Frasers Centrepoint Trust (SGX: J69U) is a retail real estate investment trust (REIT) that owns six suburban malls in Singapore. These malls include Causeway Point, Northpoint City North Wing (including Yishun 10 retail podium), Changi City Point, Bedok Point, YewTee Point and Anchorpoint. The REIT also has a 31.15%-stake in Malaysia-listed Hektar Real Estate Investment Trust.
Investors who are interested to invest in a REIT should look at its historical financial performance to see if it has been performing strongly. Past strong performance might mean that the REIT can continue performing well in the future.
With that, here’s how Frasers Centrepoint Trust has performed over the last five years.
Revenue and net property income
Frasers Centrepoint Trust makes money by leasing out its malls for rental income. The REIT also earns from its tenants’ retail sales and the operation of car parks. After deducting property-related expenses such as property tax, property management fees, and maintenance expenses, we get the net property income (NPI) figure.
The following shows Frasers Centrepoint Trust’s revenue and NPI from FY2014 to FY2018 (the REIT has a 30 September year-end).Source: Frasers Centrepoint Trust FY2018 annual report
Frasers Centrepoint Trust’s revenue grew at a clip of 3.4% per annum over the last five fiscal years. The REIT saw its revenue fall in FY2016 and FY2017 mainly due to lower occupancy following asset enhancement initiative (AEI) works at Northpoint City North Wing. In FY2018, revenue improved due to the completion of the AEI works, resulting in higher occupancy at the mall in Yishun.
On the other hand, Frasers Centrepoint Trust’s NPI increased by 3.8% annually, from S$118.1 million in FY2014 to S$137.2 million in FY2018.
Distribution per unit
Ultimately, what flows down from the revenue received by the REIT to the investor is the distribution per unit (DPU).Source: Frasers Centrepoint Trust FY2018 annual report
Frasers Centrepoint Trust managed to grow its DPU consistently from 11.187 Singapore cents in FY2014 to 12.015 Singapore cents in FY2018, despite the lower revenue in FY2016 and FY2017. The growth translates to an annualised increase of 1.8%.
Over the longer term, the REIT has achieved 12 consecutive years of DPU growth, translating to an annualised increase of 5.9%, since its listing in 2006.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended units of Frasers Centrepoint Trust. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.