200 million. Nex is seen as a strategic fit for FCT’s prime suburban retail portfolio.
The mall is the largest suburban mall in the north-east of Singapore by net lettable area and is easily accessible by the integrated Serangoon Bus Interchange and Serangoon MRT.
In FCT’s latest business updates for Q1 2024 ended Dec 31, 2023, the Reit recorded stronger operating performance with improved committed occupancy at 99.9 per cent and shopper traffic 3.1 per cent higher year on year. Tenant sales for the Q1 2024 period was 0.7 per cent lower year on year due to the renovation of several anchor tenants, but overall tenant sales for the whole year of 2023 was approximately 18 per cent above pre-Covid levels.
In terms of sustainability initiatives, FCT projects annual savings of about S$1 million in operating expenditure from its various initiatives, one of which is rolling out solar photovoltaic panels across six of its malls from this year as part of its net zero carbon initiatives to reduce Scope 1 and Scope 2 greenhouse gas emissions by 67 per cent from the 2019 baseline, by 2035.
FCT has ranked among the top 35 stocks by trading turnover this year, while also ranking among the 15 stocks that have booked the most net institutional inflows. FCT is also the only S-Reit that has recorded net buying activities across both institutional and retail investors.
The STI reserve list, which consists of the five highest ranking non-constituents of the STI, will be: CapitaLand Ascott Trust, ComfortDelGro, Keppel DC Reit, Keppel Reit, and Suntec Reit.
The writer is a research analyst at SGX. For more research and information on Singapore’s Reit sector, visit sgx.com/research-education/sectors for the monthly S-Reits & Property Trusts Chartbook.
Source: SGX Research S-Reits & Property Trusts Chartbook
