annual report 2017
Strength
to Strength
Top: Causeway Point
Above left: YewTee Point
Above right: Northpoint City North Wing
STRENGTH
TO STRENGTH
Beyond providing physical space, a building represents the successful
combination of thoughtful design, curated experiences, and respectful
stewardship. Like a blueprint, these form the foundation of a building.
For this year’s annual report design, the Frasers Centrepoint group of
companies chose to feature line drawings of our key properties – a
symbolic representation of our role as designer, curator and steward,
not only of our properties, but also of our group. It represents our
continuous eff orts to build on solid foundations to transform our
blueprints of growth for the group into reality for our stakeholders.
Frasers Centrepoint Trust (FCT) continues to build on the momentum
from last year’s milestone decade of growth, paving the way forward
with a solid track record of DPU growth since our IPO – a distinctive
achievement for SREITs. This is attributed to our resilient growth
strategies and steady portfolio of high-quality retail malls.
As we grow from strength to
strength, FCT will remain focused
on optimising the performance
and returns of our assets to
ensure that they remain relevant
to shoppers and tenants. We will
also build on our strong fi nancial
position to pursue organic growth
opportunities, with the aim of
delivering greater returns to all
unitholders.
FRASERS CENTREPOINT TRUST
1
RISK MANAGEMENT, SUSTAINABILITY AND
CORPORATE GOVERNANCE
65
68
94
Risk Management
Sustainability Report
Corporate Governance Report
FINANCIALS
118
Financial Statements
OTHERS
177
181
182
Statistics of Unitholdings
Additional Information
Notice of Annual General Meeting
Proxy Form
CONTENTS
OVERVIEW
03
04
05
06
10
12
14
18
22
23
24
About Frasers Centrepoint Trust
Structure of FCT and Organisation
Structure of the Manager
FCT Business Strategy
FY2017 Highlights and Key Events
5-Year Performance at a Glance
and Financial Highlights
Unit Price Performance
Letter to Unitholders
Board of Directors
Trust Management Team
Property Management Team
Investor Relations
BUSINESS REVIEW
28
36
38
Operations & Financial Review
Capital Resources
Retail Property Market Overview
ASSET PORTFOLIO
48
50
52
54
56
58
60
62
63
FCT Portfolio Overview
Causeway Point
Northpoint City North Wing
and Yishun 10 Retail Podium
Changi City Point
Bedok Point
YewTee Point
Anchorpoint
Mall Directory
Investment in Hektar REIT
2 ANNUAL REPORT 2017
ABOUT FRASERS CENTREPOINT TRUST
Frasers Centrepoint Trust (“FCT”)
is a Singapore-domiciled retail real
estate investment trust (“REIT”).
FCT was listed on the mainboard
of the Singapore Exchange
Securities Trading Limited (SGX-ST)
on 5 July 2006. FCT has a market
capitalisation of approximately
S$1.95 billion as at 29 September
2017.
FCT’s principal activity is to invest
in income-producing properties
used primarily for retail purposes,
in Singapore and overseas. Its
primary objectives are to deliver
regular and stable distributions to
unitholders and to achieve long-
term capital growth. The objectives
are achieved through a combination
of its organic, enhancement and
acquisition growth strategies. FCT
also owns a 31.15% equity stake in an
associate of FCT, Hektar Real Estate
Investment Trust, which is listed on
the Main Market of Bursa Malaysia
Securities Berhad.
FCT’s portfolio comprises six
quality suburban malls in Singapore
with a total appraised value of
$2.67 billion as at 30 September
2017. These malls are Causeway
Point, Northpoint City North Wing
(including Yishun 10 retail podium),
Changi City Point, Bedok Point,
YewTee Point and Anchorpoint.
FCT’s suburban malls are located in
residential areas with good shopper
catchment and connectivity to
public transport, and they off er the
shoppers a wide range of products
and services that cater to their
convenience, necessity shopping
needs and dining options. The malls
enjoy high occupancy and steady
shopper traffi c which underpin
the stability of FCT’s net property
income.
FCT has achieved steady
portfolio growth and delivered
stable distribution returns to
unitholders through prudent capital
management and successful
execution of its growth strategies. Its
total assets grew from S$938 million
at its initial public listing to S$2.75
billion as at 30 September 2017. The
distribution per unit to unitholders
also grew steadily to 11.90 cents in
FY2017 at a compounded annual
growth rate of 6.4% over the eleven
years since its listing.
