Frasers Centrepoint Trust - OCBC Investment 2023-04-27: Solid Uplift In Operating Metrics

• Frasers Centrepoint Trust (SGX:J69U)’s 1HFY23 gross revenue and net property income (NPI) rose 6.5% and 5.7% y-o-y to S$187.6m and S$138.0m, respectively, with all portfolio properties contributing positively to this growth. However, due to higher finance costs, DPU was mildly lower by 0.1% y-o-y to S$0.0613.
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• The S$3m of income that was retained in 1HFY23 will be distributed to unitholders in 2HFY23.

Portfolio committed occupancy rose to 99.2%; healthy positive rental reversions

• Frasers Centrepoint Trust’s retail portfolio committed occupancy rate increased by 0.8 percentage points (ppt) q-o-q to a high level of 99.2%, with a strong boost from Century Square (+8.1 ppt q-o-q to 96.8%) due to the signing of a new cinema operator Cathay Cineplexes, although its opening will only happen in Oct 2023.
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• Frasers Centrepoint Trust’s retail portfolio tenants’ sales and shopper traffic grew 9.2% and 35.3% y-o-y, respectively, in 1HFY23. The former came in at 14%, 15% and 9% above 2019 levels for the months of Jan, Feb and Mar 2023, respectively. The increase in tenants’ sales, coupled with positive rental reversions, helped to drive down Frasers Centrepoint Trust’s occupancy costs to below 16% (FY22: 16.2%).

Aggregate leverage ratio increased to 39.6% due to drawdown of loans for acquisitions

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OCBC Research Team OCBC Investment Research | https://www.iocbc.com/ 2023-04-27 SGinvestors.io

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