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Frasers Centrepoint Trust reports 1.2% higher DPU of 12.227 cents for FY2022

Felicia Tan
Felicia Tan10/26/2022 07:39 AM GMT+08  • 3 min read
Frasers Centrepoint Trust reports 1.2% higher DPU of 12.227 cents for FY2022
Waterway Point, part of FCT's portfolio. Photo: Albert Chua/The Edge Singapore
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Frasers Centrepoint Trust (FCT) has reported a distribution per unit (DPU) of 6.091 cents for the 2HFY2022 ended Sept 30, relatively flat compared to the DPU of 6.089 cents in the same period the year before.

Distribution to unitholders for the half-year period stood 0.2% higher y-o-y at $103.78 million. The REIT had included $4.8 million of its distributable income which was retained in the 1HFY2022 and retained $1.7 million of its distributable income for the current period.

2HFY2022 gross revenue increased by 7.9% y-o-y to $180.74 million on full contribution from the acquisition of the remaining 63.11% stake in AsiaRetail Fund (ARF). The acquisition was completed on Oct 27, 2020. The higher gross revenue was partly offset by the absence of contribution from the three retail properties – Bedok Point, Anchorpoint and YewTee Point – divested in the FY2021.

Property expenses for the 2HFY2022 increased by 12.9% y-o-y to $52.6 million mainly due to higher property tax, maintenance and utilities and other expenses including marketing expenses and reimbursement of staff costs.

Consequently, net property income (NPI) for the half-year period increased by 6.0% y-o-y to $128.12 million.

For the FY2022, the trust’s DPU stood at 12.227 cents, 1.2% higher than the DPU of 12.085 cents in the FY2021.

See also: FLCT sees ‘healthy leasing momentum’ in 1QFY2023

Distribution to unitholders for the full year rose 1.7% y-o-y to $208.19 million.

FY2022 gross revenue rose 4.6% y-o-y to $356.93 million, reaching a new high for the REIT.

Property expenses for the full year increased by 4.0% y-o-y to $98.3 million.

See also: Oxley Holdings report 98.8% plunge in 1HFY2023 earnings of $277,000

NPI for the FY2022 increased by 4.9% y-o-y to $258.60 million, another new high for the REIT.

As at Sept 30, FCT’s portfolio committed occupancy rose 0.4 percentage points q-o-q to 97.5%. The REIT’s rental portfolio achieved better average rental reversion of 1.5% (on incoming versus outgoing basis) and 4.2% (on average versus average basis), compared with the previous year’s -0.6% and 2.1% for the respective figures.

Its weighted average lease expiry (WALE) stood at 1.87 years by net lettable area (NLA) and 1.78 years by gross rental income (GRI).

Shopper traffic and tenants’ sales in the FY2022 rose 12.4% and 11.3% y-o-y respectively.

Occupancy cost for the retail portfolio improved by three percentage points y-o-y to 16.2% in FY2022.

As at Sept 30, FCT’s aggregate leverage stood at 33.0% with an interest coverage ratio of 5.19x. Its all-in average cost of debt for the year rose to 2.5% from 2.4% in June.

The REIT’s net asset value (NAV) per unit rose 1.3% y-o-y to $2.33 as at Sept 30.

For more stories about where money flows, click here for Capital Section

Cash and cash equivalents stood at $38.2 million as at Sept 30.

“We are pleased that FCT closed FY2022 with higher revenue, NPI and DPU. Improvements in operating performance were broad-based with double-digit year-on-year rise in shopper traffic and tenants’ sales, positive rental reversion and higher portfolio occupancy. The appraised value of FCT’s suburban retail portfolio has also remained relatively stable,” says Richard Ng, CEO of the manager.

“While there are headwinds from rising interest rates, inflation and volatilities in the global geopolitical situations, we see several opportunities that would help cushion the impact. These include rent growth and room for higher ancillary income, opportunity for asset enhancement initiatives (AEI) for value creation and higher contributions from the acquisition of the additional 10% stake in Waterway Point to be completed in FY2023,” he adds.

“FCT’s malls are also well positioned to leverage their proximity to homes, provision of basic essentials and strong loyalty program membership base to benefit from the rising trend of hybrid work arrangement and increasing consumer preference for click-and-collect and order fulfilment from malls near their homes.”

FCT’s books will close on Nov 3. Unitholders will receive their distributions on Nov 29.

Units in FCT closed 5 cents higher or 2.55% up at $2.01 on Oct 25.

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