FCT is managed by the Manager
of FCT, Frasers Centrepoint Asset
Management Ltd., a real estate
management company and a
subsidiary of Frasers Centrepoint
Limited.
OUR UNIFYING IDEA
Experience matters.
We believe our customers’
experience matters.
When we focus on our customers’
needs we gain valuable insights
which guide our products and
services. We create memorable
and enriching experiences for our
customers.
We believe our experience matters.
Our sponsor’s legacy is valuable
and inspires our approach. We
bring the right expertise to create
value for our customers. We
celebrate the diversity of our staff
and the expertise they bring, and
we commit ourselves to enabling
their professional and personal
development.
Causeway Point
FRASERS CENTREPOINT TRUST
3
STRUCTURE OF
FRASERS CENTREPOINT TRUST
UNITHOLDERS
Holdings of Units in
Frasers Centrepoint Trust
Distributions
MANAGER
Frasers Centrepoint
Asset Management Ltd.
Management
Services
Management
Fees
Acts on behalf
of Unitholders
Trustee
Fees
TRUSTEE
HSBC Institutional Trust
Services (Singapore)
Limited
PROPERTY MANAGER
Frasers Centrepoint
Property
Management Services
Pte. Ltd.
Property
Management
Services
Property
Management
Fees
Ownership
of Assets
Net Property
Income
FCT PORTFOLIO
Causeway Point
Northpoint City North Wing,
including Yishun 10 retail podium
Changi City Point
Bedok Point
YewTee Point
Anchorpoint
ORGANISATION STRUCTURE
OF THE MANAGER
THE MANAGER
FRASERS CENTREPOINT ASSET MANAGEMENT LTD
THE BOARD OF DIRECTORS
NOMINATING AND REMUNERATION COMMITTEE
AUDIT COMMITTEE
CHIEF EXECUTIVE OFFICER
ASSET MANAGEMENT
FINANCE
INVESTMENTS
INVESTOR RELATIONS
4 ANNUAL REPORT 2017
FCT BUSINESS STRATEGY
FCT’s investment objectives are to own and to invest in income-producing properties or properties that could
be developed or redeveloped into income-producing properties, used primarily for retail purposes, in Singapore
and overseas. Frasers Centrepoint Asset Management Ltd. (FCAM), the Manager of FCT, is responsible for FCT’s
investment and fi nancing strategies, asset acquisition and disposition and for the overall management of FCT’s
portfolio of investment properties.
FCAM’s key objectives are to deliver regular and stable distributions to Unitholders and to achieve long-term growth
in the net asset value per Unit so as to provide Unitholders with a competitive rate of return for their investments.
FCAM’s strategies to achieve growth for FCT are as follows:
ACQUISITION
GROWTH STRATEGY
ENHANCEMENT
GROWTH STRATEGY
ORGANIC GROWTH
STRATEGY
This includes change of
confi guration and layout of the
properties to achieve better
asset yield and sustainable
income growth; and to achieve
value creation through Asset
Enhancement Initiative (AEI) to
improve the income producing
capability of the properties.
Identifying and pursuing growth
opportunities via acquiring
additional income-producing
properties and properties that could
be developed or redeveloped into
income-producing properties. The
acquisitions should meet FCT’s
investment objectives to enhance
yields and returns for Unitholders
while improving portfolio
diversifi cation. The acquisition
opportunities includes Sponsor’s
pipeline assets and 3rd party assets,
in Singapore and overseas.
Active lease management to
achieve positive rental reversions,
maintaining healthy portfolio
occupancy to provide steady rental
growth.
FCAM adopts prudent capital and risk management strategies in its course of business:
CAPITAL MANAGEMENT
RISK MANAGEMENT
FCAM continues to maintain a prudent fi nancial
structure and adequate fi nancial fl exibility to ensure that
it has access to capital resources at competitive cost.
FCAM proactively manages FCT’s cash fl ows, fi nancial
position, debt maturity profi le, costs of capital, interest
rates exposure and overall liquidity position.
Eff ective risk management is a fundamental part of
FCT’s business strategy. Key risks, mitigating measures
and management actions are continually identifi ed,
reviewed and monitored by management as part of
FCAM’s enterprise-wide risk management framework.
Recognising and managing risks are central to the
business and to protecting Unitholders’ interests.
FRASERS CENTREPOINT TRUST
5
FY2017 HIGHLIGHTS
STRONG FINANCIAL PERFORMANCE
• FY2017 Distribution per
unit (DPU) up 1.2% to
historical high of 11.9
cents, achieving 11th
consecutive year of
steady DPU growth.
