FCT posts 0.7% rise in Q1 DPU on higher proportion of management fees paid in units (Amended)

FRASERS Centrepoint Trust (FCT) reported a 0.7 per cent rise in distribution per unit (DPU) to 2.89 Singapore cents for the fiscal first quarter ended Dec 31, 2016, thanks to a higher proportion of management fees that its Reit manager had received in units.

Gross revenue for the quarter slipped 6.4 per cent to S$44.08 million, mainly due to lower contribution from Northpoint which is undergoing renovation works.

Net property income slipped 5.7 per cent to S$31.64 million as the drop from Northpoint, Changi City Point, and Anchorpoint outweighed the increase from Causeway Point, Bedok Point and YewTee Point.

To support the DPU as Northpoint undergoes asset enhancement initiative (AEI), the Reit manager has gradually raised the proportion of management fees it receives in units from 20 per cent before March 31, 2016 to 70 per cent for the quarter ended Dec 31, 2016.

Chew Tuan Chiong, CEO of the Reit manager, said: "The financial position of FCT remains strong with gearing level at 29.7 per cent and we will continue to stay vigilant on capital market conditions and mall operations."

FCT's portfolio occupancy as at Dec 31, 2016 improved to 91.3 per cent from 89.4 per cent in the preceding quarter.

During the quarter, 66 leases accounting for 12.4 per cent of FCT's total net lettable area (NLA) were renewed at an average rental reversion of 6.9 per cent.

Causeway Point, which accounted for 52 per cent of the total NLA of the leases renewed during the quarter, achieved average rental reversion of 10.6 per cent.

For Northpoint, phase one of the AEI is completed. The final phase will begin in the middle of February and is slated to complete on schedule at the end of September.

The Reit manager said it expects the occupancy of Northpoint "to transition through the trough of about 57 per cent and thereafter recover after May 2017".

Amendment note: An earlier version of this article incorrectly stated in the fourth paragraph that the rise in proportion of management fees in units to 70 per cent was for the quarter ended Dec 31, 2017. It is in fact Dec 31, 2016 and the article above has been revised to reflect this.