Frasers Centrepoint Trust (FCT) J69U has reported a distribution per unit (DPU) of 6.130 cents for the 1HFY2023 ended March 31, 0.1% lower than the DPU of 6.136 cents in the 1HFY2022.
Gross revenue for the period grew by 6.5% y-o-y to $187.59 million on the back of higher occupancy, stronger turnover rents and positive rental reversion.
Net property income (NPI) rose by 5.7% y-o-y to $137.96 million due to the higher gross revenue.
Distribution to unitholders rose by 0.3% y-o-y to $104.68 million. During this period, FCT released the $1.7 million of its tax-exempt income available for distribution which was retained in the 2HFY2022, but kept $3.0 million of its income for the 1HFY2023.
As at March 31, FCT’s occupancy hit a high of 99.2% on healthy leasing demand. FCT’s occupancy of Century Square increased to 96.8% after 88.7% when it secured lease commitment for its anchor cinema space. Overall, FCT’s portfolio properties saw positive y-o-y growth in terms of revenue and NPI of around 6%.
The trust’s overall weighted average lease to expiry (WALE) stood at 1.93 years by net lettable area (NLA) and 1.84 years by gross rental income (GRI). Average rental reversion for its retail portfolio stood at a positive 1.9% for the 1HFY2023 on an incoming versus outgoing basis and positive 4.3% on an average-to-average basis, both higher compared to the rental reversions in the same period the year before.
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As at March 31, FCT’s aggregate leverage stood at 39.6%, 6.6 percentage points higher on a h-o-h basis. Its interest coverage ratio stood at 4.39x, compared to the 5.19x as at Sept 30, 2022 due to the increase in bank borrowings to finance the acquisitions of the effective 25.5% interest in Nex and the additional 10.0% interest in Waterway Point. The acquisitions were completed on Feb 6 and Feb 8 respectively.
As at March 31, FCT’s proportion of fixed interest rate borrowings was at 76.4%, up from the 73.2% as at Dec 31, 2022.
Cash and cash equivalents stood at $24.6 million as at March 31.
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“FCT has benefitted from the continued recovery following Singapore’s transition to the Covid-19 endemic phase and delivered a very healthy set of results. Despite the headwinds from rising interest rates and operating costs, we saw good traction in lease renewals and signing of new tenants amidst improved retailer sentiments and healthy consumer spending. We also see an increasing trend of consumers prioritising their spending on essential goods and services, which bodes well for FCT’s retail portfolio,” says Richard Ng, CEO of the manager.
“The acquisitions of the 25.5% interest in Nex and additional 10.0% interest in Waterway Point which we completed in February 2023 provide additional growth for FCT going forward. We are also looking at growth opportunities through further acquisitions and asset enhancement initiatives. We believe the suburban retail sector remains an attractive asset class and FCT is well-positioned to thrive in the new normal of the endemic phase,” he adds.
As at 9.43am, units in FCT are trading 3 cents lower or 1.29% down at $2.29.