• Net asset value up 4.7%
to historical high of
S$2.02 per Unit.
• Net property income
held steady at $129.6
million.
• Total appraised value
of portfolio at $2,668.1
million, up from $2,509.0
million a year ago, driven
mainly by increase in
valuations of Causeway
Point and Northpoint
City North Wing.
MAINTAINING ROBUST FINANCIAL POSITION
• Maintains low gearing
• Strengthened capital
• Healthy interest cover of
level at 29.0%.
• Maintains low average
cost of borrowing at
2.3%.
structure with issuance
of 2 new tranches of
bonds of totalling S$120
million in FY2017.
• Healthy debt maturity at
2.3 years.
6.85 times.
• Maintains investment
grade credit ratings at
BBB+ (S&P) and Baa1
(Moody’s) with stable
outlook.
IMPROVED OPERATIONAL PERFORMANCE
•
Improved portfolio
occupancy at 92.0%, up
from 89.4% a year ago.
• Healthy weighted
average lease expiry
(by net lettable area) of
1.82 years.
• Positive portfolio average
rental reversion of 5.1%
for FY2017.
• Renewed 27.7% of the
leases (by net lettable
area) in FY2017,
well-spread out lease
maturity profi le from
FY2018 – FY2022.
6 ANNUAL REPORT 2017
ACQUISITION AND ASSET
ENHANCEMENT INITIATIVE (AEI)
• Completed the acquisition of
10 strata-titled retail units at Yishun 10
retail podium for $37.75 million on
16 November 2016.
• Completed the $60 million AEI project
for Northpoint City North Wing on time
and within budget.
STRENGTHENING OUR CORPORATE GOVERNANCE
• New Board Members – Mr Simon Ho
and Mr Ho Chai Seng joined the Board
as non-executive and independent
directors. Mr Bobby Chin stepped down
as non-executive and independent
director after 11 years of service on
the Board.
• As at 30 September 2017, at least 50% of
the Board of Directors of the Manager
are Independent Directors.
PUSHING ON WITH OUR SUSTAINABILITY EFFORTS
• Achieved 7.2% and
2.0% year-on-year
improvement in
average building energy
and water intensity,
respectively, for the
properties in our
portfolio.
• Maintains zero incidents
of non-compliance with
relevant codes, laws and
regulations.
• Achieved Water Effi cient
Building certifi cations
awarded by PUB for all
our properties.
• Maintains zero incidents
of safety-related non-
compliance.
• Employees of the
Manager received an
average of 66.6 hours of
training per employee in
FY2017, exceeding target
of 40 hours per year.
FRASERS CENTREPOINT TRUST
7
KEY EVENTS
2017
JANUARY 2017
APRIL 2017
JULY 2017
FCT held its 8th Annual General
Meeting on 20 Jan 2017 and all
resolutions proposed were duly
passed.
Issued S$90 million 2.365%
Notes Due 2020 under the
S$1Billion Multicurrency MTN
Programme.
FCT announced its results for
1Q17, with 1Q17 DPU up 0.7% to
2.89 cents.
Announcement of 2Q17
fi nancial results, with 2Q17 DPU
held steady at 3.04 cents.
FEBRUARY 2017
JUNE 2017
Announcement of the
appointment of
Mr Simon Ho Chee Hwee
as Non-Executive and
Independent Director.
Establishment of S$3 Billion
Multicurrency Debt Issuance
Programme.
Issued S$30 Million 2.645%
Notes due 2022 under the
S$1 Billion Multicurrency MTN
Programme.
Announcement of the
appointment of Mr Ho Chai
Seng as Non-Executive and
Independent Director and the
changes in the composition of
Board Committees.
Announcement of 3Q17
fi nancial results, with 3Q17 DPU
at 3.0 cents.
Announcement of cessation
of Mr Bobby Chin as
non-executive and
independent director, and
changes to the composition of
Board Committees. Mr Simon
Ho Chee Hwee appointed as
Chairman of Audit Committee,
succeeding Mr Bobby Chin.
AUGUST 2017
FCT subscribed for its full
allocation in the rights issue
of its associate company
Hektar REIT.
FCT won the Gold Award for
the Best Retail REIT (Singapore)
at the Asia Pacifi c Best of the
Breeds REITs Awards 2017.
OCTOBER 2017
FCT announced its FY2017
fi nancial results, with full year
DPU up 1.2% to 11.9 cents.
