UPDATE: Frasers Centrepoint Trust fiscal 4Q net property income fell nearly 5 percent on higher property expenses

Singapore two-dollar bills

Frasers Centrepoint Trust’s manager said on Wednesday that its fiscal fourth quarter net property income fell 4.9 percent on-year to S$32.88 million on higher property expenses.

Gross revenue for the quarter ended 30 September rose 0.5 percent on-year to S$48.51 million, the trust manager, Frasers Centrepoint Asset Management (FCAM) said in a filing to SGX before the market open on Wednesday.

Property expenses rose 14.4 percent on-year in the quarter to S$15.63 million, mainly on higher property tax for Northpoint City North Wing, higher utilities tariff rates, higher professional fees and more ad-hoc repair and replacement works, it said.

The distribution to unitholders fell 3.4 percent on-year to S$26.44 million in the quarter, while the distribution per unit (DPU) fell 3.6 percent on-year to 2.862 Singapore cents from 2.97 Singapore cents in the year-ago quarter, it said. The ex-DPU date is 30 October, with payment on 29 November, FCAM said.

The portfolio occupancy rate rose to 94.7 percent as of 30 September, up from 94.7 percent on 30 September 2017, it said. Occupancy at Northpoint City North Wing improved to 96.5 percent from 81.6 percent as tenants began trading after the completion of an asset enhancement initiative last year, FCAM said. Changi City Point’s occupancy also improved to 93.8 percent from 88.5 percent as new leases began, it said.

For the full fiscal year, net property income rose 5.9 percent on-year to S$137.19 million, while gross revenue increased 6.5 percent on-year to S$193.35 million, mainly on the improved revenue from Northpoint City North Wing after its asset enhancement initiative, the filing said.

Shopper traffic for Northpoint City increased 36.5 percent on-year in the fiscal fourth quarter, while the rest of the portfolio saw a 5.0 percent increase in shopper traffic, it said.

“FCT’s property portfolio continued to achieve positive rental reversions during the year. Rentals from renewal and replacement leases from the properties commencing during the period, showed an average increase of 3.2 percent over the expiring leases,” the REIT manager said.

The DPU was 12.015 Singapore cents for the full fiscal year, up 1.0 percent from 11.90 Singapore cents in the previous fiscal year, it said.

Chew Tuan Chiong, CEO of FCAM, said that the full-year DPU was a high for the trust, and it marked a 12th straight year of DPU growth.

“FCT’s portfolio of suburban malls continues to benefit from the healthy shopper traffic and leasing demand that support its resilience amidst challenges facing the retail industry. We will continue work on initiatives to keep our malls attractive and relevant to our shoppers, making our malls convenient destinations where our shoppers can enjoy better experience beyond basic buying and dining,” Chew said.

“Going forward, we remain focused on continuous improvement in the financial performance of FCT as well as on acquisition strategies to drive further growth,” he added.

Frasers Centrepoint Trust’s portfolio comprises suburban retail properties Causeway Point, Northpoint City North Wing, including the Yishun 10 retail podium, Anchorpoint, YewTee Point, Bedok Point and Changi City Point, it said. It also holds a 31.15 percent stake in Hektar REIT, a Malaysia-based retail-focused REIT listed on Bursa Malaysia, it said.

This article was originally published on Wednesday 24 October 2018 at 7:45 A.M. SGT; it has since been updated.  

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