“This should enable the group to lower its net debt-to-equity ratio of 0.89 times as at end of FY2025 and potentially increase its DPS in the medium term, management indicated,” says Lock.
During her visit to ARAYA – The Eastern Gateway, which is one of the best-in-class industrial developments, it offers a comprehensive ecosystem, including an industrial technology campus with modern amenities and based on her ground checks indicates robust demand for industrial & logistics (I&L) facilities.
Meanwhile, Lock mentions that Frasers Property’s residential segment continues to face headwinds from the anemic economic growth. As such, the group has fine-tuned its residential launches to target business owners or high-level management buyers.
“Management indicated One Bangkok continues to see higher physical occupancy within its office component, while the opening of Ritz Carlton Hotel has also attracted robust occupancy and good F&B revenue, thanks to its attractive location for events,” mentions Lock.
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Lock is reiterating her “add” rating on Frasers Property with an unchanged target price of $1.41, based on a 45% discount to RNAV of $2.56. The analysts point out that active capital recycling and improvements in its free float and trading liquidity are potential re-rating catalysts.
In Chan’s un-rated Dec 8 report, he states that Frasers Property’s key focus is still largely on capital recycling and could help narrow the current 57% discount to book value.
“The group has actively recycled capital into its listed REITs in Singapore and Thailand, as well as to third parties, to unlock value and lower net debt-to-equity, which stood at 89.2% as at Sept 30,” says Chan.
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In FY2025, Frasers Property made $1.4 billion in divestments, of which 45% was recycled into its listed REITs.
In Chan’s view, the key earnings drivers for Frasers Property include building its development pipeline by securing quality sites and achieving strong sell-through rates, continued ramp-up of One Bangkok, unlocking value through asset recycling into its listed REITs and/or third parties, and strengthening recurring and fee income.
As at 9.41am, shares in Frases Property are trading 1 cent lower, or 0.89% down at $1.11.
