UPDATE: Frasers Centrepoint Trust reports fiscal 4Q net property income edged down, missing Daiwa forecast

Frasers Centrepoint Trust Changi City PointChangi City Point mall. Source: Frasers Centrepoint Trust

This article was originally published on Wednesday, 23 October 2019 at 8:47 A.M. SGT; it has since been updated with more details.

Frasers Centrepoint Trust reported Wednesday its fiscal fourth quarter net property income slipped 0.1 percent on-year to S$32.85 million due to non-cash accounting adjustments related to leases. The results missed a forecast from Daiwa.

Gross revenue for the quarter ended 30 September came in at S$48.27 million, down 0.5 percent on-year, the REIT said in a filing to SGX.

The distribution per unit (DPU) for the quarter was 2.913 Singapore cents, up 1.8 percent from 2.862 Singapore cents in the year-ago quarter, the filing said.

Daiwa had forecasts net property income of S$34.4 million on gross revenue of S$49.2 million, with a DPU of 3.04 Singapore cents.

Excluding the non-cash accounting adjustments, revenue and net property income for the quarter would have risen 2.7 percent and 4.8 percent on-year respectively, on higher higher average portfolio occupancy and higher contributions from Northpoint City North Wing, Changi City Point and YewTee Point, the REIT said.

The portfolio had 96.5 percent occupancy as of end-September, compared with 96.8 percent in the year-ago period, the filing said. In the fiscal fourth quarter, the trust’s average rental reversion was 3.9 percent, including Waterway Point.

For the full fiscal year, Frasers Centrepoint Trust reported net property income of S$139.28 million, up 1.5 percent on-year, on gross revenue of S$196.39 million, up 1.6 percent on-year. The full-year DPU came in at 12.07 Singapore cents, up 0.5 percent from 12.015 Singapore cents, the filing said.

“We are delighted that the trust has delivered another quarter of good performance to close FY2019 on a strong note. FY2019 is a transformational year for FCT,” Richard Ng, CEO of Frasers Centrepoint Asset Management, the REIT’s manager, said in the statement.

“The trust invested S$910 million to acquire significant stakes in PGIM Real Estate AsiaRetail Fund Limited and in Waterway Point, which reinforced FCT’s position and enlarged its market share in the Singapore suburban retail sector,” he added. “Together with the opportunity to acquire suburban retail assets from its sponsor Frasers Property, FCT now has a very strong pipeline of assets in Singapore, setting the stage
for an exciting phase of growth.”

In its outlook, Frasers Centrepoint Trust noted Singapore’s economic growth has slowed amid a weaker global outlook and increased uncertainty due to the U.S.-China trade war.

But the trust pointed to its portfolio of seven quality suburban retail properties.

“These properties are located in populous residential precincts and they are well-connected to the public transportation system. The focus on necessity shopping, healthy mall occupancy and steady shopper traffic helps to underpin the stable performance and resilience of the portfolio,” the trust said.

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