FCT posts steady DPU despite fall in revenue

Causeway Point contributed more than 50 per cent to Frasers Centrepoint Trust's net property income in the second quarter.
Causeway Point contributed more than 50 per cent to Frasers Centrepoint Trust's net property income in the second quarter.PHOTO: FRASERS

Frasers Centrepoint Trust (FCT) reported steady distribution per unit (DPU) for the second quarter despite a dip in revenue.

DPU for the three months ending March 31 came in at 3.04 cents, almost unchanged from 3.039 cents a year ago.

Gross revenue for the quarter slid 2.9 per cent to $45.7 million, as net property income declined 3.3 per cent year on year to $32.6 million.

The drag on turnover was caused by a lower contribution from Northpoint mall in Yishun as it is undergoing upgrading works.

However, higher net property income contributions from other properties partially offset this, said the trust manager.

Net asset value as at March 31 was $1.93 per unit, unchanged from six months prior.

  • AT A GLANCE

    GROSS REVENUE: $45.7 million (-2.9%)

    NET PROPERTY INCOME: $32.6 million (-3.3%)

    DISTRIBUTION PER UNIT: 3.04 cents (unchanged)

Causeway Point emerged as the portfolio's money maker, contributing more than 50 per cent to net property income.

The mall also made up 42 per cent of the trust manager's total net lettable area of the leases renewed during the quarter and achieved average rental reversion - the change in current rates compared with previous rental rates inked - of 6.3 per cent.

During the quarter, 47 leases accounting for 5 per cent of FCT's total net lettable area were renewed at an average rental reversion of 4.1 per cent. The overall rental reversion for the six months ending March 31 was 5.7 per cent.

This half-year result of rental reversion rate is lower than annual rental reversion rates achieved by the portfolio since it listed in 2006. Last year, it achieved 9.9 per cent, up from 6.3 per cent the year before.

The portfolio occupancy as at March 31 declined to 87.2 per cent from 91.3 per cent in the prior quarter, owing mainly to the planned vacancies at Northpoint in conjunction with the upgrading.

Causeway Point had the best occupancy rate of 99.3 per cent, down slightly from 99.7 per cent for the three months to December last year.

FCT's manager disclosed that portfolio tenant sales for the three months from December last year to February were 12.1 per cent lower than the same period last year.

Looking ahead, FCT's manager said leasing interest for the reconfigured areas of Northpoint remains strong. The asset enhancement works are proceeding on schedule and are expected to be completed by September this year.

Although challenges from labour constraints, e-commerce and tepid sales growth remain in the retail sector, FCT's well-located suburban malls are expected to remain resilient, the manager added.

Lee Xin En

A version of this article appeared in the print edition of The Straits Times on April 26, 2017, with the headline 'FCT posts steady DPU despite fall in revenue'. Print Edition | Subscribe