On the gearing front, FCT’s aggregate leverage ratio increased from 39.6% to 40.3% in 1QFY2026, while all-in cost of debt stood at 3.5%, which was unchanged from the preceding the quarter's average.
Wong also mentions that FCT’s share price has underperformed year-to-date, declining 3.0% (as at Jan 23 close), compared to the SGREIT Index’s 1.1% gain.
He believes that the underperformance could be driven by concerns over potential retail sales leakage, especially in the northern part of Singapore, once the Johor Bahru-Singapore Rapid Transit System (RTS) Link Project commences operations at the end of 2026.
“Such worries are valid, but we believe these concerns are overdone with mitigating factors in place such as upcoming 20,300 and 13,500 new housing units being earmarked in the North Region and Northeast Region, respectively, where a number of FCT’s key malls are located,” explains Wong.
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As such, he lowers FCT’s fair value estimates from $2.59 to $2.49 as he increases the cost of equity assumption from 6.1% to 6.3% to take into account FCT’s higher gearing ratio and near term uncertainties over retail sales leakage.
Maybank Securities Krisha Guha, meanwhile, says FCT delivered a set of “resilient performance” in 1QFY2026.
In his Jan 27 report, Guha has retained his DCF-based target price of $2.60 on FCT and states that its 1QFY2026 business update underscored a stable operating performance and continued efforts to renew existing assets.
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At the same time, FCT announced AEI works at NEX mall for $90 million and targets a ROI of 7% and adding 44,000 sq ft of NLA. The AEI works will commence in 2QFY2026 and will last around two years.
“We believe FCT will mitigate the AEI impact on income through payment of management fees in units. FCT’s management also indicated potential AEI for Causeway Point mall,” states Guha.
Concurrently, Guha lowers his DPU forecast for FY2026 and FY2027 by 0.2% and 0.7% respectively, factoring in lower distribution from JV following the start of NEX AEI and short-term backfilling for Causeway Point.
PhillipCapital’s Darren Chan, meanwhile, has upgraded FCT from “buy” to “accumulate" with an unchanged target price of $2.74 due to recent share price performance.
Chan mentions that FCT’s 1QFY2026 shopper traffic and tenants’ sales remained healthy at +1.3% and +2.7%, respectively.
As such, he is not changing his forecast and predicts that FCT’s FY2026 rental reversion will stay healthy at 5%, supported by limited new retail supply and a low occupancy cost of around 16%.
For RHB Bank Singapore’s Vijay Natarajan, he believes that the resilient consumer spending is backed by the fact that FCT saw a faster growth figure in its tenant sales, compared against the growth figure in the shopper traffic.
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“Asset enhancement will be a key near-term driver with major plans for value unlocking at two of its malls, mainly Hougang Mall and NEX, with an attractive ROI target of around 7%,” says Natarajan.
Also, Natarajan believes that the concerns over the negative impact of the upcoming Johor Bahru–Singapore RTS are slightly overblown, as the potential retail sales leakage can be offset by a significant planned increase in housing units in the northern region.
Given that FCT is currently trading at 1 time P/BV, the analyst sees value in the REIT and hence keeping his “buy” call and a target price of $2.70.
Lastly, Jonathan Koh from UOB KayHian sees the upcoming AEI works at NEX mall will strengthen Nex’s positioning as the key retail hub in the northeast region.
“Trade mix and rents would be optimised through re-mixing, resizing and reconfiguration. New office space would be added at Level 4, which contributes to growth in shopper traffic,” states Koh in his Jan 27 report.
Similar to the other analysts, Koh foresees the leakage of consumer spending caused by the JB-Singapore RTS Link is mitigated by population growth in Causeway Point’s catchment area.
Koh is maintaining a “buy” call on FCT and a target price of $2.90. The target price is based on DDM where the cost of equity is at 6.5% and terminal growth of 2.2%.
As at 2.37pm, units in FCT remained unchanged at $2.26.
