When asked about redevelopment, Sirivadhanabhakdi says: “We need to look at the timing carefully to reap the full value of our assets. We are not going to be rushed, especially in Singapore, where the market is still quite strong and where we understand supply-demand metrics quite well, to be able to make a judgment over when to unlock value.”
He reiterated FPL’s strategy, saying, “We continue to anchor our strategy on our three pillars of creating value, sustaining value and unlocking value.”
Analysts have honed in on the unlocking value aspect and may be preparing to revalue FPL. Vijay Natarajan, vice-president and head of real estate and REITs, at RHB Bank, says: “We see Frasers Property’s redevelopment potential, especially in Singapore, as a key theme/catalyst moving into FY2026. In our view, some of the Singapore assets that are ripe for redevelopment and value unlocking include The Centrepoint, Yishun 10 and Valley Point. In addition, the interest rate tailwinds across its key markets (Singapore, Europe and Australia) position it well for active capital rebalancing by divesting mature assets into REITs and reinvesting the proceeds for development opportunities.”
Fraser Suites, a 255-room serviced residence previously owned by FHT, has reverted to FPL and is part of the mixed development, Valley Point. In 2014, during FHT’s initial public offering, Fraser Suites was divested to FHT on a leasehold basis.
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In addition, Valley Point comprises a 20-storey office tower, a two-storey shopping centre and Fraser Suites. The office tower and shopping centre were last valued at $349 million a year ago. More recently, Fraser Suites was valued at $300 million as at March 31. Market observers believe that the Valley Point site qualifies for the URA’s Strategic Development Incentive (SDI) Scheme.
As at Sept 30, FPL’s FY2025 year-end, The Centrepoint was valued at $575 million, down $25 million y-o-y. A market observer suggests that tenancies at the mall have declined, with the landlord only renewing leases on shorter terms.
“For The Centrepoint, it’s business as usual. We continue to look at new concepts, upgrade the mall, refresh the tenant mix and bring in new tenants. At the same time, we are aware of URA’s master plan for the area with SDI, and we continue to explore how we can combine our sites to create an even better development in the future,” says Soon Su Lin, CEO, Singapore, at FPL.
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“Valley Point is currently still business as usual for both the retail and the commercial components. We have been looking at this site even before the [FHT] privatisation. We always review all options, including potential and future highest and best uses of the site. We’re still reviewing it,” says Soon.
FPL acquired Yishun 10, a property in Yishun comprising strata shops, for $34.5 million from Frasers Centrepoint Trust (FCT) and Golden Village Cineplex for $48 million. The property is located at 51 Yishun Central 1.
“For Yishun 10, we bought over the strata units from Frasers Centrepoint Trust, as well as the lease buyback from Golden Village. We are reviewing the redevelopment potential of this site, which is next to our North Point City. We believe there is good potential to develop something both residential and possibly commercial to enhance the quality of the area,” Soon adds.
“We are taking deliberate steps to rebalance our portfolio and we have been able to increase our development exposure to capture higher returns while also refreshing our recurring income assets to maintain a strong earning base and align with longer-term structural trends,” says Sirivadhanabhakdi.
Focusing on development
To recap, when Sirivadhanabhaki discusses creating value, he is referring to increasing development exposure. New developments can be residential, where they are built and sold, or “built-to-core” where developments, especially in the industrial and logistics (I&L) sector, are developed and kept on the balance sheet to stabilise before eventually being divested to Frasers Logistics and Commercial Trust (FLCT) or a third party.
In prepared remarks, Sirivadhanabhakdi said FPL will “gradually increase our group’s development exposure in both residential and selected non-residential asset classes, and explore opportunities across greenfield sites, redevelopment and asset repurposing to generate the best risk-adjusted returns”.
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“Our development strategy is anchored in a disciplined capital allocation and we have deep market insight to achieve the return that we are looking for in residential development. We continue to focus on well-located and thoughtfully designed projects that cater to a changing lifestyle preference,” Sirivadhanabhakdi says.
In June, FPL, along with Sekisui House and CSC Land, won the tender for a government land sales (GLS) site on Dunearn Road for $491.45 million. The price for the 145,173 sq ft site translates into $1,410 psf per plot ratio.
This year, FPL launched The Orie and The Robertson Opus in January and July, respectively. The Robertson Opus is a redevelopment of Robertson Walk, which sits on 999-year leasehold property. The Orie in Toa Payoh, a joint venture with City Developments and Sekisui House, achieved strong take-up with 93% of units sold.