2016
OCTOBER 2016
NOVEMBER 2016
FCT announced its FY2016 fi nancial results, with
full year DPU up 1.3% to 11.764 cents.
FCT announced on 4 November the acquisition
of Yishun 10 retail podium for S$37.75 million. The
acquisition was completed on 16 November.
FCT won the Best Sustainable Growth REIT in Asia at
the Fortune Times REITs Pinnacle Awards 2016.
8 ANNUAL REPORT 2017
FRASERS CENTREPOINT TRUST
9
5-YEAR PERFORMANCE AT A GLANCE
REVENUE
S$ million
189.2
183.8
181.6
NET PROPERTY INCOME
S$ million
131.0
129.9
129.6
168.8
158.0
118.1
111.6
FY2013
FY2014
FY2015
FY2016
FY2017
FY2013
FY2014
FY2015
FY2016
FY2017
DISTRIBUTION PER UNIT
S cents
11.608
11.90
11.764
11.187
10.93
NET ASSET VALUE PER UNIT
S$
2.02
1.91
1.93
1.85
1.77
FY2013
FY2014
FY2015
FY2016
FY2017
FY2013
FY2014
FY2015
FY2016
FY2017
TOTAL ASSET
S$ million
2,134.5
2,521.8
2,548.7
2,594.5
2,750.9
GEARING
%
27.6%
29.3%
28.2%
28.3%
29.0%
FY2013
FY2014
FY2015
FY2016
FY2017
FY2013
FY2014
FY2015
FY2016
FY2017
10 ANNUAL REPORT 2017
5-YEAR FINANCIAL HIGHLIGHTS
DISTRIBUTION PER UNIT BY QUARTERS
S cents
FY2013
10.93
FY2014
11.187
FY2015
11.608
FY2016
11.764
FY2017
11.90
2.98
2.85
2.70
2.40
2.50
3.022
2.88
2.785
2.75
2.963 3.036
2.859
2.87
3.039 3.04
2.815
3.04 3.00 2.97
2.89
FY2013
FY2014
FY2015
FY2016
FY2017
Q1
Q2
Q3
Q4
Group
For the Financial Year ending 30 September
FY2013
FY2014
FY2015
FY2016
FY2017
Selected Income Statement and Distribution Data ($‘000)
Gross Revenue
Net Property Income
Distributable Income
157,959
168,754
189,242
183,816
181,595
111,590
118,096
131,043
129,852
129,558
90,131
95,442
106,412
108,101
110,615
Selected Balance Sheet Data ($ million)
Total Assets
Total Borrowings
Net Assets
2,134.5
2,521.8
2,548.7
2,594.5
2,750.9
589.0
739.0
718.0
734.0
798.0
1,462.4
1,698.7
1,754.5
1,775.6
1,872.2
Value of Investment Properties1
2,019.5
2,400.0
2,464.0
2,509.0
2,668.1
Other Financial Indicators
Distribution per Unit (cents)
Net Asset Value per Unit ($)2
Ratio of Total Borrowings to Total Assets (Gearing)
Interest Coverage (Times)
Market Capitalisation (S$ million)
10.93
1.77
27.6%
6.15
11.187
11.608
11.764
1.85
29.3%
6.20
1.91
28.2%
6.61
1.93
28.3%
7.33
11.90
2.02
29.0%
6.85
1,521.0
1,725.6
1,746.6
2,021.2
1,946.4
1
2
The investment properties are: Causeway Point, Northpoint City North Wing (including Yishun 10 retail podium), Anchorpoint, YewTee Point,
Bedok Point and Changi City Point.
Includes the distribution to be paid for the last quarter of the Financial Year.
FRASERS CENTREPOINT TRUST
11
UNIT PRICE PERFORMANCE
FCT UNIT PRICE PERFORMANCE
FCT unit price closed at $2.11 on 29 September 2017
(being the last trading day of the month), this is about
4% lower than the closing price of $2.20 a year ago.
Comparatively, the FTSE Straits Times Index and
the FTSE REIT Index increased 12.21% and 4.36%,
respectively during the same period.
