Frasers Centrepoint Trust (J69U) H2 2023 earnings summary

Executive summary

• FY2023 gross revenue reached $369.7m and NPI $265.6m, both records; DPU was 12.150 cents, down 0.6% YoY, as higher interest costs offset operating growth.

• Portfolio reconstitution added NEX and increased the Waterway Point stake, while planned disposals of Changi City Point and Hektar REIT were intended to strengthen resilience and reduce leverage.

• Retail operations were strong: committed occupancy reached 99.7%, rental reversion was 4.7%, tenant sales rose 7.3% and shopper traffic increased 24.7% YoY.

Financial highlights

• Gross revenue rose 3.6% YoY to $369.7m; NPI increased 2.7% to $265.6m, supported by higher rents, occupancy, atrium leasing and property tax refunds.

• Property expenses rose 5.9% to $104.1m, mainly on maintenance, utilities and staff costs; net non-property expenses increased 40.3% to $116.5m, primarily from higher financing costs.

• Net income was $149.1m versus $175.6m; total return was $212.0m versus $207.3m, including higher joint-venture results and fair-value gains.

• Basic EPS was 12.42 cents versus 12.18 cents; distributions to unitholders were $207.7m, down 0.2% YoY, and FY2023 DPU was 12.150 cents versus 12.227 cents.

• Portfolio appraised value was $5,545.5m, up 0.5% YoY; total assets increased to $6,375.2m from $5,941.4m, mainly reflecting acquisitions.

Outlook and guidance

• Elevated interest rates and rising operating expenses remain key headwinds; the average cost of borrowings is expected to exceed 4%, with cost optimisation and energy-price hedging planned.

• Outlook for Singapore suburban retail remains positive, supported by population growth, resilient essential spending, demand for prime suburban space and constrained retail supply.

• The $38.2m Tampines 1 AEI was on schedule for completion in Q4 FY2024; projected ROI is ~8%, with over 94% of the new AEI space pre-committed.