Booming suburban malls boost FCT returns

Frasers Centrepoint Trust (FCT) attributed growth to higher revenue contribution from Causeway Point, Changi City Point and Northpoint (above), which made up 85 per cent of net property income.
Frasers Centrepoint Trust (FCT) attributed growth to higher revenue contribution from Causeway Point, Changi City Point and Northpoint (above), which made up 85 per cent of net property income.ST PHOTO: ONG WEE JIN

Increased shopper traffic and higher rents have boosted returns at Frasers Centrepoint Trust (FCT).

Distribution per unit (DPU) rose 2.7 per cent to 2.859 cents in the fourth quarter, as gross revenue grew 1.7 per cent to $47.5 million.

FCT attributed its growth to a higher revenue contribution from Causeway Point, Changi City Point and Northpoint, which accounted for 85 per cent of net property income.

A full-year contribution from Changi City Point, which FCT acquired in June last year, also drove rental income up, it said in a statement yesterday.

Over the whole year, FCT has distributed 11.608 cents, 3.7 per cent higher than the previous year.

This was FCT's highest ever annual distribution and the ninth consecutive yearly rise in DPU since the trust was listed.

  • AT A GLANCE

  • GROSS REVENUE

    $47.5 million (+1.7%)


    NET PROPERTY INCOME

    $31.7 million (+1.2%)


    DISTRIBUTION PER UNIT

    2.859 cents (+2.7%)

The full-year distribution represented a 5.8 per cent yield based on FCT's price of $2.01 yesterday.

Net income also edged up 1.2 per cent to $31.7 million in the three months to Sept 30.

FCT's suburban malls were the steady performers as rents and occupancy rates held up despite the weak retail sector, said Dr Chew Tuan Chiong, chief executive officer of Frasers Centrepoint Asset Management, the managers of FCT.

Overall occupancy for its portfolio was at 96 per cent as at Sept 30, even though tenant-remixing activity was still ongoing at Changi City Point and Bedok Point.

FCT said it expects occupancy at the two malls to remain around current levels in the near term.

If an investor had bought into the Reit a year ago at $1.91 and held it till today, the DPU of 11.608 cents would represent a 6.1 per cent yield.

FCT had a gearing of about 28.2 per cent as at Sept 30, while 75 per cent of its borrowings were either on fixed interest rates or hedged against further rate rises.

Net asset value per unit as at Sept 30 reached a new high of $1.91, up 3.2 per cent compared with $1.85 a year earlier.

Dr Chew said: "Notwithstanding the uncertain economic outlook, FCT's well-located suburban malls which attract steady shopper traffic will contribute to the stability and sustainability of the portfolio's rental income and occupancy rates."

FCT units closed two cents higher at $2.01.

A version of this article appeared in the print edition of The Straits Times on October 23, 2015, with the headline 'Booming suburban malls boost FCT returns'. Print Edition | Subscribe