With the exception of Bukit Sembawang Estates, developers have had a tough 12 months. The pandemic has upended certain sectors of the economy, causing revaluation losses in malls, hotels and serviced residences. In addition, developers and the REITs they sponsor had to provide rental support for their SME tenants. All these impacted earnings. Downward revaluations in properties also affected NAVs and, in many cases, raised gearing ratios. CapitaLand and City Developments (CDL) announced headline losses.

Elsewhere, Frasers Property (FPL) announced plans to raise $1.28 billion through a dilutive rights issue in the ratio for 35 new shares for every 100 shares, at $1.18 each. This represents a significant discount to the pre-rights NAV of $2.58 and pro forma NAV of $2.20 post-rights.

FPL’s cash flow is facing challenges, and the developer and its major shareholders may just want to ensure the company has sufficient financial flexibility to “enhance business resilience through continued exposure to industrial, logistics and business park assets”. Among other factors, FPL hopes to build “financial agility through capital partnerships”. Some 54.7% of the proceeds would be used for investment, acquisitions and capital expenditures, 19.5% will be used to set up private funds, and the remaining for general corporate purposes.

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