10 things I learned from the 2021 Frasers Centrepoint Trust AGM

Frasers Centrepoint Trust (FCT) is a SGX-listed real estate investment trust that owns retail malls located in the suburban regions of Singapore. FCT’s portfolio of properties comprises 11 retail malls and an office building with worth approximately a total of S$6.7 billion.

The retail malls are Causeway Point, Northpoint City North Wing (including Yishun 10 Retail Podium), Anchorpoint, YewTee Point, Changi City Point, Waterway Point (40% interest), Tiong Bahru Plaza, White Sands, Hougang Mall, Century Square and Tampines 1.

2020 was indeed a challenging year for REITs, with retail REITs being the worst hit sector globally as the COVID-19 pandemic brought about national lockdowns and social distancing. FCT was not spared from the crisis, as people and businesses in Singapore were impacted. 

Here are 10 things I learned from the 2020 Frasers Centrepoint Trust AGM:

1. Revenue fell 16.3% year-on-year to S$164.4 million while net property income (NPI) declined 20.4% to S$110.9 million. FCT’s financial performance was severely affected by the COVID-19 pandemic due to the imposed mall capacity limits, safe distancing measures, rental reliefs (amounting to S$27.4 million) and various support measures taken throughout the year to help tenants cope with the challenges, said FCT’s CEO Richard Ng during the AGM. Excluding the impact, the decline in revenue and net property income would have been marginal, a decrease of 2.4% and 0.7%, y-o-y respectively.

2. Distribution per unit (DPU) was down by 25.1% to 9.042 cents compared to 12.07 cents a year ago. The lower DPU was mainly due to a decline in financial performance caused by rental rebates dispensed to help tenants cope with challenges from the COVID-19 pandemic. Current yield stands at 3.6% (as of its closing price of S$2.53 on 18 Feb 2021).

3. Occupancy rates held steady at 94.9%, compared to 96.5% a year ago (as at 30 September 2020).

Source: Frasers Centrepoint Trust

Except Anchorpoint and YewTee Point, all properties saw occupancy rates fall between 0.4 and 5.5 percentage points. Occupancy rates at Anchorpoint (as at 30 September 2020) was 13.7 percentage points higher due to transitional fitting out works by an anchor tenant of the mall in the preceding year. 

4. Total borrowings stood at S$1,255 million and average cost of borrowings was at 2.43% (as at 30 September 2020). FCT’s gearing levels stood at 35.9% compared to 32.9% a year ago. The increase was attributed to the increase in borrowings relating to FCT’s acquisition ARF and for working capital purposes during the financial year.

FCT’s gearing level remains at a healthy level when compared to the average of 37.6% in the S-REITs industry. The increase in gearing level has not changed the risk profile of FCT and is well within the 50.0% limit set by the Monetary Authority of Singapore. Interest cover for the year was 4.95 times while average debt maturity stood at 2.1 years as at 30 September.

5. FCT remains focused on strengthening business fundamentals, enhancing growth and reconstituting of its portfolio of malls. On 3 September 2020, FCT announced the acquisition of the remaining 63.1% interest in ARF for S$1.06 billion and the divestment of Bedok Point. The ARF acquisition was completed on 27 October followed by the divestment of Bedok point on 9 Nov and the announcement of the proposed divestment of Anchorpoint for S$110 million on 23 December 2020 (expected to be completed on 22 Mar 2021).

6. With the ARF acqusition, FCT has expanded to the eastern part of Singapore. FCT traditionally has a strong presence in the northern part of Singapore (i.e. Causeway Point in Woodlands, Northpoint City North Wing in Yishun). The completion of the ARF acquisition has expanded its reach islandwide, keeping to its strategy of owning malls in suburban locations that are underpinned by dominant family composition, high recurring shopper traffic and occupancy rates.

7. The CEO highlighted the ARF acquisition as a transformational move, making FCT among the largest suburban retail mall owner in Singapore with a market share of 10.2% (ranked second to CapitaLand Integrated Commercial Trust).

