Fraser Property’s (FPL) net profit in FY2024 ended Sept 30, was bolstered by higher contributions from residential properties in Australia and China despite higher interest costs.
The developer’s attributable net profit of $206.3 million rose by 19.2% y-o-y, on the back of a 6.8% y-o-y rise in revenues and a 3% y-o-y rise in pbit. Operationally, the group’s recurring income base from logistics and industrial properties in Europe and Australia and Singapore commercial properties continued their steady returns.
Despite high interest rates and unrealised fair value losses in the UK and Australia, FPL reported a net fair value gain of $130.6 million, supported by net fair value gains in the Singapore properties. The group recycled $700 million in assets and proposed a 4.5 cents per share dividend unchanged y-o-y, representing a payout of 81%.
“No company can be fully insulated from the overall market business environmental challenge, but we maintain our focus on sustainable value creation, to continue delivering value to our stakeholders,” says Panote Sirivadhanabhakdi at FPL’s results briefing on Nov 13.
In FY2024, 74% of pbit was from investment properties, which comprised 88% of the group’s assets. By residential contribution, unrecognised revenue of $1.1 billion as at end-FY2024 was below the group’s five-year average of $1.9 billion. Residential development assets currently form about 10% of total property assets.
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The $700 million recycled through FPL’s REITs includes divesting $188.9 million of logistics properties to Frasers Logistics & Commercial Trust BUOU and a 24.5% stake in Nex to Frasers Centrepoint Trust J69U for $532.1 million.
“Since the listing in FY2014, we have recycled approximately $9 billion of assets via our REITs,” Sirivadhanabhakdi says, pointing out that FPL has 37 investment property and development projects held with its capital partners.
On Nov 18, FPL announced that it is forming a 51:49 joint venture with Sekisui House to redevelop the 999-year leasehold site of Robertson Walk and Fraser Place Robertson Walk into a waterfront residential and lifestyle hub. Set to launch next year and be completed by the end of 2028, the new mixed-use development will feature a luxury 348-unit residential enclave with a mix of dining and entertainment options. The site will yield a gross floor area of 30,664 sq m.
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In an update, DBS Group Research says FPL’s $1.1 billion in unrecognised revenues (or 3,800 contracts on hand) offer income visibility. “The group will be looking to capitalise on the recent momentum in the Singapore residential sales market to launch 777-unit The Orie (FPL has a 25% stake) in 1H2025, with the group’s Logistics & Industrial division having 12 more assets or 352,000 sq m under development, most of which will complete sometime in the coming financial year,” DBS says.
DBS adds that FPL’s ability to pivot to development income is likely to be supported by its stable recurring income. “In the coming years, we see the group working with capital partners to participate in land tenders to grow its development landbank, underpinning higher returns in the years to come,” DBS says.
FPL has added to its landbank with development sites totalling 585,000 sq m in Australia and the Netherlands, including 50:50 JV in Melbourne with ESR Australia in 2QFY2024 for industrial development, and a separate joint venture with Mitsui Fudosan in Queensland for a residential development.
In terms of asset allocation of the group’s $34.6 billion, 32% is in Singapore, 29% in Australia, 19% in the EU and UK, 14% in Thailand, 3% in China and the rest from other parts of Asia. For pbit, 37% comes from Singapore, 23% from Australia, 15% from Europe and 9% from Thailand, with other geographies making up the remaining portion.
DBS calculates that FPL’s revalued NAV is worth $2.85 compared to its NAV of $2.45, and a fair valuation is at a 60% discount to RNAV, or $1.14 per share.
On Sept 22, following a share swap with Thai Beverage Y92 , which valued each FPL share at $1.89, TCC Assets owned 86.89% of FPL.
Since the start of the year to Nov 22, FPL is up 2.22%, but it has gained almost 18% from its low on Aug 21.
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