“FCT has continued to deliver consistent performance and a steady DPU of 3.04 cents for 2Q17. Our financial position remains solid with low gearing level of 29.4%. We will continue to focus on improving our mall performance and to deliver steady performance for our stakeholders.”
Dr Chew Tuan Chiong, Chief Executive Officer
3.04 cents SGD (2Q 2017)
FCT 2Q17 DPU held steady at 3.04 cents
- Average rental reversion for 2Q17 at +4.1%
- AEI works at Northpoint proceeding on schedule, leasing interest for the reconfigured areas remains strong
Frasers Centrepoint Asset Management Ltd. (“FCAM”), the manager of Frasers Centrepoint Trust (“FCT”), is pleased to announce distribution per unit (“DPU”) of 3.04 cents for the period from 1 January to 31 March 2017 (“2Q17”).
Gross revenue for 2Q17 was $45.7 million, down 2.9% year-on-year, due mainly to lower contribution from Northpoint which is undergoing asset enhancement initiative (AEI) works, but partially offset by higher contributions from other properties. Net property income for 2Q17 declined 3.3% year-on-year to $32.6 million. Higher net property income contributions from Causeway Point and Changi City Point helped to mitigate the lower contributions from other properties in the portfolio.
Gearing level of FCT stood at 29.4% and the weighted average debt maturity was 2.4 years. The all-in average cost of borrowings in 2Q17 was 2.2%, up slightly from 2.1% in the prior quarter. FCT has approximately 57% of its borrowings on fixed or hedged-to-fixed interest rates. Net asset value as at 31 March 2017 was $1.93 per unit.
During 2Q17, 47 leases accounting for 5.0% of FCT’s total net lettable area (“NLA”) were renewed at an average rental reversion of +4.1%. Causeway Point, which accounted for 42% of the total NLA of the leases renewed during the quarter, achieved average rental reversion of +6.3%. The overall rental reversion for the six months ended 31 March 2017 was 5.7%.
The portfolio occupancy as at 31 March 2017 declined to 87.2% from 91.3% in the prior quarter, owing mainly to the planned vacancy at Northpoint in conjunction with the ongoing AEI. Occupancies at the other properties were comparable with the previous quarter.
The portfolio shopper traffic in the 3-month period between January and March 2017 declined 3.5% year-on-year and 7.7% quarter-on-quarter. Portfolio tenant sales for the 3-month period from December 2016 to February 2017 was 12.1% lower compared with the same period last year. Excluding Northpoint which is undergoing AEI, portfolio tenant sales were 6.9% lower year-on-year.
Dr Chew Tuan Chiong, Chief Executive Officer of FCAM, said, “FCT has continued to deliver consistent performance and a steady DPU of 3.04 cents for 2Q17. Our financial position remains solid with low gearing level of 29.4%. We will continue to focus on improving our mall performance and to deliver steady performance for our stakeholders.”
Outlook
Excluding motor vehicles, retail sales index declined 4.9% year-on-year in February 2017.
The asset enhancement works at Northpoint are proceeding on schedule and are expected to complete by September 2017. Leasing interest for the reconfigured areas remains strong.
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.
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Important Notice
The value of units (“Units”) in FCT and the income derived from them, if any, may fall as well as rise. Units are not obligations of, deposits in, or guaranteed by, the Manager of FCT, or any of its affiliates. An investment in Units is subject to investment risks, including the possible loss of the principal amount invested.
Investors have no right to request the Manager to redeem their Units while the Units are listed. It is intended that Unitholders may only deal in their Units through trading on the SGX-ST. Listing of the Units on the SGX-ST does not guarantee a liquid market for the Units.
The past performance of FCT is not necessarily indicative of the future performance of FCT.