Frasers Centrepoint Trust And The RTS Fear: Why I’m Still Buying – Beragampengetahuan

I haven’t published anything in a short while. That’s because I was busy ringing in the new year at a resort overseas, followed by a 4-week holiday in Thailand, and then Chinese New Year right after getting back. Rested, recharged, and feeling pretty relaxed. And about Frasers Centrepoint Trust (FCT).

The Johor Bahru-Singapore Rapid Transit System opens late 2026 early 2027. Five-minute ride, co-located immigration on both ends. The narrative is straightforward:

• RTS looks and feels like a typical MRT train
• 1,000 max capacity per train (4-car) makes cross-border shopping easier
• Northern Singapore malls stand to lose shoppers to Johor Bahru (JB)
• FCT takes a hit (?)

It’s a neat story that’s easy to share and easy to worry about. But is it TOO neat?

What I find encouraging is that FCT management isn’t avoiding the elephant in the room. The 2026 AGM devoted significant attention to RTS, and CEO Richard Ng has been openly addressing it in media interviews and investor briefings. When management confronts a headwind openly rather than glossing over it, that’s usually a good sign. It tells me they’ve done the homework and have a plan.

I hold FCT as one of my largest individual REIT positions, plus Syfe REIT+ for passive diversified exposure. Here’s why I’m still holding and slowly adding over the next few years.

Quick Recap: My Suburban Retail Thesis

I’ve written about this in detail before (Retail REITs – An Uniquely Singaporean Story).

The short version: Singapore malls aren’t primarily shopping destinations anymore. They’re also extensions of daily life – haircuts, dental, tuition, TCM, groceries, food courts, nails, massage. Services that need physical presence and are more resilient to disruption than goods. It’s hot outside, our homes are small, and an aging but active population with flexible work arrangements needs comfortable places to get stuff done during the day. That thesis still holds. I’m betting on the trend via FCT and CapitaLand Integrated Commercial Trust, not trying to pick which specific operator will “win.”

The RTS Concern vs. The Actual Data

Let me be clear: I agree that the market concern is valid. RTS will make JB shopping easier. Co-located immigration means you clear both countries in one go. This is a real development that will change cross-border flows. Instead of taking KTM trains which I am doing now, I will definitely look forward to using the RTS.

So yes, some retail spending will leak to JB. The question is how much.

The real impact comes from people who are currently not going to JB, but would decide to do so, because of the increase in convenience and decrease in travel time brought about by the RTS. And don’t forget, the RTS brings Malaysians into Singapore too.

FCT management engaged CBRE Research to conduct independent market studies and shopper surveys. The finding: retail sales leakage expected to rise from around 4% currently (I didn’t even know this) to about 5% by 2032. That’s 1 percentage point over 6 years. FCT commissioned this study, so take it with that context. But even if the actual number turns out somewhat higher, the question is whether the offsetting forces are strong enough.

At the 2026 AGM, CEO Richard Ng addressed RTS directly. He acknowledged some shifts in shopper traffic are expected, particularly for malls near the border, but said FCT does not anticipate significant negative impact. Interestingly, management studied cross-border rail developments in other regions, including Hong Kong and Shenzhen, to prepare for possible shifts. That kind of homework gives me some confidence they’re not just hoping for the best.

The offsetting forces are significant. Northern Singapore is expecting a 25-27% population surge. More than 50,000 residential units coming in the next 10-15 years. Woodlands Regional Centre alone is creating about 100,000 jobs. The North-South Corridor will connect Woodlands, Sembawang and Yishun directly to the city centre, expanding the catchment for FCT’s northern malls. People from central Singapore could actually find it easier to visit Northpoint City or Causeway Point.

The RTS also won’t hit full capacity from day one. There’ll be a gradual ramp-up with lower volume and frequency at the start, scaling up over months and quarters. This gives the population growth time to build real momentum. New residents moving into those 50,000+ homes need neighborhood shopping options before they even think about developing JB shopping habits.

When I put all this together, I see a 1% point leakage increase being met by a 25-27% population surge, with a buffer period where growth compounds before RTS reaches full scale. Even if per capita spending stays flat, a 25% larger catchment means the total retail pie grows significantly. A 1% point leakage from a much bigger pie is very different from 1% point leakage from today’s pie. The math doesn’t support panic.

