We are pleased to present Frasers Centrepoint Trust and its subsidiaries' (“FCT” and the “FCT Group”) Annual Report and Sustainability Report for the financial year ended 30 September 2023 (“FY2023”).

Over the past year, global investors, corporates, and individuals have endured an emotional rollercoaster ride, with markets oscillating between optimism for a cut in interest rates and the disillusionment over successive rate increases by the U.S. Federal Reserve (the “Fed”). Based on the “higher for longer” narrative from the Fed, interest rates are expected to remain elevated in the near to mid-term and this will continue to exert pressure on financing costs and the prices of yield-sensitive assets like the REITs.

Despite the challenging macroeconomic environment where the cost of capital has surged and access to equity market became prohibitive, the Manager remained steadfast in its objective to deliver steady distribution returns to FCT and its Unitholders.

Proactive Portfolio Re-constitution To Reinforce Market Position

During the year, FCT completed two acquisitions and made announcements for one asset enhancement initiative (“AEI”) and two divestments. These transactions and AEI are strategic steps that enable FCT to recycle its capital effectively, bolster its financial position and portfolio strength while reinforcing its leading market position in the Singapore suburban retail sector.

Acquisitions

The two acquisitions were the joint acquisition of a 50.00% interest in one of Singapore's largest suburban malls - NEX - together with FCT's sponsor Frasers Property Limited (“Frasers Property”), of which FCT's effective interest is 25.50%; and the acquisition of an additional 10.00% interest in Waterway Point that brought FCT's total interest in the mall to 50.00%. The $529.8 million acquisition of the 25.50% effective interest in NEX and the $131.3 million acquisition of the additional 10.00% interest in Waterway Point are strategic moves to expand FCT's presence in Singapore's suburban retail market and to strengthen the quality of its portfolio. With the addition of NEX, FCT now owns or jointly-own four of the ten largest prime suburban malls¹ in Singapore which are NEX, Northpoint City, Causeway Point and Waterway Point.

AEI

FCT announced the commencement of the $38.2 million AEI at Tampines 1 in the third quarter of FY2023. The AEI aims to create a refreshed retail experience with the introduction of new retail brands and services, improve asset yield and unlock value through space re-configuration.

The projected return on investment (“ROI”) of the AEI is approximately 8% from higher rent income and savings from sustainable features that reduce energy consumption and carbon emission. The new AEI space attracted strong leasing interest with over 94% in pre- commitment. The AEI is progressing on schedule to complete in the fourth quarter of FY2024, ahead of the year-end festive season.

Divestments

In the final quarter of FY2023, FCT announced the divestment of Changi City Point for $338.0 million and the divestment of its interests in Hektar REIT for $39.3 million.

Both divestments were part of the Manager's strategic portfolio review to strengthen FCT's portfolio resilience and are in line with the Manager's long term objective of creating value for FCT Unitholders. The estimated net gain and capital gain from the divestment of Changi City Point are approximately $10.9 million and $20 million, respectively.

Growing from strength to strength

Since FY2018, FCT has undergone significant portfolio re-constitution that enabled its portfolio to grow 2.3 times in AUM from approximately $2.8 billion in FY2018 to $6.9 billion, through a series of acquisitions of interests in the AsiaRetail Fund portfolio and in Waterway Point; the divestments of three non-core assets (Bedok Point, Anchorpoint and YewTee Point); the acquisition of the interest in NEX and a further interest in Waterway Point. These transactions have further strengthened the resilience of FCT's portfolio while sharpening its focus on the Singapore suburban retail market.

Strong FY2023 Results

FCT delivered a strong set of results and stable distribution returns for its Unitholders in FY2023. Gross revenue in FY2023 was $369.7 million and NPI was $265.6 million, up 3.6% and 2.7% year-on-year, respectively, and new-highs for FCT. The growth drivers were higher rental income underpinned by higher average portfolio occupancy rate, higher rentals achieved for new and renewed leases during the year, step-up rents from current leases and higher contribution from atrium leasing. The growth in NPI was offset by higher operating expenses due mainly to increased maintenance and utility expenses and a rise in staff costs.

Stable DPU

Distribution to Unitholders in FY2023 was $207.7 million, down by 0.2%, due mainly to higher interest expense that increased 73.0% year-on-year to $81.0 million from $46.8 million in FY2022. The increase in interest expense was attributed to higher interest rates as well as additional loans drawn down to finance the acquisitions of the interests in NEX and Waterway Point. This translates to a DPU of 12.150 cents for FY2023 which is marginally lower compared to 12.227 cents in FY2022.

Healthy financial position; poised to strengthen

FCT maintains a healthy financial position. Its aggregate leverage as at 30 September 2023 stood at 39.3%. This is expected to decline to 36.1% on a pro forma basis, after the proceeds from the divestments of Changi City Point and the interest in Hektar REIT are used to pare down debts

The aggregate appraised value of FCT's retail portfolio remained relatively stable with gains mainly from NEX and Causeway Point and smaller gains from five other malls which are Tampines 1, Northpoint City North Wing, Waterway Point, Tiong Bahru Plaza and Hougang Mall. The capitalisation rates used by the independent valuers remained unchanged from last year.

