Frasers Centrepoint Trust (FCT) reported a decent set of 4QFY17 results which met our expectations. Gross revenue rose 8.1% YoY to S$48.2m due largely to improvement at Northpoint City North Wing as the mall is nearing the completion of its AEI. NPI and DPU grew 10.0% and 5.5% YoY to S$34.6m and 2.97 S cents, respectively.

For its full-year performance, FCT saw slightly lower gross revenue of S$181.6m (-1.2%) and this formed 100.5% of our forecast. DPU of 11.90 S cents was another record high for the trust. This represented growth of 1.2% and constituted 100.7% of our full-year projection.

Operationally, FCT’s portfolio occupancy jumped 4.9 ppt QoQ to 92.0% due largely to improvement at Northpoint City North Wing, Changi City Point and Bedok Point. Rental reversions were also robust, coming in at 8.3% for the quarter, and 5.1% for the full-year.

There was, however, still some softness in overall portfolio shopper traffic and tenant sales, which declined 9.9% and 2.0% (period from Jun to Aug 2017) YoY, respectively. We will provide more details after the analyst briefing.

We will be reviewing our BUY rating and S$2.28 fair value estimate on FCT.

Source: OCBC Research - 25 Oct 2017