Comprehensive Analysis of Frasers Centrepoint Trust and its REIT Peers

Report by CGS International | January 23, 2025

Frasers Centrepoint Trust: A Resilient Performer in Singapore’s Retail Sector

Frasers Centrepoint Trust (FCT) showcased a strong performance in 1QFY25, with its committed retail portfolio occupancy standing at an impressive 99.5%. Despite minor occupancy dips at Tiong Bahru Plaza (-1.2%), Hougang Mall (-1.2% due to asset enhancement initiatives), and White Sands (-0.7%), higher take-ups at Central Plaza (+2.5%) and Causeway Point (+0.2%) balanced the portfolio.

Shopper traffic grew 2.7% year-on-year (yoy), while tenant sales increased by 2.5% yoy. Management maintained its positive rental reversion outlook, targeting over 7% for FY25. Events during the 2024 Christmas period alone drove over 500,000 additional footfalls.

Key asset enhancement initiatives (AEIs) included the rejuvenation of Tiong Bahru Plaza’s Level 2 Food Street, introducing trendy F&B options, and the return of the Popular bookstore. This achieved a return on investment (ROI) exceeding 20%. Similarly, enhancements at Hougang Mall are underway, with a 50% pre-commitment rate and an expected ROI of approximately 7%.

The report reiterated an “Add” rating for FCT with a target price of S\$2.68, citing strong demand for suburban mall spaces and an active asset management strategy. However, downside risks include potential slowdowns in consumer spending and weakening tenant sentiment.

Hospitality REITs: Evaluating Sector Performances

CapitaLand Ascott Trust (CLAS SP)

CapitaLand Ascott Trust is rated “Add” with a target price of S\$1.18. It recorded a last reported price of S\$0.88 and a market cap of US\$2,455 million. With an asset leverage of 38.3%, it offers dividend yields of 7.0% for FY24F, 7.2% for FY25F, and 7.8% for FY26F.

CDL Hospitality Trust (CDREIT SP)

CDL Hospitality Trust earned an “Add” recommendation with a target price of S\$1.16. Its last traded price was S\$0.87 with a market cap of US\$804 million. Its asset leverage stands at 38.8%, and it offers dividend yields of 6.2% for FY24F, 7.4% for FY25F, and 7.2% for FY26F.

Far East Hospitality Trust (FEHT SP)

Rated “Add” with a target price of S\$0.78, Far East Hospitality Trust has a market cap of US\$908 million. Its asset leverage is 30.8%, and it offers stable dividend yields of 6.9% across FY24F, FY25F, and FY26F.

Frasers Hospitality Trust (FHT SP)

Frasers Hospitality Trust, not rated (NR), last traded at S\$0.55 with a market cap of US\$773 million. It has an asset leverage of 39.3% and is projected to deliver lower dividend yields of 4.1% (FY24F), 4.4% (FY25F), and 4.8% (FY26F).

Industrial REITs: Stability and Growth

AIMS AMP Capital Industrial REIT (AAREIT SP)

Not rated, AIMS AMP Capital Industrial REIT last traded at S\$1.27 with a market cap of US\$754 million. It has an asset leverage of 33.4% and offers robust dividend yields of 7.4% for FY24F, 7.3% for FY25F, and 7.5% for FY26F.

CapitaLand Ascendas REIT (CLAR SP)

CapitaLand Ascendas REIT earned an “Add” rating with a target price of S\$3.23. Its last traded price was S\$2.58, and it has a market cap of US\$8,391 million with an asset leverage of 38.9%. Dividend yields are 6.0% for FY24F, 6.1% for FY25F, and 6.3% for FY26F.

ESR-REIT (EREIT SP)

Rated “Add” with a target price of S\$0.36, ESR-REIT has a market cap of US\$1,547 million. Its asset leverage is 38.9%, and it offers attractive dividend yields of 8.6% across FY24F, FY25F, and FY26F.

Frasers Logistics & Commercial Trust (FLT SP)

Frasers Logistics & Commercial Trust is rated “Add” with a target price of S\$1.35. It last traded at S\$0.88 with a market cap of US\$2,447 million. Its asset leverage is 36.0%, and it provides dividend yields of 7.7% (FY24F), 7.6% (FY25F), and 7.8% (FY26F).

Keppel DC REIT (KDCREIT SP)

Keppel DC REIT earned an “Add” recommendation with a target price of S\$2.48. Its last traded price was S\$2.22, and it has a market cap of US\$3,625 million with an asset leverage of 33.0%. Dividend yields are projected at 4.1% (FY24F), 4.5% (FY25F), and 4.7% (FY26F).

Mapletree Industrial Trust (MINT SP)

Mapletree Industrial Trust is rated “Add” with a target price of S\$2.82. Its last traded price was S\$2.21, and it has a market cap of US\$4,651 million. With an asset leverage of 39.7%, it offers dividend yields of 6.1% (FY24F), 6.3% (FY25F), and 6.4% (FY26F).

Mapletree Logistics Trust (MLT SP)

Rated “Add” with a target price of S\$1.73, Mapletree Logistics Trust has a market cap of US\$4,710 million. It last traded at S\$1.26 with an asset leverage of 40.3%. Dividend yields are 7.1% (FY24F), 6.4% (FY25F), and 6.0% (FY26F).

Retail REITs: Strong Demand in Suburban Spaces

CapitaLand Integrated Commercial Trust (CICT SP)

CapitaLand Integrated Commercial Trust is rated “Add” with a target price of S\$2.45. Its last traded price was S\$1.94, and it has a market cap of US\$10,465 million with an asset leverage of 39.4%. Dividend yields are 5.6% (FY24F), 5.9% (FY25F), and 6.2% (FY26F).

Lendlease Global Commercial REIT (LREIT SP)

Rated “Add” with a target price of S\$0.71, Lendlease Global Commercial REIT last traded at S\$0.55. It has a market cap of US\$976 million and an asset leverage of 40.7%. Dividend yields are 7.1% (FY24F), 7.2% (FY25F), and 7.3% (FY26F).

Mapletree Pan Asia Commercial Trust (MPACT SP)

Mapletree Pan Asia Commercial Trust is rated “Add” with a target price of S\$1.53. Its last traded price was S\$1.19, and it has a market cap of US\$4,630 million with an asset leverage of 38.4%. Dividend yields are 7.5% (FY24F), 6.8% (FY25F), and 7.0% (FY26F).

Paragon REIT (PGNREIT SP)

Paragon REIT is rated “Hold” with a target price of S\$0.92. It last traded at S\$0.88, with a market cap of US\$1,847 million and an asset leverage of 35.9%. Dividend yields are 5.0% (FY24F), 5.4% (FY25F), and 5.6% (FY26F).

Starhill Global REIT (SGREIT SP)

Rated “Add” with a target price of S\$0.60, Starhill Global REIT last traded at S\$0.50. It has a market cap of US\$846 million with an asset leverage of 36.8%. Dividend yields are 7.3% across FY24F, FY25F, and FY26F.

Conclusion

The CGS International report provides a detailed and insightful analysis of Frasers Centrepoint Trust and its peers across various REIT segments. With robust performances, strategic asset enhancements, and promising dividend yields, these REITs present compelling opportunities for investors seeking exposure to Singapore’s thriving real estate sector.