REIT-TIREMENT - REITs Investing & Personal Finance

REITs investing & personal finance

Tuesday, October 31, 2023

Frasers Centrepoint Trust Review @ 31 October 2023

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 improved slightly YoY due to higher rental, atrium and car park income. Distribution from joint ventures has improved significantly YoY due to the acquisition of an additional 10% stake in Waterway Point and the acquisition of a 25.5% interest in NEX. However, due to an increase in finance costs amounting to S$ 18.84 mil and a lower retention release amount, distributable from operation has declined YoY. Nonetheless, the DPU remains similar as the manager has elected to receive more fees in units in 2H FY23 at S$ 8,06 mil, as compared to 2H FY22 at S$ 3,26 mil.

Rental Reversion

Retail portfolio rental reversion is at 4.7%. For Central Plaza, the rental reversion is at 2.1%.

Shopper Traffic & Tenant Sales

Both shopper traffic and tenant sales are above the 2022 level. While shopper traffic is still below the pre-COVID level, tenant sales have continued to surpass the pre-COVID level.

In August and September, FCT announced the divestment of Changi City Point and interest in Hektar REIT. Both are targeted to be completed by November and December respectively.

Asset Enhancement Initiative

AEI works are carried out in stages where the first batch of AEI units to be opened in December. Overall, the AEI is targeted to be completed in 3Q 2024 (4Q FY24).

Related Parties Shareholding

  • REIT Sponsor's Shareholding: Above median by 20% or more
  • REIT Manager's Shareholding: Above median by 20% or more
  • Directors of REIT Manager's Shareholding: Below median by 20% or more

Lease Profile

  • Occupancy: ± 5% from median
  • WALE: Below median by 20% or more
  • Highest Lease Expiry within 5 Years: Above median by 10% or more; Falls in FY26
  • Weighted Average Land Lease Expiry: ± 10% from median

Debt Profile

  • Gearing Ratio: ± 10% from median
  • Cost of Debt: ± 10% from median
  • Fixed Rate Debt %: Below median by 10% or more
  • Unsecured Debt %: Below median by 10% or more
  • WADM: Below median by 10% or more
  • Highest Debt Maturity within 5 Years: Below median by 20% or more; Falls in FY26
  • Interest Coverage Ratio: ± 10% from median

Diversification Profile

  • Top Geographical Contribution: Above median by 20% or more
  • Top Property Contribution: Above median by 20% or more
  • Top 5 Properties' Contribution: Above median by 20% or more
  • Top Tenant Contribution: Below median by 20% or more
  • Top 10 Tenants' Contribution: Below median by 20% or more

Key Financial Metrics

  • Property Yield: ± 10% from median
  • Management Fees over Operating Distributable Income: Above median by 10% or more; $5.52 distribution for every dollar paid 
  • Operating Distributable Income on Capital: ± 10% from median
  • Operating Distributable Income Margin: Above median by 10% or more
  • Operating Distribution Proportion: ± 5% from median

DPU Breakdown

  • TTM DPU Breakdown
    • 94.1% from Operation
    • 5.6% from Management Fees Paid in Units
    • 0.3% from Released of Retention


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

Relative Valuation

  • Dividend Yield: Above +1SD for 1y, 3y & 5y
  • P/NAV: Below -1SD for 1y, 3y & 5y

Author's Opinion

 Favorable Less Favorable
High REIT Sponsor's ShareholdingLow Directors of REIT Manager's Shareholding
High REIT Manager's ShareholdingShort WALE
High Committed OccupancyConcentrated Lease Expiry
Well Spread Debt MaturityLow Fixed Rate Debt %
Low Top Tenant & Top 10 Tenants' ContributionsLow Unsecured Debt %
High Operating Distributable Income MarginShort WADM
DPU from Operation UptrendHigh Top Geographical Contribution
NAV per Unit UptrendHigh Top Property & Top 5 Properties' Contributions
 Non Competitive Management Fees
 Interest Coverage Ratio Downtrend
 Operating Distributable Income on Capital Downtrend
 Operating Distributable Income Margin Downtrend

Compared to the previous half year, there has been a decline in gross revenue and NPI due to the AEI at Tampines 1. On the bright side, distribution from joint ventures/associates has increased. Despite an increase of S$ 9.6 mil finance costs, DPU has only declined by 1.8% due to the higher amount of management fees payable in units and the release of retention. Excluding management fees payable in units and retention/release, DPU (from operations) declined by 6.8% as compared to the previous half year.  In terms of debt, refinancing for FY24 debt has been completed, therefore, there is no refinancing requirement in the next fiscal year. However, the fixed-rate debt proportion is relatively low at only 63%. 

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.

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