Frasers Centrepoint Trust's 1H FY24 Result Review

Basic Profile & Key Statistics

• Main Sector(s): Retail
• Country(s) with Assets: Singapore & Malaysia
  
• No. of Properties (exclude development/associate/fund): 10

Key Indicators

Performance Highlight

Gross revenue and NPI have declined YoY due to the divestment of Changi City Point and AEI of Tampines 1. Distribution from joint ventures has improved YoY due to the acquisition of an additional 10% stake in Waterway Point and the acquisition of a 25.5% interest in NEX. Nonetheless, distribution to unitholders and DPU remain similar despite the NPI decline due to higher management fees payable in units. 

Rental Reversion

Retail portfolio rental reversion is at 7.5%. For Central Plaza, the rental reversion is at 2.8%.

Shopper Traffic & Tenant Sales

Both shopper traffic and tenant sales have improved YoY. While shopper traffic is still below the pre-COVID level, tenant sales have continued to surpass the pre-COVID level.

Divestment

FCT divested Changi City Point and shares in Hektar REIT in October and December 2023 respectively. In March 2024, FCT acquired another 24.5% interest in NEX. 

Asset Enhancement Initiative

    

AEI work for Tampines 1 is on track to be completed by September 2024.

Related Parties Shareholding

The sponsor and manager have a relatively high shareholding, while the directors of the REIT manager hold a relatively low proportion of shares.

Lease Profile

The occupancy rate is high, however the WALE is short and there is a concentration of lease expiries in FY26.

Debt Profile

The overall debt profile is within the median range, with a well-spread debt maturity, but a relatively low proportion of unsecured debt.

Diversification Profile

The portfolio is diversified in terms of tenants but exhibits concentration in geographical and property contributions.

Key Financial Metrics

The operating distributable income margin is high but the operating distribution proportion is low. In addition, the management fee is high compared to operating distributable income.

DPU Breakdown

• TTM Distribution Breakdown
• 87.7% from Operation
• 10.9% from Management Fees Paid in Units
• 1.4% from Released of Retention

Trends

• Uptrend: DPU from Operation
• Slight Uptrend: NAV per Unit, Committed Occupancy, Property Yield
• Flat: Operating Distributable Income on Capital
• Slight Downtrend: Operating Distributable Income Margin
• Downtrend: Interest Coverage Ratio

Relative Valuation

• Dividend Yield: Average for 1y, 3y & 5y
• P/NAV: Average for 1y, 3y & 5y

Author's Opinion

Compared to the previous half-year, there has been a decline in gross revenue and NPI due to the divestment of Changi City Point and shares in Hektar REIT. However, DPU remains similar as the manager has further increased the fees payable in units. In terms of debt, no refinancing is required for FY24.

For more information, check out:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and details of Singapore REIT

REIT Review - List of previous REIT review posts

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*Disclaimer: The information presented on this blog is for educational and informational purposes only. The materials, including research and opinions, are based solely on my findings and should not be considered professional financial advice or a definitive statement of fact. I cannot guarantee the accuracy, completeness, or reliability of the information provided. I shall not be held liable for any errors, omissions, or losses that may occur as a result of using the information presented on this blog. It should be noted that the information presented on this blog does not constitute a buy, sell, or hold recommendation for any security. It is crucial to conduct your own thorough research and due diligence before making any investment decisions.