FCT DPU 6% rise on higher rentals

http://www.businesstimes.com.sg/premium/companies/others/fcts-q3-dpu-rises-6-higher-rentals-20140723

BT 20140723 LKFCT233138 1190060

FRASERS Centrepoint Trust (FCT) reported a 6 per cent rise in distribution per unit (DPU) to 3.022 Singapore cents in the third quarter ended June 30, thanks to higher retail rentals and occupancies.

The suburban mall operator enjoyed 7.8 per cent of positive rental reversions in the third quarter over the preceding leases contracted three years ago. Its portfolio occupancy also grew to 98.5 per cent from 96.8 per cent in the preceding quarter.

“We expect FCT’s portfolio occupancy and rental rates to remain sustainable,” said the trust manager’s chief executive, Chew Tuan Chiong. “The outlook for the retail market is expected to remain stable, given the trends in the growing median household income and sustained low unemployment rate.”

Gross revenue for the quarter rose 3.1 per cent from a year before to S$41.2 million and net property income (NPI) improved 2.4 per cent to S$29.1 million.

FCT said that the growth in revenue and NPI was supported by rental step-up of current leases, better rents achieved for new and renewed leases and the maiden contribution from Changi City Point that was acquired on June 16.

FCT’s property portfolio spanning Singapore now comprises Causeway Point, Northpoint, Anchorpoint, YewTee Point, Bedok Point and Changi City Point.

During the third quarter, 41 leases making up 33,623 sq ft or 3.1 per cent of FCT’s total net lettable area were renewed. Causeway Point achieved positive rental reversion of 8.1 per cent; Northpoint, YewTee Point and Anchorpoint achieved positive average rental reversion of 7-8 per cent; while Bedok Point marked a 3 per cent negative rental reversion.

The biggest improvement in occupancies was seen in Bedok Point, where occupancy rose to 99.3 per cent from 77 per cent in March, after several new tenants, including anchor tenant Harvey Norman, opened in fiscal third quarter.

FCT’s gearing ratio rose to 30.2 per cent as at June 30 from 27.7 per cent as at March 31, after it drew down on an unsecured term loan of $150 million on June 16 to part-finance the acquisition of Changi City Point.

Units of FCT rose one cent to close at S$1.965 yesterday. The ex-date for the declared distribution is July 29 and it will be paid on Aug 29.

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