DPU of 3.04 cents for Frasers Centrepoint Trust

Distribution per unit up slightly despite fall in turnover and earnings in third quarter

Frasers Centrepoint Trust (FCT) has reported a small rise in distribution per unit (DPU) despite a dip in third-quarter turnover and earnings. DPU rose 0.1 per cent to 3.04 cents for the three months to June 30, from 3.036 cents a year earlier, said FCT manager Frasers Centre- point Asset Management yesterday.

During the quarter, gross revenue fell 4.4 per cent to $45 million while net property income slipped 5.1 per cent to $31.2 million. Property expenses came in at $13.9 million, down 2.6 per cent from a year ago.

The trust manager cited lower contributions from Northpoint mall, which is undergoing refurbishment works. The renovation is expected to be completed in September next year.

Dr Chew Tuan Chiong, chief executive of the trust manager, said in a teleconference that although the works are carried out in phases "to minimise income disruption... we expect the rental revenue to continue to be impacted".

FCT's portfolio comprises six malls: Causeway Point, Northpoint, Changi City Point, Bedok Point, YewTee Point and Anchorpoint.

  • AT A GLANCE

    GROSS REVENUE: $45 million (-4.4%)

    NET PROPERTY INCOME: $31.2 million (-5.1%)

    DISTRIBUTION PER UNIT: 3.04 cents (+0.1%)

The portfolio occupancy as at June 30 was 90.8 per cent, lower than the 92 per cent in the previous quarter. The decline was due in part to the renovation at Northpoint, as well as "transitional vacancy" owing to the fitting-out of a new anchor tenant at Changi City Point.

Mall occupancy at Bedok Point recovered from 86.1 per cent to 90 per cent over the second to third quarter, but it remains volatile as efforts to remix tenants continue.

The trust manager said 27 leases accounting for 4.6 per cent of its total net lettable area were renewed at 8.3 per cent higher rentals on average in the third quarter. Causeway Point was responsible for 67 per cent of the space renewed.

FCT had fully refinanced the $264 million borrowing due this month, through new bank borrowings and a bond issue. The trust manager said it has no refinancing remaining in the 2016 financial year.

Its gearing level was 28.5 per cent as at June 30, and the all-in average cost of borrowings dipped to 2.259 per cent from 2.286 per cent in the previous quarter.

Net asset value per unit was $1.90 as at June 30, down slightly from $1.91 at end-September last year.

"Overall, although the macroeconomic conditions are still somewhat uncertain, I think our portfolio which consists entirely of suburban malls is expected to remain as resilient as before," Dr Chew said.

FCT units closed unchanged at $2.12 yesterday, before the financial results were announced.

A version of this article appeared in the print edition of The Straits Times on July 16, 2016, with the headline 'DPU of 3.04 cents for Frasers Centrepoint Trust'. Print Edition | Subscribe