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Frasers Centrepoint Trust's Q4 DPU up 5.5%

FRASERS Centrepoint Trust (FCT) posted on Wednesday a 5.5 per cent rise in its distribution per unit (DPU) for the fourth quarter, as higher rental income and improved occupancy at Northpoint City contributed to growth.

For the three months ended Sept 30, 2017, DPU stood at 2.97 Singapore cents, up from 2.815 cents the year before. Full-year DPU was 11.9 cents, up from 11.764 cents a year ago, making it the highest DPU achieved since FCT's listing in 2006.

Net property income for fourth quarter 2017 rose by 10 per cent to S$34.6 million and distributable income was up 6.1 per cent to S$27.5 million compared to fourth quarter 2016. Gross revenue for fourth quarter 2017 was up 8.1 per cent year on year to S$48.2 million.

Frasers Centrepoint Asset Management Ltd (FCAM), the manager of FCT, said in a Singapore Exchange filing that besides the higher rental income and improved occupancy at Northpoint City, growth was lifted by Causeway Point and Changi City Point which registered year-on-year revenue growth of 2.5 per cent and 13.6 per cent, respectively.

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Full-year revenue was 1.2 per cent lower year on year at S$181.6 million due to the planned vacancies in conjunction with the asset enhancement initiatives at Northpoint City's North Wing.

Net property income for full-year 2017 decreased 0.2 per cent to S$129.6 million, while distributable income increased 1.6 per cent to S$109.8 million.

The portfolio occupancy as at Sept 30, 2017 was 92 per cent, higher than the 87.1 per cent registered in the prior quarter. The portfolio shopper traffic in the three-month period between July and September 2017 was 9.9 per cent lower year on year and 5 per cent lower quarter on quarter.

Chew Tuan Chiong, CEO of FCAM, said: "FY2017 was a challenging year, especially with the slower retail market environment and the AEI (asset enhancement initiative) works at NPNW (Northpoint North Wing) which required a lot of attention."

While the general retail sector continues to grapple with structural challenges, such as the growing popularity of e-commerce, "FCT's well-located suburban malls continue to remain resilient", the trust highlighted.

In addition, there are some signs of green shoots, with Singapore's retail sales in August - excluding motor vehicles - rising 3.7 per cent year on year.

"We look forward to a more stable year next year," said the trust's management during its results briefing on Wednesday morning, pointing to positive rental reversions achieved this financial year as well as improvements at Northpoint City North Wing. Mr Chew also added that the group will focus on acquisition strategies to drive further growth for FCT.

An OCBC Investment Research report said on Wednesday that it will be reviewing its "buy" rating and S$2.28 fair value estimate on FCT, which opened at S$2.23 on Wednesday.