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Frasers Centrepoint Trust's DPU dips for Q3 on lower revenue, enhancement works

FRASERS Centrepoint Trust's (FCT) distribution to unitholders remained flat in the third quarter of 2017, dragged by lower revenue and also due to the ongoing asset enhancement initiative (AEI) works at Northpoint.

In a filing to the bourse operator on Monday, FCT's manager, Frasers Centrepoint Asset Management, said distribution to unitholders for the three months as at end June dipped one per cent year-on-year to S$27.7 million.

This translates to a distribution per unit (DPU) of 3 Singapore cents, down from the 3.04 cents a year ago.

Net property income (NPI) in Q3 was 1.3 per cent lower at S$30.8 million.

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Revenue came in 3.3 per cent lower at S$43.6 million, attributable to AEI at Northpoint, but higher revenue from Causeway Point and additional contribution from Yishun 10 Retail Podium helped to mitigate the decline.

FCT's gearing stood at 30 per cent as at end June and the weighted average debt maturity improved to 2.6 years from 2.4 years in the previous quarter. It said the all-in average cost of borrowings in Q3 2017 was 2.2 per cent, unchanged from the previous quarter.

The trust added that it has about 55 per cent of its borrowings on fixed or hedged-to-fixed interest rates. Net asset value as at end June was $1.92 per unit and FCT said it has no refinancing needs for the remaining period in FY17.

Said FCT in its outlook: "Excluding motor vehicles, retail sales index increased 0.6 per cent year-on-year in May 2017. The asset enhancement works at Northpoint are proceeding on schedule and are expected to complete by September 2017. More than 90 per cent of the reconfigured areas have been pre-committed. Although the general retail sector continues to face structural challenges, FCT's suburban malls are generally expected to remain resilient."