Frasers Centrepoint Trust

For 2H FY25, gross revenue increased 14.3% year on year, mainly from Northpoint City South Wing and the completion of Tampines 1 AEI, partly offset by Hougang Mall AEI downtime; excluding those three malls, gross revenue was 2.1% higher. 2H property expenses rose 20.1% year on year, and 2H NPI was up about 12%; excluding the three malls, NPI was about 1% higher. Full-year gross revenue was also higher; excluding the three malls, it was about 2.4% higher. Full-year property expenses increased 13.5%, full-year NPI rose 9.7%, and DPU for FY25 was $0.12113, up 0.6% from $0.12042 in FY24; 2H DPU was $0.06059. NAV was $2.23 versus $2.29 last year. Aggregate leverage was 39.6%, interest coverage was 3.46x, average debt maturity was 3.16 years, and average cost of debt was 3.8% for FY25, with quarter-end cost of debt at 3.5%. Management guided to about 3.3% to 3.4% funding costs for FY26 at current rate levels.

Richard Ng emphasized that FY25 results came from a combination of acquisitions, divestments, AEIs and active portfolio reconstitution. He highlighted tight retail supply, resilient demand, strong traffic and sales trends, and said these dynamics should support the portfolio into FY26. His tone was constructive but pragmatic: he repeatedly stressed controllable actions such as AEIs, tenant mix refresh and placemaking, while saying M&A remains opportunistic.

Annie Khung said the Northpoint City South Wing acquisition, Tampines 1 AEI completion and Hougang Mall AEI affected year-on-year comparisons, but underlying growth remained positive after stripping out those items. She noted leverage fell to 39.6% after loan repayments funded by perpetual securities and Yishun 10 divestment proceeds, while the hedge ratio rose to 83.4% and the credit rating stayed at Baa2 stable. She also said the one-off JV distribution was about $9 million and explained that the reported $11 million revaluation loss included about $41 million of accounting fair value loss tied to Northpoint City South Wing, offset by a true fair value gain of $30.7 million on investment properties.

Analysts asked whether FY26 would be driven more by organic growth or acquisitions, and management said the near-term focus is organic improvement, AEIs and repurposing space, while acquisitions remain opportunistic if pricing and fit are attractive. Questions on Cathay-related vacancies and arrears drew a response that the outstanding amount referenced publicly was $3.3 million, that legal recovery is ongoing, and that management is exploring both cinema and non-cinema replacement options. Analysts also pressed on reversions, tenant sales, and funding costs; management guided to mid-single-digit positive rental reversion on a sustainable basis, said FY25 tenant sales growth was slightly below 2% excluding Northpoint South Wing and cinema drag, and expected FY26 funding costs of about 3.3% to 3.4%.