Wow — lots of questions from my earlier email:
“Is it ok to not have Singapore REITs in my portfolio?”
You can check previous blog post here.
Here’s my follow up.
Earlier, I used Frasers Centrepoint Trust as an example why I still invest in Singapore REITs for my portfolios.
Since then, readers have asked me:
“On FCT, do you think the RTS link to Johore from Woodlands operating end 2026 will draw a significant number of shoppers from Singapore to Johore? …Maybe I should start buying Malaysian retail REIT. Comments?”
“On Frasers Centrepoint Trust (or other retail or industrial REITs) with regional exposure in the north, eg. Woodlands region. Do you expect there will be challenges or long-term risks from the new Singapore-JB SEZ development (similar to what happened to Hongkong with Hongkongers flocking to Shenzhen)?”
“Do you think shopping malls here will get disrupted?”
“Will Singapore-Johor SEZ pose a risk for REIT investment, especially retail? Such as more Singaporeans and tourists drive to Johor for shopping. During CNY, it is super quiet in SG even if resident going out…”
By the way, love these questions 🙂
First things first, my short answer: Nope.
You see, the Johore-Singapore Causeway is one of the busiest bridge in the world — 250,000 to 400,000 people use it on a typical day.
A more vibrant Singapore-Johore SEZ is just going to bring in new businesses, jobs, boost Singapore’s economy and drive more spending here.
I mean, even with Johore’s Iskandar years ago, heartland malls here seem to remain indomitable. Fraser’s Causeway Point is still one of the most bustling shopping malls today.
I don’t believe new developments across the Straits will truly affect our malls.
Instead, it’s going to bring in more traffic. Why?
Fraser’s Causeway Point and other shopping malls serve as “last-mile deliveries” points + entertainment for nearby town population. These malls are well located near transport nodes and residences.
In other words, what these heartland shoppers look for… convenience.
On the other hand, shoppers that travel to Johore are typically bargain hunters.
You’ll disagree with me. But these are clearly two different shopper profiles.
In its latest Dec 2024 financial results, Frasers Centrepoint Trust reported Causeway Point’s revenue grew another 10% in its latest quarter results to S$95 million. And guess what? It’s one of the very few heartland malls with a 100% occupancy rate.
I call Causeway Point’s prime location — competitive advantage. You can’t make this up.
What’s more, Woodlands is the biggest economic hub in Singapore’s North region.
And Singapore government is going to give a big boost nearby malls by adding tens of thousands new homes across Woodlands and Sembawang.
I’m not worried about Fraser’s prime assets. But I’ll tell you what I’m worried about: higher borrowing costs. As an ex-credit analyst I believe the key piece we should look for in Frasers Centrepoint Trust is whether it can manage its borrowing costs well.
If it does, I strongly believe Fraser’s malls are in good shape.
Disclaimer: I own Frasers Centrepoint Trust shares
Sometimes, investing can be simple.
Willie Keng, CFA
Founder, Dividend Titan
I agreed FCT will not be affected by the RTS link to JB. Reasons in addition to yours:
Hey RetireUncle!
I agree with your 2nd point. I remembered many analysts wrote about how e-commerce will kill off shopping malls. Today, I see people using both e-commerce AND shopping in brick and mortars. Sometimes, I don’t buy the scare tbh.
Cheers,
Willie