FCT, Frasers Property team up to acquire 50% stake in Nex - The Straits Times

SINGAPORE - Frasers Centrepoint Trust (FCT) and Frasers Property have acquired a 50 per cent stake in suburban mall Nex. The stake was bought from Mercatus, which had put it on the auction block back in June 2022.

The consideration for the acquisition was S$652.5 million, 50 per cent of the adjusted net asset value of Nex at S$1.3 billion.

FCT reported that shopper traffic and tenant sales for the first quarter of FY2023 ending Dec 31 continued to grow. Shopper traffic grew 38.3 per cent year on year (yoy) while tenant sales grew 13.4 per cent year on year for the quarter.

Shopper traffic in 2022 averaged about 80 per cent of pre-Covid levels, but tenant sales are 12 per cent above pre-Covid levels according to FCT. This represents a trend of mall visitations becoming more purposeful, said FCT.

The retail portfolio also improved committed occupancy by 1.2 per cent yoy to 98.4 per cent for Q1 FY2023. FCT expects retail rents to continue recovering in 2023, citing property consultancy CBRE. Retail rents have increased islandwide for two consecutive quarters, with suburban prime rent up 2.3 per cent yoy and Orchard Road prime rents up 1 per cent yoy.

Overall, FCT’s retail portfolio saw improved committed occupancy, barring Causeway Point and Northpoint City North Wing, which saw a 0.1 per cent decrease and no change, respectively. Changi City Point saw the biggest improvement in committed occupancy, up 4.1 per cent year over year. Hougang Mall is the only property in FCT’s portfolio to have 100 per cent occupancy.

FCT’s weighted average lease expiry as of Dec 31 2022 is 1.9 years by net leasable area and 1.8 years by gross rental income.

It is also commencing asset enhancement initiative (AEI) to Tampines 1, spending S$38 million. FCT has secured over 70 per cent pre-commitment for AEI spaces prior to works commencement, and expects to see 8 per cent return on investment from higher rents, asset valuation gains and sustainable asset performance. The works will commence from Q2 2023, with completion in Q3 2024, with the mall continuing operations. THE BUSINESS TIMES

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