All-round improvement in operational metrics

On the operating front, the portfolio delivered a robust operating performance with higher committed occupancy, better rental reversions and sustained growth in tenants' sales. The committed occupancy of the retail portfolio was up 2.2%-points year-on-year to 99.7% as at 30 September 2023. The average portfolio rental reversion came in at 4.7% (on an average-to-average basis), higher than the 4.2% in FY2022. Portfolio tenants' sales improved 7.3% year-on- year and shopper traffic was up 24.7% year-on-year. The improved tenants' sales helped improve the average occupancy cost to 15.6% from 16.2% in FY2022, providing headroom for rental growth.

Making Progress On The Sustainability Journey and ESG

Sustainability is a key focus in FCT's strategy. The Manager works closely with Frasers Property towards achieving the Group's goal of net- zero carbon by 2050.

For the third consecutive year, FCT achieved a 5-Star rating in the 2023 GRESB Real Estate Assessment.

We believe this is a meaningful benchmark that enables our stakeholders to compare FCT's performance with its global real estate peers in the same sector. FCT has also received an “A” rating from the MSCI ESG Ratings in September 2023, for the second consecutive year.

FCT is leveraging on innovation and technology to improve efficiency in its operations and reduce costs. The initiatives include food waste management, data analytics for lifts and the water valve efficiency initiative. The projected savings of these initiatives when fully implemented is approximately $1 million per annum.

All of FCT's 10 retail malls and one office property have achieved BCA Green Mark certifications with five of them rated Platinum, three rated GoldPlus and three rated Gold on the new stricter Green Mark 2021 framework (GM: 2021). On green financing, the proportion of green loan in FCT's total borrowing stood at 55.6% as at 30 September 2023, up from 31.9% last year. The proportion of green loans is expected to increase as we refinance non-green loans with green loans going forward.

Other initiatives include rolling out charging points for electric vehicles in FCT malls to support green mobility and the installation of solar power panels at FCT malls to provide green energy.

FCT is also expanding its efforts in community engagement. During the year, various initiatives such as the Inclusion Champion Program and Paint it Forward for the children were implemented in FCT malls. These initiatives aim to build stronger inclusiveness and a sense of belonging with FCT's stakeholders in the community.

We invite you to read the details in the Sustainability Report which is an integral part of this Annual Report.

Positive On Outlook Of The Suburban Retail Sector In Singapore

The Manager expects interest rate movements and rising operating expenses to remain the key factors affecting FCT's performance.

Barring unforeseen circumstances, the Manager expects the average cost of borrowing for FCT to be above 4%. For operating expenses, the Manager will continue to work on cost optimisation initiatives, and to remain vigilant on the movement of energy prices and contracted service fees. It will adopt appropriate hedging strategies for energy contracts to mitigate the impact on its operating expenses.

While the macroeconomic environment remains challenging, we remain positive on the outlook of the suburban retail sector in Singapore, based on several factors such as Singapore's population growth, sustained healthy consumer spending on essentials, healthy demand for prime suburban retail space and tight supply in the retail market. We believe FCT is well- positioned to benefit from these factors going forward.

ACKNOWLEDGEMENTS

We welcome Mr Ho Kin San and Mr Darren Tan who were appointed to the board as Non-Executive and Independent Directors on 18 July 2023 and 26 September 2023, respectively. Kin San brings on board over 30 years of experience in corporate real estate legal practice across all property sectors. Darren has extensive leadership and management experience in finance and investments. Their appointment to the board will bolster and diversify the breadth of expertise on the board.

We thank Chee Wah, who will be retiring from the FCAM board as Director at the end of 2023. Chee Wah has made immense contributions in providing guidance and advice to the board and management during his tenure. This includes helping FCT navigate through the difficult times of the pandemic in 2020 and providing invaluable views on the transactions which helped re-constituted the enlarged FCT's portfolio. We wish Chee Wah all the best in his future endeavours.

I am retiring from the Board and Ms Koh Choon Fah will replace me as Chairperson on 1 November 2023. It has been an eventful 7 years, an exciting and educational experience for me personally and a challenging but productive period for Management, Board, Company and the Trust, a 7-year period of growth despite extensive business stoppages on account of COVID-19.

I am confident Choon Fah and her fellow directors will take FCAM and FCT to greater heights, ably supported as always by an experienced, supremely capable and dedicated Management team.

We thank all our stakeholders, Unitholders, tenants, shoppers and business partners included, for their continuing support.

Cheong Choong Kong
Chairman

Richard Ng
Chief Executive Officer

1. The ten largest suburban prime malls (in descending order of net lettable area) are Jurong Point, NEX, JEM, Parkway Parade, Northpoint City, City Square Mall, IMM, Causeway Point, Westgate and Waterway Point. Source: CISTRI, as at September 2023. Suburban malls are defined as malls outside Central Core and malls not allied with major tourist nodes (e.g. Sentosa, Changi Airport).