FRASERS Property : TQ5 0% has achieved pre-sold revenue of S$2.4 billion across Singapore, Australia, Thailand and China as at Dec 31, 2023, with “steady progress” for its residential development portfolio, it said in a Friday (Feb 2) business update.

Its net gearing ratio increased in Q1 FY2024 to 78 per cent as at Dec 31, 2023, up 2.2 percentage points end-September. But the group said it continues to focus on proactive debt management, and is well-positioned to repay and/or refinance all of its debt due in the financial year.

Frasers Property’s Singapore residential business remains resilient fuelled by a new pipeline, it said. It had secured a government land sales site in Toa Payoh, “an established and popular residential estate”, via a joint venture in which it holds a 25 per cent stake. The site is expected to yield 777 units.

Its luxury residential development Rivière was completed in FY2023; current active development projects – Parc Greenwich Executive Condominium and Sky Eden@Bedok – are almost fully sold and on track for completion.

Housing demand in Singapore is expected to remain resilient, driven mostly by homeowners, Frasers Property said. “Developers are taking a more cautious approach to land bids in view of the large housing supply released in H1 2024 by the government to cater to strong housing demand,” it added, citing URA data.

It also noted a 6.8 per cent on-year increase in Singapore’s private residential prices in Q4 of 2023, based on data from URA, though sales volume fell 13 per cent on year for the 12 months to Q4 2023, on account of macroeconomic headwinds, the higher interest rate environment, and government cooling measures. (*see amendment note)

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In Singapore, it sold eight units in Q1, with unrecognised revenue amounting to S$0.9 billion.

Frasers Property also highlighted strong sales in Australia for Q1 on the back of robust demand. It sold 286 units in Q1 there and noted unrecognised revenue of S$0.8 billion.

In Thailand, it is focusing on managing inventory and strategically diversifying housing segments, amid a challenging business environment. Some 320 units were sold, while unrecognised revenue was S$0.03 billion.

As for China, the group has replenished its residential portfolio with investments in Shanghai and completed two joint-venture residential development projects in Q1 FY2024. The number of units sold in China stood at 640, while unrecognised revenue was S$0.7 billion.

Some 21 residential development projects totalling about 5,500 units across markets are scheduled for completion over the rest of FY2024.

Frasers Property’s net gearing ratio was 78 per cent as at Dec 31, up from 75.8 per cent as at Sep 30, which it attributed to capital expenditure, partially offset by its divestment of its Changi City Point stake.

It said its high proportion of fixed-rate debt mitigates the effects of high interest rates, “though cost of debt is likely to remain elevated in 2024 due to higher-for-longer interest rate environment”.

The group also noted its continued efforts to extend debt maturities with focus on green and/or sustainable financing.

Net debt rose 2.4 per cent to S$14.1 billion as at Dec 31, compared to S$13.8 billion as at end-September.

Looking ahead, Frasers Property said it remains focused on its priorities of achieving better risk-adjusted returns, visibility of earnings and cash flows.

The counter closed 1.2 per cent or S$0.01 higher at S$0.875 on Friday, before the business update.

Clarification note: Frasers Property has clarified that information provided on housing and residential prices in Singapore was obtained from the URA website. The article has been amended to reflect this.