COMPARATIVE 1 YEAR PRICE TRENDS
Base = 100
120
115
110
105
100
95
90
85
80
FSSTI
112.2127
FTSE REIT
104.3614
FCT
95.9091
Sep ‘16 Oct ‘16 Nov ‘16 Dec ‘16 Jan ‘17 Feb ‘17 Mar ‘17 Apr ‘17 May ‘17 Jun ‘17
Jul ‘17 Aug ‘17 Sep ‘17
Source: Bloomberg
FCT Unit Price
FTSE REIT Index
FTSE Straits Times Index (FSSTI)
TOTAL RETURNS COMPARISON
FCT’s 1 year total return for the period 1 October 2016
to 30 September 2017 was 1.47%, as compared to total
return of the FTSE Straits Times Index at 15.98% and the
FTSE REIT Index at 10.88%. Over a longer time horizon,
FCT delivered total return of 32.89% and 55.19%
over 3-year and 5-year periods, respectively,
outperforming both the FTSE Straits Times Index and
the FTSE REIT index.
1 Year
1 Oct 2016 to 30 Sep 2017
3 years
1 Oct 2014 to 30 Sep 2017
5 years
1 Oct 2012 to 30 Sep 2017
Price Change
%
Total Return
%
Price Change
%
Total Return
%
Price Change
%
Total Return
%
-4.09%
4.36%
12.21%
1.47%
10.88%
15.98%
11.94%
7.29%
-1.73%
32.89%
29.61%
9.21%
16.57%
7.57%
5.21%
55.19%
46.13%
24.08%
FCT
FTSE REIT Index
FTSE Straits Times
Index
Source: Bloomberg
FCT MONTHLY TRADING PERFORMANCE IN FY2017
FCT’s trading volume and the unit closing price for
each month in FY2017 is shown in the chart “Trading
Performance in FY2017” on page 13. The unit price
increased from $1.90 in December 2016 to about $2.11
in March 2017, and remained relatively stable at between
$2.11 and $2.14 during the March to September 2017
period. The average daily trading volume in FY2017 was
about 1 million units, which is about 5% higher than the
same period in the previous year.
12 ANNUAL REPORT 2017
TRADING PERFORMANCE IN FY2017
Total Volume traded for the month
(million Units)
Closing Price as at last trading day of the month
(S$)
2.08
26.2
80
70
60
50
40
30
20
10
0
2.11
2.11
2.12
2.14
2.10
2.11
2.11
2.00
2.00
1.95
33.5
1.90
20.7
19.6
15.8
17.9
19.3
12.5
26.9
25.1
18.2
18.8
2.2
2.1
2.0
1.9
1.8
1.7
1.6
Oct ‘16 Nov ‘16 Dec ‘16
Jan ‘17
Feb ‘17
Mar ‘17
Apr ‘17 May ‘17
Jun ‘17
Jul ‘17
Aug ‘17
Sep ‘17
Source: Bloomberg
The table below shows the historical trading information of FCT units in the past fi ve fi nancial years.
Opening price (S$)
Closing price (S$)
Highest closing price (S$)
Lowest closing price (S$)
Total volume traded (million Units)
Average daily trading volume (million units)
Market capitalisation1 (S$ billion)
Source: Bloomberg
1
Based on the closing price and issued Units as at 30 September.
FY2013
FY2014
FY2015
FY2016
FY2017
1.815
1.845
2.320
1.765
280.3
1.120
1.521
1.845
1.885
2.000
1.660
306.4
1.211
1.726
1.885
1.905
2.150
1.850
312.5
1.265
1.747
1.905
2.200
2.210
1.800
239.4
0.950
2.021
2.200
2.110
2.190
1.870
254.5
1.014
1.946
COMPARATIVE YIELDS - FCT OFFERS ATTRACTIVE YIELD RETURN COMPARED TO OTHER INVESTMENTS
FCT’s distribution per unit (DPU) yield stood at 5.64%2
as at 30 September 2017, this is higher compared to
the yields of the FTSE Straits Times Index, CPF Ordinary
Account interest rate, the 12-month fi xed deposit rate
and the 5 & 10 year Singapore Government Bond yields.
FCT’s DPU yield spread over the 10-year Government
bond yield is 349 basis points.
5.64%
3.16%
Yield spread of 349 basis points
2.50%
2.15%
1.65%
0.33%
FCT DPU Yield
Straits Times Index
12-month yield
CPF Ordinary
Account Interest
Rate
10-year Singapore
Government Bond
Yield
5-year Singapore
Government Bond
Yield
12 month Singapore
Bank Fixed Deposit
Rate
Sources: Bloomberg, Central Provident Fund (CPF) website
2 Based on the distribution per unit (DPU) of 11.9 cents for the period 1 October 2016 to 30 September 2017 and the closing unit price of S$2.11 on
29 September 2017.
FRASERS CENTREPOINT TRUST
13
Gearing level at
29.0% is one
of the lowest
among its S-REIT
peers.
