Tag Archives: changi city point

FCT DPU 6% rise on higher rentals


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.


BT: Non-residential deals to remain active


Non-residential deals will continue to drive investment activity in Singapore for the rest of this year, given faltering sales in the tepid private residential market, DTZ said in a report yesterday.

The report found that overall real estate investments fell around 11 per cent from the previous quarter to $4.4 billion in Q2.

And although non-residential investments (particularly offices) drove the volume, they too fell 6 per cent to $2.9 billion on muted transactions in the hospitality and mixed-use sectors.

At least six big-ticket non-residential property deals were concluded in Q2.

In the commercial sector, three office properties – Prudential Tower, Equity Plaza and Cecil House – all along Cecil Street in the central business district, were transacted. A consortium of Far East Organization, Far East Orchard and Sekisui House also beat seven others in a government land sales tender to clinch a 99-year-leasehold commercial site on Woodlands Avenue 5/Woodlands Square for $634 million.

In retail, Frasers Centrepoint Trust acquired Changi City Point at Changi Business Park for $305 million; in Industrial, Ascendas Reit bought Hyflux Innovation Centre at 80 Bendemeer Road for $191 million.

The transactions in Q2 brought the total investment volume in the first half of 2014 to $9.4 billion, 17 per cent lower than the same period last year. It also looks on track to achieve the earlier forecast of $20-25 billion for the full year.

Property companies and real estate investment trusts (Reits) were the main drivers of activity in Q2. Property companies were the largest buyers, accounting for $3.1 billion or 71 per cent of investment activity.

Reits were also very active, but their divestments of $512 million exceeded their acquisitions of $496 million, making them net sellers in Q2. This is expected to reverse in Q3, though. Acquisitions are likely to be boosted by the listing of Frasers Hospitality Trust.

The trust’s initial portfolio will comprise six hotels and six serviced residences, including two – InterContinental Singapore and Fraser Suites Singapore – located in Singapore. Both will be injected for a combined value of $824.1 million.

Swee Shou Fern, DTZ’s director of investment advisory services, expects Reit and developer acquisitions to continue supporting investment activity going forward.

“As global real estate markets start to improve, investors and funds are becoming more positive about the performance of the real estate . . . market. This could see them increasing their allocations to real estate and Singapore could benefit, being one of the most liquid markets in the region,” she said.

A Colliers report released last week turned up similar findings and projected similar trends.

It blamed the slump in residential investment sales on “the double whammy of frail investor interests in en bloc and strata-titled properties, as well as anaemic developers’ quest for land acquisition via collective sales”.

“In the next six months of the year, sales emanating from (government) land sales are forecast to stay subdued. On the private sector front, the collective sales market will likely remain depressed as the same factors that have kept it at a standstill will continue to play out in the months ahead,” it projects.

The consultancy expects interest in commercial properties to gather pace, backed by a steadily recovering office rental market.

“In addition, small and mid-sized family offices or single family offices are increasingly shifting their asset allocation towards property-oriented investments, particularly that of good quality office buildings that have potential upside in yield and capital appreciation. More of such deals can be expected to be sealed in the coming quarters,” it said.