Frasers Centrepoint Trust's quarterly DPU falls 1.5%

FCT's portfolio comprises six malls, including Changi City Point, valued at $2.5 billion as at Sept 30.
FCT's portfolio comprises six malls, including Changi City Point, valued at $2.5 billion as at Sept 30.PHOTO: FRASERS CENTREPOINT MALLS

But full-year DPU rises 1.3% to 11.764 cents - the highest since 2006 listing

Frasers Centrepoint Trust (FCT) reported a dip in its fourth-quarter distribution per unit (DPU) amid lower revenue and income, though the full-year showing was its strongest on record.

DPU for the three months ended Sept 30 was 2.815 cents, down by 1.5 per cent from 2.859 cents in the corresponding period last year.

But for the full year, DPU rose 1.3 per cent to 11.764 cents - the highest DPU since FCT's listing in 2006, its trust manager said yesterday.

"FCT has maintained steady growth, stable performance and delivered higher DPU every year at a compounded annual growth rate of almost 7 per cent," said Dr Chew Tuan Chiong, chief executive of FCT's manager, Frasers Centrepoint Asset Management.

Gross revenue for the quarter fell 6 per cent to $44.6 million, from $47.5 million in the previous year.

The slide was largely due to lower contributions from Northpoint mall in Yishun which is being refurbished, and a vacancy at Changi City Point due to a changeover in an anchor tenant. Net property income dipped a marginal 0.9 per cent to $31.5 million in the fourth quarter.

  • AT A GLANCE

  • GROSS REVENUE:
    $44.6 million (-6%)

  • NET PROPERTY INCOME:
    $31.5 million (-0.9%)

  • DISTRIBUTION PER UNIT:
    2.815 cents (-1.5%)

Meanwhile, property expenses fell 16.4 per cent to about $13.2 million, owing to lower utilities tariffs and other property expenses.

The trust manager said the $60 million renovation of Northpoint is set to be ready next September and could lift average gross rental rate at the mall by about 9 per cent.

FCT's portfolio comprises six malls - Causeway Point, Northpoint, Changi City Point, Bedok Point, YewTee Point and Anchorpoint - valued at $2.5 billion as at Sept 30.

On the acquisition front, Dr Chew said FCT can tap the strong asset pipeline - such as Waterway Point and the future Northpoint City - of its sponsor Frasers Centrepoint, although no timeline has been set.

"We are looking actively at some third-party assets... Given that the economy has been a bit slow, maybe one or two additional assets are becoming available," he said.

The overall portfolio occupancy as at Sept 30 was 89.4 per cent, down a tad from the 90.8 per cent level at the end of June.

Average rental reversion was 4.6 per cent in the fourth quarter and 9.9 per cent for the year, the highest in four years. Net asset value per unit was $1.93 as at Sept 30, up from $1.91 a year earlier.

For the full year, FCT net property income fell 0.9 per cent to $129.9 million, with a turnover of $183.8 million - 2.9 per cent lower.

Despite the weaker economic outlook and challenges in the retail sector, Dr Chew said well-located suburban malls will remain resilient.

FCT units closed three cents lower at $2.13 yesterday.

A version of this article appeared in the print edition of The Straits Times on October 22, 2016, with the headline 'Frasers Centrepoint Trust's quarterly DPU falls 1.5%'. Print Edition | Subscribe