Frasers Centrepoint Trust Reports 99.9% Retail Occupancy as Foot Traffic, Sales Rise

Frasers Centrepoint Trust’s latest update paints a picture of robust health in Singapore’s retail sector, with the REIT reporting committed occupancy of 99.9 percent across its nine-asset mall portfolio amid rising foot traffic and store sales.

Committed occupancy during the December-ended fiscal first quarter climbed 1.5 percent year-on-year while shopper traffic jumped 3.1 percent, the SGX-listed trust’s manager said Monday in a presentation. Adjusting for tenants under renovation, sales increased 1.1 percent. All figures exclude FCT’s Central Plaza office tower and the under-renovation Tampines 1 mall.

Prime Singapore retail rents rose by 1.2 percent in the quarter compared with July-September levels, boosting full-year rent growth in 2023 to 4.2 percent, according to CBRE.

“Landlords have sustained rent increases for prime spaces amid limited availability and strong demand from retailers,” the consultancy said in a research report. “In the near term, retailers may continue to face challenges such as manpower shortage, competition from e-commerce and higher operating costs.”

Mall Refreshments

FCT, sponsored by Thai billionaire Charoen Sirivadhanabhakdi’s Frasers Property, has been revamping its collection of suburban Singapore malls, led by a S$38 million ($28.4 million) asset enhancement initiative at Tampines 1.

The mall in the city-state’s eastern region continues to operate as it undergoes AEI works scheduled to conclude in September. The first batch of completed AEI units on the fourth and fifth levels began operating last month and more than 97 percent of AEI spaces are pre-committed, the trust’s manager said.

Last July the REIT announced the procurement of a S$419 million green loan, with the fresh financing to fund decarbonisation projects including instalment of energy-efficient technologies. FCT this year will roll out rooftop photovoltaic solar panels at Tampines 1 and five other malls, namely Causeway Point, Century Square, Hougang Mall, Northpoint City and White Sands.

The trust’s manager is working closely with Frasers Property to achieve the parent group’s goal of net-zero carbon by 2050, according to FCT’s annual report for 2023.

Fine-Tuning the Portfolio

FCT’s manager completed two acquisitions and two divestments during the most recent fiscal year as it sought to bolster the S$6.9 billion trust’s financial position and portfolio strength.

FCT purchased an effective 25.5 percent stake in NEX, the largest mall in northeastern Singapore, for S$529.8 million and acquired an additional 10 percent stake in Waterway Point for S$131.3 million, bringing its total interest in the Punggol peninsula development to 50 percent. With the addition of NEX, FCT owns or jointly owns four of the 10 largest prime suburban malls in Singapore, the others being Northpoint City, Causeway Point and Waterway Point.

The trust in October completed the sale of Changi City Point to a mainland Chinese family for S$338 million and also divested of its interests in Malaysia’s Hektar REIT for S$39.3 million.

The majority shareholders of Frasers Property have been studying potential capital-raising scenarios across the company’s entire portfolio as part of a holistic strategic review. The group could sell some of its assets or the company outright as part of the review, according to a Wall Street Journal report earlier this month.