FCT’s Portfolio Strength Beyond the North

Causeway Point gets all the RTS attention because it’s literally 2 stops from the future JB terminal. But here’s what the fear-mongering misses: Causeway Point is currently 25% of FCT’s net property income today, down from 47-48% back in 2019. This didn’t happen by chance.

FCT spent the past few years actively reconstituting the portfolio. Close to $6 billion in acquisitions (including the $1.17 billion Northpoint City South Wing in 2025) and about $850 million in divestments (most recently Yishun 10 Retail Podium in September 2025). The trust now owns or co-owns 4 of the top 10 largest prime suburban malls in Singapore, serving over 3 million residents within a 3km catchment.

The geographic spread tells the story:

• Northeast: NEX in Serangoon, Waterway Point in Punggol
• East: Tampines 1 and White Sands
• Central: Tiong Bahru Plaza
• North: Northpoint City in Yishun, which will actually benefit from the North-South Corridor pulling shoppers from central Singapore more easily.

FCT is on solid footing heading into the RTS era. The most recent 1Q FY2026 update shows 99.9% committed occupancy after successfully backfilling cinema spaces at Causeway Point and Century Square. Cost of debt is trending down, reaching 3.5% in the most recent quarter versus the FY2025 full-year average of 3.8%. FY2025 revenue grew 10.8% to $389.6 million, NPI rose 9.7% to $278 million, and DPU of 12.113 cents now exceeds pre-COVID FY2019 levels. Rental reversion came in at 7.8%, average occupancy cost at 16.1% (which gives room for future rental growth), shopper traffic grew 1.6% and tenant sales rose 3.7% year-on-year. They brought in 76 new brands across the malls during the year. At current prices around $2.26, FCT yields approximately 5.35% based on FY2025 DPU of 12.113 cents.

Even if Causeway Point takes a hit from RTS, FCT today is a very different REIT from the one that was nearly half-dependent on a single northern mall.

Why Singaporean Behavior Limits Cross-Border Impact

Here’s something I keep coming back to. When I last checked, I have spent $21,000 on GrabFood and Foodpanda over the years. Twenty-one thousand dollars. On marked-up food delivery pricing. Because I was too lazy to walk downstairs.

Food delivery services showed me something important about Singaporean behavior: convenience beats savings for many people, a lot of the time. RTS doesn’t remove the friction of cross-border shopping. It reduces it. There’s a difference.

Cross-border shopping has real friction, and you will feel this deeply if you have done it before. Passport. Immigration queues (even with co-located clearance, queues will form during peak hours). Travel time. Bringing young kids across? Bringing elderly parents who find it tiring? That’s a very different proposition from taking the MRT 2 stops to your neighborhood mall where everything is familiar and hassle-free.

Then there’s the cost. A bus ride across is less than SGD$2 if memory serves me right. The KTM train is SGD$5 and the upcoming RTS is expected to be SGD$5-7 at launch. That’s at least SGD$10 round-trip per person before you’ve even bought anything. For a family of four, you’re spending $40 just on transport. The savings need to be meaningful to justify that.

I don’t think I’ve mentioned this before, but I visit R&F Princess Cove in JB a few times a year just to relax. There is a particular sea-view condo unit that I always return to, and it costs only $65 per night. My wife and I find it to be a nice place to unwind to a light breeze, the smell of sea water and mouthwatering food delivered right to our doorstep. So I have first-hand JB experience, not just theorizing from Singapore.

Based on my visits, JB isn’t actually that much cheaper for certain F&B options and cafes anymore. For us, the novelty tends to wear off after a few trips. Carrying groceries back across the border? Completely impractical for regular shopping via potentially packed public transportation. JB City Square already has a Singapore-proximity markup without offering me too much that’s meaningfully different from malls in Singapore.

FCT’s own survey findings back this up. While JB remains attractive for value-seeking shoppers, Singapore’s suburban malls hold a competitive advantage in retail variety, quality, and the overall shopping environment (safety, cleanliness, convenience). And here’s a point that doesn’t get enough attention: as more Singaporeans shop in JB, prices there will rise even more. JB locals are already complaining about Singapore-level pricing in downtown areas. The arbitrage naturally erodes over time because that’s how the market works, right?

