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DPU up 4% at Frasers Centrepoint Trust

frasers centrepoint fct Frasers Centrepoint Trust (SGX: J69U), or FCT, which owns suburban retail properties in Singapore such as Causeway Point, Northpoint, Anchorpoint, YewTee Point and Bedok Point, saw its gross revenue for the first quarter of 2014 (1Q 2014) increase by 5% to $40 million, as compared to the previous year. The rise in revenue was largely due to improved revenue from Causeway Point, after the completion of addition and alteration works in the mall.

Net property income for 1Q 2014 was up 4.4% year-on-year to $28.3 million. Income available for distribution for the quarter rose 4.0% to $22.7 million. Distribution per Unit (DPU) was at 2.5 Singapore cents, an increase of 4.2% over the previous year.

As of 31st December 2013, the gearing level was at 29.7% and the weighted average debt maturity was 2.7 years. 95% of FCT’s borrowings are on fixed interest rate or have been hedged via interest rate swaps, with the average cost of borrowing at 2.7%. The net asset value is at S$1.77.

FCT’s portfolio occupancy stood at 96.7%, decreasing slightly from 98.4% in 4Q 2013. The decline was mainly due to a huge drop in the occupancy rate at Bedok Point to 80.2% from 96.7% in end-September 2013. The 16.5 percentage point decline was due to “on-going renovation of shop spaces of incoming tenants and vacancy from expired leases in the October-December 2013 quarter”.

Dr Chew Tuan Chiong, Chief Executive Officer of the manager of FCT, said, “Investors will be pleased that FCT continues to deliver steady growth and good performance in 1Q14. The Singapore economy is projected to grow between 2% and 4% in 2014. Against this backdrop, performance of FCT’s portfolio is expected to remain stable. Following the successful completion of asset enhancement for Causeway Point, the next growth catalyst for FCT is likely to come from acquisitions of pipeline assets.”

Two assets that can be injected into FCT have been identified. They are Changi City Point and The Centrepoint. They are part of 12 retail malls in Singapore managed by Frasers Centrepoint (SGX: TQ5), including the five malls that are part of FCT.

Shares of FCT closed at $1.79. The historical price-to-book ratio is at 1, meaning FCT is trading near its net asset value. The dividend yield is at close to 6%.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.  Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.