Frasers Centrepoint Trust reaps the benefits of rental uplift in 4Q12

NPI grew by about 13%.

According to DBS Vickers, FCT’s 4Q12 topline and NPI grew by about 14% and 13% respectively as the REIT continued to reap the benefits of rental uplift at Causeway Point, post AEI works, and the additional contribution from Bedok Point that was acquired in August 2011.

Here's more from DBS:

Rental reversion for the quarter was 8.2% supported by close to 100% occupancy (excluding Causeway Point which is undergoing AEI works). Consequently DPU came at 2.71 ct, putting the full-year DPU at 10.01 cts.

This was 20.3% y-o-y and 5% higher than our FY12 forecast but is in line with street estimates. The outperformance was largely coming due to the better performance for Yew Tee Point and Anchor Point. FCT also took in a revaluation gain of 100.7 m translating to a 8.5% increase in NAV to S$1.53.

The revaluation gain was largely driven by Causeway Point, post AEI works and the improved earning power of Northpoint with a 15 bbp and 40 bbp cap rate seen in Northpoint, Yew Tee Point and Anchorpoint..

Our View
Steady rental positive reversion anticipated. Causeway Point AEI is on track to open at the end of the year and occupancy is expected to improve sequentially going forward.

Meanwhile, c.20% of the portfolio’s NLA will be up for renewal in FY13 with more than half coming from Northpoint and Causeway. Management says that while there is room to further tweak the tenant mix or AEI works at some of the malls, they will be on a smaller-scale basis.

Hence, we believe operations should remain steady, while the reversion coming from causeway point should continue to reap the benefits of the AEI works. Occupancy cost is at 15-16%, a tad higher than a year ago (14-15%).