This is a follow up of the review of FCT's 2Q2015 financial results originally posted here .
1. Operational performance
The remaining renewals in FY2015 are mainly at Northpoint, Causeway Point (CWP) and Yew Tee point. Yew Tee point forms the bulk of the renewals.
I do not have much concerns over CWP. Personally, as someone staying in the North and then having moved to the West recently, CWP has been a very bustling mall since years ago and is always packed with people in the weekends. It is not a surprise because at Woodlands, this is the one and only shopping mall to go. Many republic polytechnic students also go there to shop or dine after their studies. The next nearest is either SunPlaza which is really crap or Lot1. Lot1 isn't that popular compared to CWP too.
As for Yew Tee point, I can relate it as a small Plaza in a suburban area fulfilling a myriad of basic needs for the people living around there. Having been there several times, I do think the shopper traffic there is relatively good.
Fraser Centrepoint has strategically locate their retail malls at the suburban areas and most are doing well, except pehaps for BedokPoint.
2. Gearing ratio
Gearing has reduced from 29.3% to 28.6% and % of borrowings on fixed rates or hedged via interest rate swaps has increased by 12%. This means that their debt and risk management is improving.
Interest rates, however, has increased.
3.Outlook
Some of the challenges include manpower shortage, competition from online sales and slowing retail sales growth. However, rising average household income and population coupled with low unemployment rate, I think one can expect a sustainable performance for FCT.
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