Frasers Centrepoint Trust's DPU up 0.7% in Q1

Occupancy at Changi City Point rose with the opening of NTUC FairPrice Finest supermarket in October.
Occupancy at Changi City Point rose with the opening of NTUC FairPrice Finest supermarket in October.ST FILE PHOTO

Frasers Centrepoint Trust (FCT) delivered a higher first-quarter distribution per unit (DPU) despite a dip in turnover and income.

DPU for the three months ended Dec 31 was 2.89 cents, up by 0.7 per cent from the 2.87 cents in the same period a year earlier, its trust manager said yesterday.

Distribution to unit holders climbed by 1.1 per cent to $26.62 million in the first quarter.

The trust manager, Frasers Centrepoint Asset Management, said lower contributions from Northpoint mall in Yishun, which is undergoing renovation, continued to drag on turnover.

Gross revenue fell 6.4 per cent to $44.08 million, while net property income slipped by 5.7 per cent to $31.64 million.


    GROSS REVENUE: $44.08 million (-6.4%)

    NET PROPERTY INCOME: $31.64 million (-5.7%)

    DISTRIBUTION PER UNIT: 2.89 cents (+0.7%)

The manager noted that Causeway Point in Woodlands was the star performer in the quarter, accounting for 52.8 per cent of net property income contribution.

"One of the reasons why Causeway Point continues to perform is that it is still a monopoly in that Woodlands region and the sales per sq ft actually has been doing quite good," said Dr Chew Tuan Chiong, chief executive of FCT's manager.

Higher net property income from Causeway Point, along with Bedok Point and YewTee Point, helped to offset lower numbers from the trust's other retail properties.

Apart from those three malls, FCT's portfolio also includes Northpoint and Yishun 10 Retail Podium, Changi City Point and Anchorpoint. Altogether, they were valued at $2.56 billion as at Dec 31.

Portfolio occupancy improved to 91.3 per cent as at Dec 31, higher than the 89.4 per cent in the previous quarter, led once more by Causeway Point with an occupancy rate of 99.7 per cent.

Dr Chew noted in a briefing that occupancy also rose at Northpoint after phase one of refurbishment was completed, and at Changi City Point with the opening of NTUC FairPrice Finest supermarket in October.

In an update, the manager said the $60 million renovation of Northpoint is on track, with the final phase of renovation works due to start in the middle of next month.

The mall is expected to be ready in September and could lift average gross rental rate at Northpoint by 9 per cent. "The leasing is progressing on schedule and the interest in taking up space in Northpoint remains to be quite high," Dr Chew added.

The trust had 66 leases, accounting for 12.4 per cent of FCT's total net lettable area, renewed at an average rental reversion of 6.9 per cent in the first quarter.

Quarterly earnings per unit was 2.73 cents, down from 2.88 cents a year ago, while net asset value per unit remained unchanged at $1.93.

Despite the weaker economic outlook and challenges in the retail sector, Dr Chew is sanguine about prospects. "I think conditions will be somewhat volatile... We do, however, have the comfort that suburban malls continue to show resilience and are very stable," he said.

FCT units closed half a cent lower at $1.965 yesterday, before the earnings were announced.

A version of this article appeared in the print edition of The Straits Times on January 21, 2017, with the headline 'Frasers Centrepoint Trust's DPU up 0.7% in Q1'. Print Edition | Subscribe