Earlier today, Frasers Centrepoint Trust (SGX: J69U) released its fourth quarter and full year earnings update for its fiscal year ended 30 September 2018 (FY2018).
As a quick introduction for better context later, Frasers Centrepoint Trust is a real estate investment trust that owns suburban retail malls in Singapore. Its portfolio includes Causeway Point, Northpoint City North Wing (including the Yishun 10 Retail Podium), Anchorpoint, YewTee Point, Bedok Point and Changi City Point. It also holds a 31.15% stake in Hektar Real Estate Investment Trust (KLSE: 5121.KL), a retail-focused REIT listed in Malaysia.
Here are nine things investors should know about Frasers Centrepoint Trust’s results for the fourth quarter of FY2018:
1. Gross revenue for the reporting quarter inched up by 0.5% year-on-year to S$48.5 million, but net property income declined by 4.9% to S$32.9 million because of higher property expenses.
2. The REIT’s distribution per unit (DPU) was down by 3.6% year-on-year to 2.862 cents, mainly due to the lower net property income.
3. Based on Frasers Centrepoint Trust’s DPU of 12.015 Singapore cents for the whole of FY2018 and its closing unit price of S$2.22 as of 23 October 2018, the REIT has a trailing distribution yield of 5.4%.
4. As of 30 September 2018, the REIT’s gearing stood at 28.6%, which is a safe distance from the regulatory gearing ceiling of 45%.The REIT’s portfolio had a committed occupancy rate of 94.7% at the end of the reporting quarter.
5. The weighted average lease to expiry (by gross rental income) was at 1.72 years as of 30 September 2018. 89.2% of Frasers Centrepoint Trust’s leases (again by gross rental income) will expire between 2019 and 2020, while the remaining will expire thereafter.
6. In the fourth quarter of FY2018, 49 leases that accounted for 4.1% of the REIT’s total net lettable area were renewed at an average rental reversion rate of 0.2%.
7. Excluding Northpoint City North Wing, the REIT’s shopper traffic for its portfolio in the reporting quarter was 5.0% higher year-on-year. Shopper traffic in Northpoint City North Wing jumped by 36.5% compared to a year ago due to the completion of the mall’s asset enhancement initiative.
8. The REIT’s portfolio tenant sales for the there months ended August 2018 was 3.6% higher compared to the same period a year ago.
9. Here’s a succinct outlook that Frasers Centrepoint Trust shared about its own business in its latest earnings update:
“Excluding motor vehicles, retail sales index increased 2.4% year-on-year in August 2018.
We expect the performance of our suburban malls to remain stable.
Northpoint City North Wing, having stabilised following the completion of its asset enhancement exercise, has helped raised earnings.”
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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. The Motley Fool Singapore has a recommendation on Frasers Centrepoint Trust.