On 25th July 2023, Frasers Centrepoint Trust (FCT) released their 3QFY23 business updates. Since this is just a business update, the highlight was the usual improved operational performance.
Earlier this month, I have accumulated more of Frasers Centrepoint Trust to my stock portfolio. I am glad that occupancy in 3QFY23 has improved. As you can see from the slides above, Shopper traffic and tenant sales have both increased 16% and 5% y-o-y respectively.
There are also new tenants added to its sub-urban malls which I shall share more later below.
Now, let us take a look at what was being shared in Frasers Centrepoint Trust 3QFY23 Business Updates.
As of 30th June 2023, the aggregate leverage stood at 40.2%. This was a slight increase of 0.6% as compared to 39.6% on 31st March 2023.
Average debt maturity also increased from 1.91 years to 2.53 years. The good news here is that refinancing has been completed for FY23.
Retail Portfolio committed occupancy currently stood healthy at 98.7%. This was an increase of 1.6% year-on-year. Having said that, the occupancy at Changi City Point was 6.4% lower, pending documentation of negotiated leases.
As of 30th June 2023, the Weighted Average Lease Expiry (WALE) stood at 1.95 years by Net Lettable Area (NLA). As you can see from the table above, 59 leases are expiring in FY23 which makes up 4.2% of the Gross Rental Income (GRI).
In my opinion, the lease expiry is nothing to be worried about. Given that shopper traffic has return and also most of the assets are sub urban malls, it is not difficult to find a new tenant in the event the existing tenant does not want to renew its leases.
If you live in the Eastern part of Singapore, you would have notice the new tenants such as Coach, ANDES, My Kampung and Anytime Fitness at Changi City Point. Not forgetting, Luckin Coffee has also open its store at Tampines 1.
Current Dividend Yield
Based on the current share price of S$2.19 and FY22 full year distribution of 12.227 cents, the current dividend yield for Frasers Centrepoint Trust is 5.58%.
The current dividend yield for Frasers Centrepoint Trust is decent at 5.58%.
Summary of Frasers Centrepoint Trust 3QFY23 Business Updates
From the business updates, here are the positives I have noted:
- Refinancing has been completed for FY23.
- Retail Portfolio committed occupancy currently stood healthy at 98.7%.
- Refreshed retail offerings.
- Tampines 1 is undergoing Asset Enhancement Initiative (AEI) and will be completed in 3QFY23.
- Current dividend yield for Frasers Centrepoint Trust is decent at 5.58%.
The downside I observed are:
- Higher aggregate leverage of 40.2%. This may continue to increase as Fed is going to increase interest rate once more.
- Occupancy at Changi City Point was 6.4% lower.