Revenue for FY2017 was $181.6 million,
1.2% year-on-year lower due mainly to the
planned vacancies in conjunction with the
asset enhancement initiative (AEI) works
at Northpoint City North Wing (Northpoint
NW). Lower property expenses helped to
keep the net property income (NPI) relatively
unchanged at $129.6 million. Causeway
Point, our largest property, did most of the
heavy lifting in NPI contribution. Causeway
Point’s NPI grew 5.7% and accounted for
50.6% of the total portfolio NPI. Changi City
Point also saw a good 3.7% increase in its
NPI on improved rental rates from lease
renewals and higher average occupancy.
NPI from Northpoint NW was 14.8%1 down
year-on-year due to the AEI which started in
March 2016. With the completion of the AEI,
Northpoint NW’s performance will continue
to pick up progressively, as occupancy
improves and rental income recovers.
STRONG FINANCIAL POSITION
FCT’s fi nancial position remains strong with
gearing level at 29.0% as at 30 September
2017, one of the lowest among its S-REIT
peers listed on the SGX-ST. The all-in
average cost of borrowings was 2.3% and
the weighted average debt maturity was
2.3 years. We have currently about 55% of
the borrowings on fi xed or hedged-to-fi xed
interest rates. We will continue to remain
prudent in our capital management and
monitor the interest rate environment
with vigilance.
portfolio value lifted the NAV of FCT to
$2.02 per unit, from $1.93 per unit
a year ago.
IMPROVED PORTFOLIO OCCUPANCY,
POSITIVE RENTAL REVERSIONS
The portfolio occupancy as at 30 September
2017 was 92.0%, higher than the 89.4%
a year ago. The increase came mainly
from Northpoint NW, which improved its
occupancy to 81.2%2 from 70.9% as the
AEI moved towards completion; and from
Changi City Point, which saw its occupancy
increased to 88.5% from 81.1% with new
tenants commencing their leases during the
year.
During the year, a total of 186 leases
accounting for nearly 300,000 square feet or
27.7% of FCT’s total net lettable area (“NLA”)
were renewed at an average rental reversion
of +5.1%, a commendable performance
given the current slow retail environment.
Causeway Point, which accounted about
53% of the total NLA renewed, achieved
a healthy positive rental reversion of
7.7%. Other malls including Northpoint
NW, Changi City Point and YewTee Point
registered positive rental reversions, while
Anchorpoint and Bedok Point registered
negative rental reversions of 0.9% and 21.3%,
respectively.
SHOPPER TRAFFIC AND
OCCUPANCY COST
HIGHER VALUATIONS LIFTED NAV
TO $2.02 PER UNIT
Total appraised value of FCT’s portfolio of
properties as at 30 September 2017 stood
at $2,668.1 million, some $159 million
higher than the $2,509.0 million recorded
a year ago. The increase was due to the
higher appraised values of several of FCT
properties, particularly Causeway Point
and Northpoint NW, as well as the addition
of Yishun 10 retail podium acquired in
November 2016. The higher appraised
The portfolio shopper traffi c in FY2017 was
98.4 million, this is about 3.6 million or 3.5%
lower year-on-year. The lower traffi c was
traced mainly to the 3.9 million or 8.6% drop
in shopper traffi c at Northpoint NW due to
the AEI works. Excluding Northpoint NW,
the aggregate shopper traffi c at the other
properties would have been 0.5% higher
year-on-year.
Overall portfolio tenants’ sales in FY2017
were 5.7% lower year-on-year. All malls
saw a decline in sales volume. Northpoint
1
2
Excludes contribution from Yishun 10 retail podium as property was acquired in November 2016.
Excluding Yishun 10 retail podium.
FRASERS CENTREPOINT TRUST
15
LETTER TO UNITHOLDERS
Northpoint City North Wing
our malls to provide sustainable income
growth for FCT. This most recent endeavour,
budgeted at $60 million, comprised
upgrading of the amenities, re-confi guration
of mall layout as well as to integrate with
the Northpoint City South Wing3 to provide
shoppers with seamless connectivity
between the two retail wings, the Yishun
MRT station and the bus interchange.
Concurrently we have also introduced
many exciting new food and beverage (F&B)
brands, restaurants and retailers.
We project the average rental per square
foot of NLA of Northpoint NW to improve
by about 9% after stabilisation post-AEI.