I think JB will continue to serve occasional destination trips. Weekend outings, big hauls for specific items, dining experiences. But not daily or weekly convenience needs. To me, the friction is just too high for extremely routine trips but that’s purely based on my personal tolerance towards the hassle of travelling.

FCT management seems to get this too. They’re gradually bringing popular Malaysian F&B brands like Oriental Kopi (NEX) and Zus Coffee (Northpoint City) into their Singapore malls. I have been having so many meals from Oriental Kopi in Singapore that it no longer piques my interest when I see one across the border. If you want the appealing Malaysian experience, some may not want to cross the border when it’s a few MRT stops away with zero immigration hassle?

FCT’s AEI Pipeline: Not Sitting Around Waiting

With limited acquisition opportunities in Singapore (there just isn’t much quality suburban retail left to buy), AEIs are the main growth driver. FCT has a track record here and a clear pipeline.

Tampines 1 – Wrapped up in September 2024, $38 million spent, 8% ROI achieved, 8,000 sq ft of net lettable area added. Clean execution.

Hougang Mall – Started in 2025, phase 1 completed. Aiming for full completion by September 2026, $51 million, targeting 7% ROI, already 80%+ leasing pre-committed. The timing matters here because CICT won the bid for the site next to Hougang MRT and will develop a large mixed-use development right next door. FCT moved first to strengthen their positioning before that competition arrives. The upcoming Cross Island Line will intersect the North East Line (targeted 2030) at Hougang MRT station, which means the pie will effectively become bigger to accommodate both malls.

NEX – Upcoming. Spending about $90 million total (FCT’s share $45 million via the joint venture). Taking back Isetan’s 44,000 sq ft after the tenant exited, plus converting 62,000 sq ft of carpark into retail and office space. More productive use of the area via the usual – mini anchors, more brands, F&B offerings, enhance enrichment/education, fill gaps.

Causeway Point – Major AEI planned, though full details haven’t been announced yet. The direction is clear from management: reposition it as a regional mall. Reduce categories vulnerable to cross-border competition (cheap F&B, mass market fashion). Increase resilient sectors like education, enrichment, essential services, and international fashion that prices similarly across the border anyway.

The AEI timing is deliberately staggered (one after another) so distributions don’t take a hit all at once. Asset management fees get paid in units during disruption periods, which protects cash distributions to unitholders.

I like that management isn’t sitting around hoping RTS won’t hurt. They’re actively reshaping the assets. I simply think of AEIs as minor acquisitions.

My Take: Holding and Slowly Adding

Market concern about RTS is valid and I’m not dismissing it. RTS will have some impact on northern retail spending. The key is, how much?

But the fear-mongering oversimplifies what’s actually a more nuanced picture. A 1% point leakage increase over 6 years, met by 25-27% population growth. Falling borrowing costs, with SORA close to 1% meaning FCT can refinance old debts cheaper and cost of debt already down to 3.5% in the most recent quarter. A diversified portfolio where Causeway Point is only 25% of NPI. Proactive AEI execution targeting 7-8% ROIs. Management actively repositioning tenant mix. DPU has grown at a 3.8% CAGR from FY2019 to FY2025 and now exceeds pre-COVID levels. Decide for yourself if that looks like a REIT in trouble.

For full transparency: I hold 32,000 units of FCT and 22,000 units of CICT. Between the two, I’ve got comprehensive coverage of Singapore’s suburban retail story and lots of skin in the game. Regardless of which one does better, I plan to benefit from the trend.

I’m taking a longer-term view. My net cost after collecting dividends is under $2, which gives me patience. Even at current prices, I’m planning to keep adding over time.

Could I be wrong? Of course. The leakage could be worse than 5%. Population growth could slow. Interest rates could reverse. These are real risks and I’m not pretending they don’t exist. But even if Causeway Point takes a meaningful hit, it’s now 25% of portfolio NPI, not 47%. The damage is contained in a way it simply wouldn’t have been back in 2019.

Nevertheless, by looking at the actual data rather than the headlines, I’m feeling pretty relaxed about this position. Still tanned, still rested, still adding.

Kevin started beragampengetahuan after hitting rock bottom at negative $25,755 net worth. Today, his investments and side hustles cover his expenses and travels. He shares what actually works (and what doesn’t) for Singaporeans building wealth. Learn more about Kevin here.