A key element of the group’s strategy is its deliberate shift towards a partnership model for residential developments, as evidenced by The Orie and the Dunearn Road GLS site. In addition, FPL held a 14% in a joint venture that acquired a residential site in Jing’an, Shanghai, in October.
In the non-residential space, its build-to-core approach in I&L delivered approximately 691,000 sq m of projects in FY2025, with a further 758,000 sq m under development. In previous years, development and completions in Australia and Europe were the largest contributors to this segment. In FY2025, Vietnam’s I&L developments increased significantly, likely due to sustained demand from supply chain reconfiguration and e-commerce growth.
On the sustaining value part of FPL’s strategy, more than $1 billion of PBIT or 86%, was from recurring income.
Around 1.3 million sq m of income-generating assets in FY2024 and FY2025 in suburban retail and I&L were added to FPL. At the same time, the group had some significant divestments. For instance, 50% of Northpoint City South Wing was divested to FCT.
The group announced a fourth residential joint venture with Mitsui Fudosan in Australia for Mambourin Green in 4QFY2025. On the industrial and logistics property front, the group announced a capital-efficient structure for 17 assets in Australia through a capital partnership priced at $1 billion. Separately, Fraser Residence Sudirman, Jakarta, was divested in 3QFY2025 for net fair value gains of $46.3 million.
Results and capital management
In FY2025 ended Sept 30, FPL reported a 17.8% y-o-y increase to $243.1 million in profit after interest, fair value change, tax and exceptional items, and non-controlling interests. However, profit before interest, fair value change, tax and exceptional items and non-controlling interests (PBIT) fell by 12.3% to $1.186 billion. Revenue fell by 19.2% y-o-y to $3.404 billion.
The group’s FY2025 earnings benefitted from a net fair value change recorded from build-to-core development completions and divestments, along with the reversal of tax provisions. However, PBIT declined due to lower residential contributions across most markets, primarily due to the timing of project settlements and impairments on certain projects, which was partly offset by stronger I&L and retail performance. Excluding the one-off reversal of tax provisions, attributable profit was 50% lower y-o-y, reflecting lower PBIT and higher net interest expense.
The net asset value per share as at Sept 30 was lower at $2.37 compared to $2.45 a year ago. The strengthening of the Singapore dollar, particularly against the Australian dollar, resulted in unrealised net foreign currency translation reserve loss.
The group’s net debt to property assets ratio as at Sept 30 stood at 43.7% compared to 42.1% a year ago, while the net debt to total equity ratio rose to 89.2% compared to 83.4% a year ago. The higher net debt was mainly due to funding for the privatisation of FHT, acquisitions by the group’s consolidated REITs and capital expenditure. Approximately 75% of the group’s total debt was either on fixed rates or hedged, with a weighted average debt maturity of 2.5 years and blended cost of debt of 4% per annum.
Loo Choo Leong, group CFO at FPL, says: “Reducing our gearing continues to be a priority. However, it’s important to recognise that real estate is a long-term investment. Consequently, the effects of our efforts will take time to be reflected in our numbers, but strategically, we are well-positioned.”
“Our recurring income provides stability against the inherent lumpiness of our residential development. We have unrecognised revenue from residential sales, which stood at $1.4 billion in September, with over 4,100 contracts on hand,” Loo adds.
The group’s average cost of debt is likely to fall in the next financial year. “We have a strong hedging policy for interest rates that has insulated us during the times when interest rates were rising since 2022. When interest rates start to decline, it will take time for the effects of lower interest rates to flow through, as we must continue to honour the interest rate swaps that we entered into, and as we renew or refinance borrowings that were previously at fixed rates. Over the cycle, we will see interest rates coming down,” Loo explains. “We have sufficient resources and a very structured cash flow capital funding plan to support our business and optimise shareholder value,” he adds.
That led analysts to ask if FPL could benefit from the Monetary Authority of Singapore’s equity market development programme (EQDP) to increase investor interest in Singapore’s equity market.
“The EQDP has certain criteria as well as allocations. Not all the $5 billion has been allocated yet, but the market has moved generally and benefited almost all sectors on the Singapore Exchange. We will learn more next year when the allocations begin to arrive and how these will impact FPL. It’s not a position that we can comment on at this point in time,” Loo replies.
In a results update, DBS Group Research says capital partnerships will be a key strategic pillar to mitigate project-level risks and facilitate capital commitment, given a gearing ratio of 89%. “Continued value-unlocking of stabilised assets to its listed S-REITs will help keep overall financial leverage at stable levels,” it adds. Its price target for FPL is $1.26, pegged to a 55% discount to its revalued NAV of $2.80.