Although the increase in rental income
for the property will be partially off set by
a reduction of NLA of about 7.5%, the AEI
is expected to deliver positive return on
investment and more importantly, to bring
about long-term benefi ts for FCT and its
unitholders.
FOCUS ON CONTINUOUS IMPROVEMENT
TO DRIVE FURTHER GROWTH
The Singapore Government has forecast
Singapore’s economy to grow by 3.0 to 3.5%
in 2017, and 1.5 to 3.5% in 2018. This bodes
well for the retail sector even as the sector
transforms itself to respond to manpower
shortage and omni-channel-shopping.
As we commence the new fi nancial year
2018 on a strong footing, we remain
focused on continuous improvement in the
fi nancial performance of FCT, on acquisition
and AEI strategies to drive further growth
and on optimising the performance of
our portfolio to underpin organic growth.
Prospects for acquisition include existing
and future retail properties in the sponsor’s
portfolio, as well as other opportunities
arising within Singapore and overseas.
NW in particular, registered 15.2% lower
tenants’ sales year-on-year caused mainly
by the AEI works. Excluding Northpoint
NW, the average decline in tenants’ sales
for the other fi ve malls was about 3.4%.
The portfolio occupancy cost, which is the
ratio of gross rent to the tenants’ sales, was
16.6% in FY2017. This is higher compared
with 15.7% in FY2016 and 15.3% in FY2015.
We monitor the occupancy cost of each
mall carefully and will adjust our leasing and
tenant mix strategies to maintain sustainable
growth for our portfolio and to keep our
malls competitive.
REJUVENATED NORTHPOINT CITY
NORTH WING
Eighteen months since the start in
March 2016, the AEI at Northpoint NW
is successfully completed, on schedule
and within budget. As usual, this was
accomplished through the dedication and
diligence of all the Frasers team and partners
involved in the AEI. AEIs form part of our
overall strategy to periodically upgrade
3 Northpoint City South Wing is 100%-owned by FCT’s sponsor, Frasers Centrepoint Limited.
16 ANNUAL REPORT 2017
SUSTAINABILITY REPORTING
Sustainability is an important aspect of
FCT’s long-term business strategy. Our
Sustainability Report, which forms part
of this Annual Report, is a testament of
our commitment to sustainability in our
business activities, our sector and the local
communities. Our approach and strategy
are aligned with the Frasers Centrepoint
Group and we are committed to supporting
the sustainability eff orts and initiatives
spearheaded by the Group.
ACCOLADES
FCT received two awards in FY2017, namely
the Best Sustainable Growth REIT in Asia at
the Fortune Times REITs Pinnacle Awards
and the Gold Award for the Best Retail
REIT (Singapore) at the Asia Pacifi c Best
of the Breeds REITs Awards. These awards
are in recognition of FCT’s excellence
in its operational performance, capital
management, risk management and
corporate governance, and fulfi lling investor
expectations.
EXPANDING OUTREACH TO INVESTORS
We devote appreciable amount of
management time and resources to engage
the investment community globally. During
the year, our management met with 235
institutional investors (FY2016: 289). This is
achieved through one-on-one meetings,
non-deal road shows (NDRs), post-results
luncheon and participation in investor
conferences, both locally and overseas.
The investors generally view FCT favourably
because of its established track record in
DPU, steady growth prospects, attractive
total return, good corporate governance and
transparent management. We will expand
our outreach to new institutional investors
and work towards growing and diversifying
our unitholder base.
We continue to enjoy a strong base of
research coverage. There are currently 17
equity research houses covering FCT, of
which 12 of them hold positive views on the
stock.
ACKNOWLEDGEMENTS
Mr Bobby Chin stepped down from the
Board on 31 July 2017 as non-executive
and independent director as part of the
board renewal process. He has also
relinquished his roles as Chairman of the
Audit Committee and a member of the
Nominating and Remuneration Committee.
To Mr Chin who has served since the
inception of FCT in 2006, the Board
expresses its deep appreciation for his
invaluable contributions.
We welcome Mr Simon Ho Chee Hwee
and Mr Ho Chai Seng who joined the
board this year as non-executive and
independent directors. Both have been
appointed as members of the Nominating
and Remuneration Committee. Mr Simon Ho
is also appointed the Chairman of the Audit
Committee on 31 Jul 2017, succeeding
Mr Bobby Chin.
In closing, we thank our fellow board
members for their stewardship in guiding
FCT forward. We would also like to thank the
management and staff for their dedication
and relentless hard work. Finally, we express
our gratitude to our unitholders, business
partners, tenants and shoppers for their
continued support.
