Frasers Property H1 profit falls 37.8% to S$88.4 million on impairment loss

[SINGAPORE] Frasers Property posted a 37.8 per cent drop in net profit to S$88.4 million for its first half ended Mar 31, from S$142.2 million for the previous corresponding period.

This was mainly due to a S$38.2 million impairment on an investment in Thailand, the real estate group said on Friday (May 8).

Excluding a one-off reversal of tax provisions in the year-ago period, net profit would have risen 77 per cent year on year.

Earnings per share stood at S$0.02 for the half-year, down from S$0.035 the previous year.

Revenue for the period fell 5.2 per cent to S$1.51 billion, from S$1.59 billion previously.

This was largely due to the absence of contributions from its Sky Eden@Bedok residential project, which obtained its temporary occupation permit in September, the group said.

The revenue decline was partially offset by higher contributions from its Singapore retail portfolio, following the acquisition of a full interest in Northpoint City South Wing in May 2025.

No interim dividend was declared for the half-year, unchanged from the year before. The board of directors have also decided against declaring interim dividends in view of the “uncertain business environment”.

Panote Sirivadhanabhakdi, group CEO of Frasers Property, said: “We remain firmly on strategy, with continued focus on delivery amid the uncertain operating environment.”

He added that the company has made progress on three fronts: growing the development pipeline, active asset management sustaining recurring income quality, and capital recycling across markets.

In H1 FY2026, the group announced a total of S$424 million in capital recycling, primarily driven by S$245 million in capital partnerships and S$161 million from sales to third parties, alongside S$18 million through its listed real estate investment trusts (Reits).

Since FY2014, Frasers Property has recycled S$15 billion in capital to optimise capital productivity, comprising S$9.6 billion via the group’s listed Reits, S$2.5 billion through capital partnerships and S$2.9 billion from sales of non-Reit assets to third parties.

The group completed two divestments in April: its first built-to-rent development Brunswick & Co in Brisbane, and Burwood Brickworks Shopping Centre in Melbourne.

In Singapore, the group clinched the tender for the en bloc sale of The Centrepoint’s rear plot, which opens the door to rejuvenation opportunities in the area.

When asked about redevelopment plans at the earnings briefing on Friday, Panote said that the group is still studying various options to rejuvenate The Centrepoint, although operations at the Orchard Road mall remain unchanged for now.

Under its capital recycling initiative, the group sold Chineham Park, a business park in Basingstoke in the UK, in November 2025 for a total consideration of about £89.7 million (S$154 million).

The group will selectively grow its development exposure to capture better risk-adjusted returns, while maintaining a predominantly recurring-income-based earnings profile to support cash flow and risk management.

Partnerships, such as engaging joint venture partners for acquisitions, remain key to its residential development strategy.

Fraser Property said that the residential development pipeline “provided strong earnings visibility, with unrecognised revenue of S$1.1 billion as at Mar 31”.

On the Singapore residential market, Panote said the group remains disciplined on land pricing. Cooling measures, while a constraint for developers, help protect the market from a real estate bubble, he added.

“We still believe prices can continue to grow in a measured way, and we see Singapore as a well-regulated market that allows us to operate well.”

While the latest executive condominium-related measures could affect buyer behaviour, group chief financial officer Loo Choo Leong said it was too early to assess their full impact.

On Friday morning, the government announced that the minimum occupation period for ECs will be extended from five to 10 years before owners can sell their units. The deferred payment scheme for new EC projects will also be scrapped.

The required quota of new units reserved for first-time buyers will be raised from 70 to 90 per cent, and the priority period for first-timers extended significantly from one month to two years.

“We don’t have any EC stock at this point in time, but we will monitor the broader market sentiment and study the impact of the measures,” said Loo. He added that there remains a pricing gap between EC sites and government land sale sites.

Recurring income accounted for 76 per cent of the group’s profit before interest, fair-value change, tax and exceptional items in H1 FY2026, supported by portfolio optimisation and active asset management.

While global growth is expected to weaken due to tensions in the Middle East, the group will continue to mitigate risks from high interest rates, inflation and foreign currency volatility.

Net asset value per share rose to S$2.40 as at Mar 31, from S$2.37 as at end-September 2025. The group’s net debt to property assets ratio stood at 45.5 per cent, while net debt to total equity ratio was 94.2 per cent as at end-March.

The higher net debt to total equity ratio was mainly due to the redemption of perpetual securities in January this year.

About 69.4 per cent of the group’s total debt was on fixed rates or hedge, with a weighted average debt maturity of 2.5 years and blended cost of debt of 3.8 per cent per annum.

Shares of Frasers Property fell 2.6 per cent or S$0.03 to close at S$1.11 on Friday.