Fraser Centrepoint Trust revenue up 19% to $27.6mn

FCT puts in place $264 million loan facility to refinance debt expiring in July 2011.

Frasers Centrepoint Asset Management Ltd. (“FCAM”), the manager of Frasers Centrepoint Trust (“FCT”), is pleased to announce distribution per unit (“DPU”) of 1.95 cents for 1Q11 (1 Oct to 31 Dec 2010 period).

1Q11 gross revenue grew 19% y-on-y to $27.6 million, aided by the accretive acquisitions of Northpoint 2 and YewTee Point. 1Q11 net property income similarly rose 17% y-on-y to $18.6 million, even though Causeway Point income was affected by planned refurbishment works, according to a FCT report.

Portfolio occupancy level stands at 92% as at 31 December 2010, as Causeway Point occupancy dipped to 86%. The other malls in the portfolio continue to maintain close to full occupancy. In 1Q11, leases for 3% of the portfolio NLA were signed, achieving average rental reversions of 12% over preceding rents.

In November 2010, FCT signed an agreement with DBS Bank, OCBC Bank and Standard Chartered Bank for a $264 million secured five-year loan facility (“facility”). FCT intends to use the facility to pay down a $260 million debt expiring in July 2011. The facility incurs an interest rate of 95 basis points above the five-year Singapore swap offer rate (“SOR”), which stood at 2.03% as at 31 December 2010. With FCT currently paying interest of 4.12% for the existing debt, the facility is expected to provide substantial interest savings to FCT. In addition, the financial flexibility of FCT will be enhanced as Anchorpoint and Causeway Point will be unencumbered once the existing debt expires. The enlarged Northpoint will be the only property secured under the facility.

Chief Executive Officer of the Manager of FCT, Dr Chew Tuan Chiong said, “The commitment of this agreement allows us to capitalise on the favourable interest rate environment while removing any uncertainty surrounding the refinancing of the expiring CMBS. In addition to significantly lowering our interest costs, it also strengthens our financial flexibility going forward.”

The refurbishment of Causeway Point is proceeding smoothly. With sections of the mall closed to facilitate construction works, the income and occupancy of the mall declined compared to the same period last year. As at December 2010, 13% of the construction works at Causeway Point have been completed, with all works scheduled for completion by December 2012. Retailers continue to show keen interest by pre-committing 92% of the space on level one, where most of the work is currently taking place. When completed, the enhancement initiative will increase the net property income of Causeway Point.

Dr Chew added, “We are pleased to deliver good results in spite of the transitional challenges posed by the refurbishment of Causeway Point. We are excited with the progress made at Causeway Point. Although income is expected to be affected in the short term, the rejuvenated Causeway Point will provide enhanced income sustainability and growth prospects in years to come.”