Frasers Centrepoint Trust (FCT) was listed on the SGX on 5 July 2006. FCT, at that time, had 3 retail properties valued at $ 915.0 million. Since then, the trust has expanded its portfolio to 6 retail properties worth S$ 2.67 billion as at 30 September 2017. In this article, I’ll list down 10 key things that you need to know about FCT before you invest.
#1: Stock Symbol
Ticker Symbol: SGX: J69U
Market Capitalization: S$ 4.45 billion (18 January 2018)
Share Price: S$ 1.33 (20 January 2018)
#2: The Business
FCT derives income from the following properties:
- Causeway Point
Causeway Point is the largest retail mall in Woodlands, Singapore. In 2017, the property is valued at S$ 1.2 billion, accounting for 44.6% of the value of FCT’s portfolio. It is enjoying a 99.9% in occupancy rate with key tenants such as Metro, Courts, Cold Storage, Food Republic and Uniqlo. In 2017, Causeway Point has generated S$ 84.7 million in gross revenue and S$ 65.5 million in net property income, thus, is the main income contributor to FCT.
- Northpoint City
Northpoint City is the main shopping mall in Yishun, Singapore. The trust also owns 10 strata-titled retail units in Yishun 10 retail podium.
In 2017, they are collectively valued at S$ 772.5 million, amounting to 28.9% of the value of FCT’s portfolio. FCT has recently completed an asset enhancement initiative (AEI) project in Northpoint City. Thus, its occupancy rate has improved from a low of 60.7% in Q2 2017 to as high as 86.8% in Q1 2018 with key tenants such as Kopitiam, Popular Bookstores, McDonald’s, UOB and OCBC. In 2017, Northpoint City has generated S$ 42.0 million in gross revenue and S$ 29.7 million in net property income, thus, is its second largest income contributor.
- Changi City Point
In 2014, FCT has acquired Changi City Point for S$ 305 million. The property is valued at S$ 318 million in 2017, accounting for 11.9% of the value of FCT’s portfolio. It is currently 86.0% occupied with key tenants such as Kopitiam, Uniqlo, Tung Lok, Challenger and Nike. In 2017, Changi City Point has reported S$ 24.5 million in gross revenue and S$ 15.9 million in net property income, making it the third main income contributor to FCT.
- YewTee Point
In 2010, FCT has acquired YewTee Point for S$ 125.7 million. In 2017, this property is valued at S$ 178.0 million, accounting for 6.7% of the value of FCT’s portfolio. It enjoys a 94.4% occupancy rate with main tenants such as NTUC Fairprice, Koufu food court, and Watson’s. In 2017, YewTee Point has made S$ 14.4 million in gross revenue and S$ 10.0 million in net property income, thus, is its fourth largest income contributor.
Anchorpoint is located along Alexandra Road, Singapore and offers a wide range of eateries, retail shopping and boutiques. The property is enjoying a 94.4% occupancy rate with key tenants such as Xing Wang Hong Kong Cafe, Bukang Korean BBQ & Seafood, and Cold Storage. In 2017, the property is valued at S$ 104.6 million, amounting to only 4.0% of its portfolio. It is a smaller property in FCT’s portfolio as the Anchorpoint has generated S$ 8.5 million in gross revenue and S$ 4.6 million in net property income in 2017.
- Bedok Point
In 2011, FCT has acquired Bedok Point for S$ 127 million. By 2017, it is valued at S$ 105 million, accounting for 3.9% of the value of FCT’s portfolio. It enjoys an 85.3% occupancy rate with main tenants such as Harvey Norman, GymmBoxx, Sushi Express and Ssiksin Korea BBQ. In 2017, Bedok Point has made S$ 7.3 million in gross revenue and S$ 3.7 million in net property income.
FCT has achieved growth in gross revenue from S$ 158.0 million in 2013 to S$ 189.2 million in 2015 before dropping to S$ 181.6 million in 2017. The dip in gross revenue was caused by lower revenue reported by Northpoint as it was undergoing renovation and Bedok Point.
FCT has delivered growth in distributable income, up from S$ 90.1 million in 2013 to S$ 110.6 million in 2017. As such, FCT had raised its distribution per unit (DPU) from 10.93 cents in 2013 to 11.90 cents in 2017.
Source: Annual Report 2017 of FCT
Source: Annual Report 2017 of FCT
#4: Major Acquisitions
There is no recent announcements or proposals on any acquisition of new investment properties made by FCT at the point of writing.
#5: Sponsor Strength
Frasers Property Ltd is the sponsor of FCT and it has granted FCT Rights of First Refusal (ROFR) to acquire:
- Northpoint City South Wing
- The Centrepoint
- Robertson Walk
- Valley Point
- Waterway Point (33%)
#6: Lease Profile
As at 31 December 2017, FCT has enjoyed an overall occupancy rate of 92.6% and has weighted average lease expiry (WALE) of 1.80 years.
Source: Investor Presentation – February 2018 of FCT
As I write, FCT is trading at S$ 2.19 a unit.
As at 31 December 2017, FCT has reported having S$ 2.02 in net asset value a unit. Thus, its current P/NAV works out to be 1.08.
FCT adopts a distribution policy to declare and pays out at least 90% of its distributable income on a quarterly basis. The trust has declared and paid 11.90 cents in DPU for 2017. If FCT is able to maintain its DPU at 11.90 cents, its expected gross dividend yield is 5.4%.
#8: Debt Profile
As at 31 December 2017, FCT has S$ 814.0 million in borrowings. Its gearing ratio is 29.4%. Its weighted average debt maturity stands at 2.7 years, Its cost of borrowing averages at 2.4%.
#9: Investor Relations
For further enquiries or to request for additional investment information on FCT’s Investors Relation matters, you may contact:
#10: Major Shareholders
Frasers Property Ltd, its sponsor, is the main unitholder of FCT with 41.86% indirect shareholdings.