Monday, July 26, 2010

Fraser Centrepoint Trust

Fraser Centrepoint Trust: 3QJun10 net property income +46% yoy, aided by new contributions from Northpoint 2 and YewTee Point, and strong recovery in Northpoint post completion of AEI. DPU +7% yoy to 2.07cts, translates to 6% annualized yield, not including the $1.6m accumulated over 9M10 retained for distribution in 4Q10. Occupancy remained strong at 99% on positive rental renewals; expiring leases were renewed at 9% higher…

Catalysts include recently commenced $72m enhancement of Causeway Point to be completed over next 30mths. Mgt expects property’s NPI to increase 22% to $51.5m, and deliver 13% ROI, and guides for minimal impact on DPU as AEI to be done in phases thereby reducing occupancy loss. Bedok Point (NLA 81k sq ft, TOP 2H10), and Changi City Point (NLA 207k sq ft; TOP 2H11), currently owned by FCT’s sponsor, are next on the acquisition pipeline. Stock trades at $1.39 vs $1.24 NAV/unit.

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