Shopper traffic at Frasers Centrepoint Trust malls hits 79% of pre-Covid levels in Q3

THE manager of Frasers Centrepoint Trust (FCT) on Tuesday (Jul 26) reported a slight dip in retail portfolio committed occupancy for the third quarter ended Jun 30, but said shopper traffic had reached about 79 per cent of pre-pandemic levels.

Occupancy in Q3 was 97.1 per cent, down from 97.8 per cent in the previous quarter. The manager said this was largely due to pre-termination by an anchor tenant, adding that “advanced negotiations” with replacement tenants are ongoing.

However, portfolio tenants’ sales rose 23 per cent year on year and now average about 10 per cent above pre-Covid-19 levels, the manager said, with sales led by Tampines 1 and Waterway Point.

This is despite shopper traffic still being below pre-pandemic levels, even though it grew 32 per cent year on year, the manager said, adding that all malls recorded double-digit year-on-year improvement.

It added that tenants in the following categories enjoyed “stronger sales”:

• Sundry and service
• Supermarket and grocers
• Beauty and healthcare
• Leisure and entertainment
• Food and beverage

The manager said retailers remain cautious even though retail sentiment has improved with the economic reopening.

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Still, the bulk of expiring leases have been committed, with 5.3 per cent of expiring leases remaining in Q4.

Meanwhile, 69 per cent of the trust’s borrowings are on fixed interest rates to mitigate risks from volatilities, the manager said.

Every 50-basis point rise in the Singapore Swap Offer Rate (SOR) or Singapore Overnight Rate Average (SORA) is estimated to affect distribution per unit by about 0.17 cent per annum, it said.

Rising cost pressures and interest rates could pose challenges down the road, said the manager, adding that it will continue mitigating measures through hedging strategies and active cost management.

For example, the increase in portfolio electricity costs are being mitigated by in-place hedging, which would progressively expire over the next 3 quarters, it said.

FCT units rose S$0.02, or 0.87 per cent, to close at S$2.31 on Tuesday.