Overview of the Report

This report by CGS International provides a comprehensive financial analysis of Frasers Property Limited (FPL) and its peers in the Singapore property development and investment sector. The document highlights FPL’s financial performance, strategic initiatives, and ESG efforts while benchmarking it against key industry players including APAC Realty Ltd, Capitaland Investment, City Developments, Hongkong Land, and UOL Group. The report delivers critical insights, stock recommendations, and forward-looking metrics to guide investment decisions.

Frasers Property Limited (FPL)

Frasers Property Limited is positioned as a key player in the Singapore property development and investment landscape. The report reiterates an “Add” recommendation for FPL with a target price of S\$1.41, reflecting a significant 66.4% upside from its current price of S\$0.85. The company’s net debt-to-equity ratio stood at 86.4% as of 1QFY9/25, reflecting a concerted effort to optimize capital efficiency amid a high-interest-rate environment.

Key Highlights

• FPL’s unbilled residential revenue stands at approximately S\$0.93 billion, driven by strong sales in Australia and China.
• The launch of “The Orie” in January 2025 witnessed an estimated 86% take-up rate of its 777 units, selling at S\$2,704 per square foot.
• Plans for a 348-unit redevelopment project at Robertson Walk/Fraser Place in 2025F, alongside six launches in Thailand targeting younger buyers with a GDV of S\$385.3 million.
• Robust industrial and logistics (I&L) performance in Australia and Europe with occupancy rates ranging from 96.7% to 100%.
• Hospitality segment shows mixed performance: strong growth in Japan and the UK offset by softer results in Spain.

Financial Metrics

FPL’s projected net profit for FY25F is S\$197.2 million, with a dividend yield of 5.29%. The company emphasizes active capital recycling, value unlocking, and improving free float to enhance trading liquidity as potential re-rating catalysts. However, key risks include slower value unlocking activities and dampened demand for logistics and industrial space.

Peer Analysis: Singapore Property Developers

APAC Realty Ltd

APAC Realty Ltd is rated “Add” with a target price of S\$0.45, representing modest upside potential. The company has a relatively small market capitalization of US\$116 million. Its core P/E for FY24F is 13.2x, with a dividend yield of 5.8%.

Capitaland Investment

Capitaland Investment (CLI) is another standout in the industry, marked with an “Add” recommendation and target price of S\$4.30. With a market capitalization of US\$9,259 million, CLI offers a forward P/E of 13.4x for FY24F. However, it trades at a steep 47% discount to its RNAV of S\$4.78. CLI also provides a dividend yield of 4.8%.

City Developments

City Developments (CDL) is rated “Add” with a target price of S\$8.97, reflecting significant upside from its current price of S\$5.06. CDL has a market capitalization of US\$3,346 million and offers a core P/E of 10.9x for FY24F. It trades at a 69% discount to its RNAV of S\$16.30, with a dividend yield of 2.4%.

Hongkong Land Holdings

Hongkong Land Holdings is rated “Hold” with a target price of S\$4.95. The company, valued at US\$9,621 million, trades at a forward P/E of 12.6x for FY24F. Its stock price is at a significant discount to book value, with a P/BV of 0.30x and a dividend yield of 5.3%.

UOL Group

UOL Group receives an “Add” recommendation with a target price of S\$8.20, reflecting its strong investment potential. UOL’s market capitalization is US\$3,195 million, with a forward P/E of 11.1x for FY24F. It trades at a 63% discount to RNAV of S\$13.66, with a dividend yield of 2.9%.

ESG and Sustainability Efforts

Frasers Property Limited scores a B on the LSEG ESG index, with strong ratings in environmental (A-) and governance (B) performance. The company aims to achieve net-zero carbon emissions by 2050 and green-certify 80% of its owned and managed assets by 2024. As of FY23, 51% of its operational properties and 90% of new developments are green-certified or pursuing certification. ESG efforts include arranging S\$3.5 billion in green financing during FY23, bringing the total to S\$11.4 billion.

Conclusion

The Singapore property development sector, led by Frasers Property Limited and its peers, presents a mix of opportunities and challenges. While FPL’s strong unbilled revenue pipeline, robust I&L performance, and sustainability initiatives are commendable, the broader industry faces risks from a weaker macroeconomic outlook and shifting demand dynamics. Investors are advised to consider these factors while leveraging the insights and recommendations from CGS International’s detailed analysis.