10 Quick Things Investors Should Know About Frasers Centrepoint Trust’s Latest Earnings

Last week, Frasers Centrepoint Trust (SGX: J69U) released its first quarter results for its fiscal year ending 30 September 2018 (FY2018). As a quick introduction, Frasers Centrepoint Trust is a REIT that owns six suburban retail malls in Singapore. Its properties include Causeway Point, Northpoint City North Wing (including the Yishun 10 Retail Podium), and Changi City Point. The REIT also holds a 31.15% stake in Hektar Real Estate Investment Trust (KLSE: 5121.KL), a retail-focused REIT listed in Malaysia.

Here are 10 things investors should know about Frasers Centrepoint Trust’s latest results:

1. Gross revenue for the reporting quarter grew 8.7% year-on-year to S$47.91 million while net property income improved by 9.1% to S$34.51 million.

2. Similarly, the REIT’s distribution per unit (DPU) was up by 3.8% year-on-year to 3 cents, mainly due to the improvement in net property income.

3. Based on Frasers Centrepoint Trust’s annualized DPU of 12 Singapore cents (from its aforementioned quarterly DPU) and its closing unit price of S$2.19 as of 5 February 2018, the REIT has a distribution yield of 5.5%.

4. As of 31 December 2017, the REIT’s gearing stood at 29.4%, which is a safe distance from the regulatory ceiling of 45%.

5. The REIT’s portfolio had a committed occupancy rate of 92.6% at end-2017.

6. The weighted average lease expiry (by gross rental income) was at 1.8 years as of 31 December 2017. 82% of FCT’s leases will expire between FY2018 and FY2020, while the remaining will expire between FY2021 and FY2022.

7. In the reporting quarter, 97 leases accounting for 8.8% of Frasers Centrepoint Trust’s total net lettable area were renewed at an average rental reversion rate of 1.0%.

8. Excluding Northpoint City North Wing, the shopper traffic at the REIT’s portfolio in the reporting quarter was 1.4% higher year-on-year. Shopper traffic through Northpoint City North Wing was 32.6% lower compared to the same period a year ago due to the closure of some entrances for temporary renovation at the mall.

9. Excluding Northpoint City North Wing, tenant sales at the REIT’s portfolio in the reporting quarter inched up 0.2% from a year ago.

10. In its earnings release, Frasers Centrepoint Trust gave some comments on its outlook:

“Singapore’s economy grew by 3.5% in 2017 in line with MTI’s forecast.

At Northpoint City North Wing, integration works with South Wing have been completed with 99% of the reconfigured areas leased and handed over to tenants.

Despite continuing headwinds and challenges in the retail sector, FCT’s well-located suburban malls are expected to remain resilient.”

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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 Lawrence Nga doesn’t own shares in any companies mentioned.