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Frasers Centrepoint Trust declares 26.1% drop in 2H2020 DPU of 4.372 cents

Felicia Tan
Felicia Tan • 3 min read
Frasers Centrepoint Trust declares 26.1% drop in 2H2020 DPU of 4.372 cents
Unitholders can expect to receive their distributions on Dec 4.
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The manager of Frasers Centrepoint Trust (FCT) has reported distribution per unit (DPU) of 4.372 cents for the 2HFY2020 ended Sept 30, down 26.1% lower from the DPU of 5.913 cents the year before.

This brings the total DPU for FY2020 to 9.042 cents, down 25.1% y-o-y.

Gross revenue for the 2HFY2020 came in 33.8% lower y-o-y at $64.46 million mainly due to the rental rebates granted to tenants.

The total amount of rental rebates distributed was $27.35 million.

Property expenses for the half year fell 13.6% y-o-y to $25.9 million mainly due to the lower property manager’s fee arising from lower gross revenue and net property income, lower salaries and related expenses arising from unfilled vacancies.

Net property income (NPI), therefore, fell 42.8% y-o-y for the 2HFY2020 to $38.6 million.

Distribution to unitholders in 2HFY2020 was down 21.7% y-o-y to $48.9 million. This was partially offset by the release of the $18.0 million in retained distribution from 1HFY2020 and the full year contributions of dividend received from FCT’s investments in AsiaRetail Fund (ARF) and Sapphire Star Trust (SST).

The distribution to unitholders for the full year was $101.2 million, down 15.5% y-o-y.

As at Sept 30, FCT’s financial position remains healthy with gearing level of 35.9%. The all-in average cost of borrowing was 2.4%, down 0.2 percentage points from the previous year due to the general decline in interest rates.

The total appraised value of FCT’s portfolio as at Sept 30 stood at $2.86 billion, compared to the $2.85 billion a year ago.

Anchorpoint and Yishun 10 saw declines of 3.1% and 7.9% in their respective appraised value while Bedok Point registered a 14.9% or $14 million gain based on the divestment price of the property.

The appraised value of Waterway Point, where FCT has a 40% shareholding via a joint venture remained unchanged at $1.30 billion.

Portfolio occupancy as at Sept 30 stood at 94.9%, up 0.3 percentage points q-o-q, but down 1.6 percentage points y-o-y.

The REIT’s weighted average lease expiry (WALE) stood at 1.55 years by net lettable assets (NLA) as at Sept 30.

According to the manager, portfolio tenants’ sales have recovered to near pre-Covid-19 level since June 2020. Portfolio shopper traffic stood at 60% to 70% of pre-Covid-19 levels in the months of July to September 2020.

It adds that its near-term focus is on managing the operating and financial performance of the enlarged property portfolio, amid the ongoing Covid-19 situation.

As at Sept 30, FCT’s cash and cash equivalents stood at $28.6 million.

Unitholders can expect to receive their distributions on Dec 4.

“The Covid-19 pandemic has hit the retail sector hard, particularly in the second half of FY2020. We have been working with our tenants in various ways to support them through this difficult period, including the provision of rental rebates which impacted the financial performance in 2HFY2020 and for the full year,” says Richard Ng, CEO of the manager.

“Notwithstanding the challenging environment, we announced on Sept 3 the acquisition of the remaining 63.11% stake in AsiaRetail Fund Limited for $1.06 billion and on Sept 28, an equity fund raising to raise gross proceeds of approximately $1.33 billion to finance the ARF acquisition and to pare down debts.”

“The ARF acquisition is transformative for FCT. It elevates FCT to one of the largest suburban retail mall owners in Singapore, and enhances its competitive advantages through scale and offerings which are critical for FCT to stay resilient and relevant in the ‘new normal’ post Covid-19,” Ng adds.

Units in FCT closed flat at $2.08 on Nov 2.

See also: FCT’s preferential offering to open on Oct 9

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