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KGI Securities revealed that Frasers Centrepoint Trust (FCT), which has a market capitalization of $2 billion, could be negatively impacted by the scrapping of contracts by its major tenants, reported the Singapore Business Review.
While the report did not identify which anchor tenants terminated their contracts, FCT published a presentation slide on 21 August showing that it owns six suburban retail properties situated in densely-populated residential areas across Singapore.
These comprise Bedok Point, Anchorpoint, YewTee Point, Causeway Point, Changi City Point and Northpoint City North Wing
Moreover, KGI Securities said that the appetite for retail space in Singapore could fall due to bearish business sentiments arising from a prolonged slump in economic activities. The research house also noted that a spike in interest rate could lead to a de-rating for Singapore real estate investment trusts (S-REITs).
Nevertheless, it noted that FCT could consider the addition of other properties into its portfolio as a key catalyst.
“A potential divestment of underperforming malls such as Bedok also seems possible, in our view,” added KGI Securities.
In the third quarter of this year, FCT’s revenue increased by 10.9 percent to $48.32 million on an annual basis, while its net property income (NPI) rose by 13.7 percent to $35.01 million.
Furthermore, rentals from renewal and replacement leases from FCT’s properties recorded an average gain of 4.2 percent over expiring rental agreements.
Eugenia Rosaline Shlaen edited this story. To contact her about this or other stories, email eugenia@propertyguru.com.sg
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