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AnalysisSGX

7 things I learned from the 2022 Frasers Property AGM

Frasers Property is a multinational real estate and property management company that owns, develops, and manages a property portfolio worth S$42.6 billion as at 31 December 2021. Its portfolio comprises commercial, hospitality, retail, residential, and industrial assets located in over 70 cities and 20 countries including Singapore, China, UK, and Australia.

Frasers Property is also the sponsor of four Singapore-listed REITs: Frasers Centrepoint Trust, Frasers Commercial Trust, Frasers Hospitality Trust, and Frasers Logistics & Industrial Trust. As a REIT investor myself, I was interested to learn and understand more about the parent company behind the Frasers family of REITs.

Here are seven things I learnt from the 2022 Frasers Property AGM:

1. Revenue grew 4.6% year-on-year to S$3.76 billion in FY2021. Similarly, profit before interest, fair value change, tax and exceptional items (PBIT) grew 14.4% to S$1.42 billion in FY2021. CEO Panote Sirivadhanabhakdi mentioned that industrials continued to be a bright spot for Frasers Property in light of the pandemic by providing significant boost to the group financial performance for FY2021. Despite a good year for industrials, there are business segments which were affected by the pandemic, especially hospitality.

2. Eighty-eight percent of the Group’s property assets as at 30 September 2021 are in recurring income asset classes (retail, hospitality, industrial and, commercial), and 68% of Group’s FY21 PBIT are recurring in nature. The CEO added that Frasers Property has shifted its portfolio toward recurring income assets which allow the group to remain stable in the face of industry headwinds and uncertainties.

Source: Frasers Property FY21 Results Presentation


3. Frasers Property total assets grew 3.9% year-over-year to S$40.3 billion in FY2021. Attributable profit in FY2021 was S$833.1 million.
In FY2016, industrials and logistics assets made up 11% of the portfolio which has increased to 31% in FY2021. A portfolio of industrial and logistics properties in Australia and Europe were reclassified to investment properties, which boosted the Group’s attributable profit in FY2021.

4. Frasers Property declared a dividend of 2.0 cents per share for FY2021. This is a 33.3% year-on-year increase compared to 1.5 cents in FY2020. However, the dividend per share has significantly decreased compared to 8.6 cents in FY2016. The management is being conservative as we go through this endemic phase of the pandemic.

5. Frasers Property encompasses a well-diversified portfolio across asset classes and geography. The CEO highlighted that Frasers Property has nearly doubled its assets under management (AUM) since it re-listed on the SGX in 2014. He added that Frasers Property will continue to develop its industrial and logistics pipeline based on growth possibilities. The retail industry will also be well positioned when COVID limitations in countries are eased. However, the hospitality sector will likely be the last to recover due to the lack of global travel.

Source: Frasers Property FY21 Results Presentation

6. A unitholder mentioned that Frasers Property has a sizable AUM and asked if the management had plans to restructure the business to increase productivity and efficiency as well as capital allocation. The management explained that they continually review the Group’s business structure and, will pursue any viable opportunities to meaningfully increase shareholder value in a sustainable manner. At the same time, the key focus throughout the pandemic is to exercise discipline and effectively deploy capital for better return of their portfolio.

‘As real estate segments converge amid trends such as the accelerated rise of e-commerce and work-from-home arrangements, our capabilities in mixed-use property development and management, as well as placemaking, are important differentiators.’ – Frasers Property

7. A unitholder asked how the One Bangkok project is progressing and if it will be a profitable project. The CEO said that One Bangkok is a high-profile and large-scale project. He reassured shareholders that the project is on schedule, while the first phase is still two years away.

When completed the project will consist of five Grade A office towers, five luxury and lifestyle hotels, three ultra-luxury residential towers, four distinctive retail precincts and cultural spaces. He added that One Bangkok will differentiate itself from its peers once it is fully constructed.

The fifth perspective

The pandemic has accelerated many structural trends and Frasers Property remains cognisant of the need to evolve and build a future-ready and resilient business.

Amid the challenging operating environment for the hospitality unit, I believe Frasers Property will continue building capabilities to reinforce the foundation and future readiness of the group’s businesses. Thus, this will underpin the Group’s ability to deliver value over the long term and through various business cycles.

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

Lim Zheng Jie

Zheng Jie has a keen interest in the growing intersection of finance and programming. He was placed on the Director's List at Nanyang Polytechnic and graduated with a Diploma with Merit in Financial Informatics. An SAS Institute scholar, Zheng Jie was also a PolyFintech 100 Hackathon Finalist for his blockchain project. He will be pursuing computer science as an undergraduate.

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