MENU

2 Things That Investors Should Know About Frasers Centrepoint Trust Now

Frasers Centrepoint Trust  (SGX: J69U), or FCT, is a retail REIT with a portfolio comprising suburban retail malls in Singapore such as Causeway Point, Northpoint City North Wing (including Yishun 10 Retail Podium), and Anchorpoint. The REIT also holds a 31.15% stake in Hektar Real Estate Investment Trust (5121.KL), a retail REIT in Malaysia.

There are two things to know about Frasers Centrepoint Trust right now: its latest financial performance and valuation.

Financial performance

Here is a summary showing Frasers Centrepoint Trust’s financial performance for the second quarter of financial year ending 30 September 2018 (FY18).

Source: Frasers Centrepoint Trust Results Presentation

Gross revenue for the quarter was up 6.3% year-on-year to S$48.6 million while net property income rose 6.9% to S$34.8, million mainly due to a 31.7% year-on-year revenue increase from Northpoint City North Wing (including contribution from Yishun 10 retail podium). The mall’s occupancy improved significantly after the completion of asset enhancement initiative works.

As at 31 March 2018, the retail REIT clocked in a gearing ratio of 29.2% while its occupancy rate stood at 94%.

In all, Frasers Centrepoint Trust had a good quarter with all metrics performing ahead of the same period last year.

Valuation

There are two useful valuation metrics for assessing REITs. They are the price-to-book (PB) ratio, and the distribution yield.

The table below shows Frasers Centrepoint Trust’s PB ratio and distribution yield. It also shows the respective averages for the two valuation metrics for the 42 REITs and stapled trusts that are listed on the Singapore stock market.

Source: SGX StockFacts; data as of 6 July 2018

We can see that Frasers Centrepoint Trust’s valuation is at a premium to the market average, both in terms of PB and distribution yield.

Worried about the overall state of the market? Do you know the 1 thing you should never do in the stock market? The Motley Fool Singapore’s new e-book lays out a plan to handle market crashes, details the greatest advantage you have as an investor, and looks at decades worth of market data to bring you the smartest insights on investing. You can download the full e-book FREE of charge—Simply click here now to claim your copy

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. Motley Fool has a recommendation for Frasers Centrepoint Trust.