15 Aug 2024
Frasers Centrepoint Trust upgraded to second-highest tier “AA” in MSCI ESG Rating
Northpoint City is the first and largest integrated development in the North of Singapore and includes the 920-unit North Park Residences, a community club, and town plaza with direct connectivity to the Yishun Mass Rapid Transit station and bus interchange
MSCI ESG Rating has upgraded Frasers Centrepoint Trust (FCT) to the second-highest tier ‘AA’ from ‘A’ in its latest report dated 31 July 2024. The ‘AA’ rating recognises FCT as a leading company among its peer group in managing the most significant environmental, social and governance (ESG) risks and opportunities.
FCT has made steady progress in its MSCI ESG ratings since its initiation rating in May 2020. It received the ‘A’ rating in May 2022 and 'AA' in the latest rating action on 26 June 2024, among 69 peers in the MSCI All-Country World Index (Real Estate Management and Services) group.
MSCI ESG Ratings measure a company’s management of financially relevant ESG risks and opportunities. The Ratings used a rules-based methodology to identify industry leaders and laggards according to their exposure to ESG risks and how well they manage those risks relative to peers.
The progress behind the upgrade
The MSCI ESG Rating report on FCT covered a variety of focus areas that collectively contributed to FCT’s upgrade, including talent management, business ethics, green building efforts and corporate governance.
FCT’s talent management practices lead those of peers, including grievance reporting channels to address potential workplace issues. This played a critical role in driving FCT’s upgrade.
Having trained all employees on business ethics standards, FCT leads most global peers in business ethics practices, including policies on bribery and anti-corruption as well as regular audits of ethical standards.
FCT also leads industry peers in green building efforts, with the REIT leveraging underutilised sites and adopting green lease agreements to improve portfolio sustainability. In FY23, 100% of FCT’s portfolio was certified to green building standards.
Frasers Centrepoint Trust’s growth and resilience
The MSCI ESG Rating upgrade follows a string of milestones demonstrating FCT’s growth and portfolio resilience.
On 18 March 2024, FCT was added to the Straits Times Index, which tracks the 30 largest listed companies on the Singapore Exchange.
FCT announced on 26 March 2024 the completion of its acquisition of an additional 24.5% effective interest in retail mall NEX, bringing the REIT’s stake in the retail mall of 300 stores to 50%. The Trust raised gross proceeds of S$200 million from an equity fund raising exercise by way of a private placement to partialy fund the acquisition. The exercise was approximately 2.5 times covered, with strong participation from new and existing institutional, accredited and other investors.
Located in Serangoon, NEX is the largest suburban retail mall in Northeast Singapore
Following the completion of the acquisition of the 24.5% stake in NEX, FCT's market share rose and it became the largest suburban retail mall owner in Singapore, with a portfolio of nine high quality suburban retail malls retail malls that are well located in high population density residential areas and within minutes to public transportation amenities.
The retail portfolio has approximately 2.7 million square feet of retail net lettable area, over 1,600 leases with a strong focus on providing necessity spending, food & beverage and essential services.
From waste management to solarisation, like-minded partnerships play a key role in enabling us to scale up and accelerate our sustainability efforts
FCT’s portfolio continues to also make progress in relation to the Group’s ESG commitments and further embedding circularity principles within its portfolio. In a partnership between our Singapore business unit and Life Lab Resources inked in January 2024, we rolled out the WasteMaster food waste valorisation system across five malls – Causeway Point, Waterway Point, Northpoint City, Century Square and Tampines 1 – to fully integrate tenants into a holistic food waste segregation programme.
Six of FCT's malls are also part of Singapore’s largest single solarisation roll-out for retail malls and other sustainable energy innovations. They include Causeway Point, Century Square, Hougang Mall, Northpoint City (North Wing), Tampines 1 and White Sands.
In addition, two malls under FCT's portfolio, Tampines 1 and Century Square are part of SP Group's brownfield distributed district cooling (DDC) project, forming two of the three key injection nodes for the network. Both malls were selected for their existing sustainable and energy-efficient structures, and will produce chilled water for their cooling needs and surrounding buildings within the district. The project is expected to be completed and operational by the first half of 2025.
FCT’s retail malls also actively participate in the industry-first Inclusion Champions programme, aimed at creating more inclusive spaces and experiences for members of the community who have different needs. For example, dementia go-to-points (GTPs) are available at every Frasers Property mall in Singapore to serve as "safe return" points where members of the public can bring persons with dementia who may have difficulties finding their way home, and staff at the GTPs will contact their caregivers and reunite them. In addition, staff and retail tenants’ employees are provided with consumer inclusiveness training, collectively bolstering the accessibility of FCT’s malls.
These ESG efforts are among many others that have earned Frasers Property a ‘Champion of Good’ conferment by the National Volunteer & Philanthropy Centre (Singapore) in July 2024, a second consecutive conferment.
In its 3Q FY24 business updates, FCT reported more than 99% occupancy for its retail portfolio and is supported by a well-spread debt maturity.