Source: Frasers Centrepoint Trust

As at 19 January 2021, FCT’s market cap is S$4.48 billion, ranked as the seventh largest S-REIT by market capitalisation. The CEO added that the significant increase in scale and size today allows FCT opportunities to be more accessible to fund managers across the world and increase FCT’s proportion to index funds globally.

8. A unitholder asked that moving into Phase 3 and beyond, how will FCT reposition itself to embrace the changes following the COVID-19 pandemic, with more shops going online. Further, what are FCT’s plans to overcome those challenges?

Chairman Dr Cheong said that FCT malls’ close proximity to transportation nodes, densely populated residential areas and focus on essential goods and services provides FCT the ability to drive omnichannel retail strategies and enhance the role of its malls as ‘last-mile’ fulfilment hubs in their immediate residential catchment.

The CEO also added that new omnichannel platforms like the Frasers e-Store and the enhanced Frasers Makan Master; and FCT’s 800,000 Frasers Experience members will support tenants in widening their revenue options through both physical and digital retail offerings. 

9. A unitholder asked what FCT’s growth plans were after the recent acquisitions? Are there any pipeline projects from the sponsor that are worth considering? If not, will FCT look beyond retail or beyond Singapore for M&A opportunities?

Dr Cheong said FCT intends to focus on Singapore and improve the operations and financial performance of the enlarged portfolio of suburban retail malls. He added that there is ample room for growth locally and this may include retail assets in the sponsor’s portfolio, additional stake in Waterway as well as third party opportunities. At the same time, he said that FCT will continue to explore and evaluate acquisition and divestment opportunities to optimise returns for FCT and unitholders. 

10. Despite the unprecedented challenges and tough times of 2020, FCT has displayed resilience and achieved a respectable results which can be attributed to:

  • FCT’s portfolio dominated by well-located suburban retail malls which serves a densely-populated domestic residential population.
  • FCT’s strong focus on essential services. (More than 45% of its net lettable area is occupied by essential services retailers). FCT’s gross rental income contribution was about 53% from these retailers who still operated throughout the circuit breaker and pandemic.
  • Well-diversified portfolio with no single property representing more than 22% of the portfolio’s aggregate value acquisition.

The fifth perspective

FCT moved to half-yearly dividend payments with effect from the second half of its financial year ended 30 September 2020.  Questions on investors’ minds such as when quarterly dividends will be restored, whether DPU and expected earnings will recover to pre-pandemic levels in view of the new normal after Phase 3 remain to be answered.

While portfolio tenants’ sales have recovered to near pre-pandemic levels since its reopening in Phase 2, the recovery rates are uneven among various trade sectors and tenants. Portfolio shopper traffic has remained relatively stable at 60% to 70% of the mall’s pre-pandemic levels. Easing of safe distancing measures in Phase 3 re-opening will likely support further recovery of shopper traffic and tenant sales.

With more than 2.3 million square feet of net lettable space, FCT has the scale to engage more than 1,500 retailers across Singapore and access a catchment population of three million. 

Under pressures of a new normal, FCT’s management of its enlarged portfolio of suburban malls, its strategic push towards omnichannel retail and enhancement of the role of its malls as a ‘last-mile’ fulfilment will be put to the test as they seek to improve FCT’s performance and its returns to unitholders.

Liked our analysis of this AGM? Click here to view a complete list of AGMs we’ve attended »

Julian Kay

Julian graduated with a Bachelor of Business honours degree in banking and wealth management from the University of College Dublin. He possesses CFA Level I and IBF Level 1 Fund Management qualifications, and was previously in the investor relations industry.


  1. Good summary.
    One question that pops into mind though is the WALE (weighted average lease expiry) for this REIT?
    Although for retail REITs WALEs tend to be short, it would be interesting to know how FCT compares with its peers, especially MCT or SPH Reit (which has a heavy retail component).

    1. Hi Jonathan,

      The WALEs of the respective REITs from their latest published annual report as follows:

      – FCT portfolio WALE stood at 1.55 years by net lettable area and 1.51 years by gross rental income. (As at 30 September 2020)
      – SPH REIT’s portfolio WALE by gross rental income was 2.6 years. (As at 31 Aug 2020)
      – MCT’s portfolio WALE was 2.1 years. (As at 31 March 2020)

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