When interest rates go up, it becomes more expensive for REITs to borrow money to refinance their loans, which erodes dividends. This can spell trouble for Real Estate Investment Trusts (REITs), and Frasers Centrepoint Trust (FCT) is definitely feeling the heat. Over the past few years, FCT’s cost of debt has nearly doubled, going from 2.16% in 2021 to 4.2% in 2024. This significant increase not only affects borrowing costs but also eats into the dividends that investors have come to expect. Despite this, FCT has achieved a dominant position in the suburban mall sector in Singapore that will likely remain unthreatened for a long time. Cost Of Debt Ballooned Since Fed Rate Hikes Risk-free returns are literally effortless to achieve right now due to the persistently high interest rates, and borrowing costs have hovered at a two-decade high for nearly a year by now. As a result, when REITs need to refinance their existing loans (which were...