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Frasers Centrepoint Trust’s (FCT) distributable income increased by 2.8 percent year-on-year to S$27.91 million for the quarter ended on 31 March (Q2 FY2016), while distribution per unit (DPU) rose to 3.04 cents from 2.96 cents.
However, gross revenue dipped by 0.8 percent to S$47.09 million versus S$47.49 million a year ago, whereas net property income inched up by 0.4 percent to S$33.68 million from S$33.55 million Q2 FY2015.
For the first half of its financial year (1H FY2016), gross revenue slid by 0.5 percent to S$94.16 million on annual basis mainly due to higher vacancy at Northpoint mall, according to a Credit Suisse report.
Nonetheless, net property income edged up 1.2 percent to S$67.22 million following lower utilities and the write back of provisions for property tax.
Distributable income also climbed by 3.6 percent to S$54.25 million from S$52.35 million, while DPU rose to 5.91 cents against 5.71 cents in 1H 2015 as FCT paid out 50 percent of its management fees in units versus 20 percent previously.
While the occupancy rate at FCT’s other malls remained relatively stable, overall portfolio occupancy dropped from 94.5 percent to 92 percent as of 31 March, mainly due to the asset enhancement initiative (AEI) at Northpoint which started last month.
Moreover, the trust has renewed around 49 percent of the total net leasable area (NLA) for leases expiring in FY2016, at an average rental improvement of 12 percent. In 1H 2016, it renewed leases for 136,896 sq ft of space, while about 142,758 sq ft are expected to be renewed by 2H 2016.
Credit Suisse noted that 13.8 percent of the trust’s portfolio is expected to expire during the remainder of the year, mostly in Causeway Point, Northpoint and Changi City Point.
Looking ahead, Northpoint’s AEI is targeted to be completed by September 2017, but its NLA is projected to decline by around 4 percent upon completion.
“While the works have been phased to minimise income disruption, short-term volatility in Northpoint’s rental revenue is anticipated for the next few quarters,” said FTC in an SGX filing.
Credit Suisse shared that the S$60 million-renovation would be conducted in two stages. Phase 1 involves reconfiguration of retail space, relocation of the food court to basement 2, transfer of through block link escalators, as well as upgrading of lifts, toilets, ceiling and common areas.
Phase 2 includes the mall’s integration with Northpoint City, upgrading of common areas and improving the play area on the rooftop, it added.
Image: Artist’s impression of Northpoint CIty.
Nikki De Guzman, Editor at CommercialGuru, wrote this story. To contact her about this or other stories email nikki@propertyguru.com.sg