MR PHILIP ENG
Chairman
DR CHEW TUAN CHIONG
Chief Executive Offi cer
22 December 2017
FRASERS CENTREPOINT TRUST
17
PROPERTY MANAGEMENT TEAM
MS STEPHANIE HO
General Manager, Retail Properties
Stephanie oversees the operational
management of nine Frasers
Centrepoint Malls, including six
malls in the portfolio of Frasers
Centrepoint Trust. Stephanie has
more than 25 years of experience
in retail mall management and
consultancy. Prior to joining Frasers
Centrepoint Limited in November
2016, she was with AsiaMalls
Management Pte Ltd for over 12
years and has held various positions
including Senior Manager for
group leasing, General Manager,
Deputy CEO and Executive Director.
Stephanie started her career with
Jones Lang Wootton and had
worked for the retail brand Puma,
and at DTZ Debenham Tie Leung in
the fi eld of retail consultancy and
marketing. Stephanie holds a degree
in Bachelor of Arts from the National
University of Singapore, majoring in
Political Science and Economics.
MS SEE SAN SAN
Head, Leasing
San San heads the leasing function
across ten malls in the FCL Group
and she has more than 25 years of
work experience. Prior to this, San
San was Assistant General Manager
of Marina Centre Holdings (MCH)
where she was responsible for
marketing/leasing the shopping
mall, leisure-plex and offi ce block
at Marina Square, Singapore’s third
largest shopping mall.
Prior to joining MCH, San San
gained extensive marketing and
management experience in the
retail, industrial and residential
sector working for Jones Lang
Wootton, Colliers Jardine, and
Colliers Goh & Tan. San San
holds a Bachelor Degree in Estate
Management from the National
University of Singapore and a
graduate diploma in marketing from
the Marketing Institute of Singapore.
She is also a Member of Singapore
Institute of Surveyors and Valuers.
MS JILL NG
Head, Marketing &
Communications, Frasers
Centrepoint Singapore
Jill leads the marketing and
communications team at Frasers
Centrepoint Singapore, driving
experiential marketing, loyalty and
digital initiatives for the retail division
while advocating the continued
refi nement of customer journeys.
Across the Singapore strategic
business unit, which comprises the
residential, retail and commercial
divisions, she champions corporate
branding, internal communications,
public aff airs, CRM and the ongoing
push towards a seamless brand
experience. Recent team accolades
include the Gold Award for
Emerging Technology at the 2017
ICSC Asia Pacifi c Awards and a Silver
Award from Community Chest for
continued community investment.
Prior to joining Frasers Centrepoint
she was part of the development
marketing team for a greenfi eld
retail mall. She also led Marketing
Communications at Singapore’s
largest suburban mall where she
spearheaded branding, loyalty,
service excellence and promotions.
Jill has a Degree in Business
Administration from Macquarie
University and a Diploma in
Hospitality Management from
Temasek Polytechnic.
FRASERS CENTREPOINT TRUST
23
INVESTOR RELATIONS
WE ARE COMMITTED TO OPEN AND TRANSPARENT
COMMUNICATIONS
Frasers Centrepoint Asset Management Ltd (“FCAM”),
as Manager of Frasers Centrepoint Trust (“FCT”), is
committed to maintaining open and transparent
communications with its unitholders, media and the
investors. FCAM provides factual and timely disclosure
on all material information concerning FCT. General
information on FCT including annual reports, portfolio
information and investor presentations are updated
regularly on FCT’s website. All news releases and
company announcements are also available on the SGX-
ST website.
ANNUAL GENERAL MEETING (AGM)
The AGM and EGM are important communication
platforms between the board of directors, the
management of FCAM and the unitholders of FCT. FCT
convened its 8th AGM on 20 January 2017. The voting
for all resolutions at the AGM were conducted via
electronic polls. All resolutions tabled at the AGM were
duly passed and the results of the polls were announced
on the SGX and FCT websites on the same day of the
events.
PROACTIVE OUTREACH TO INVESTORS THROUGH
MANY CHANNELS
FCAM proactively engages investors and the research
analysts through many channels to extend its outreach
and to raise the profi le of FCT among investors. This is
achieved through active participation in conferences,
non-deal roadshows and various investor engagement
events organized by the securities fi rms, banks, the
Singapore Exchange (SGX) and various institutions
including REIT Association of Singapore (REITAS) and
ShareInvestor. We also engage retail investors through
participation in seminars, forums and large scale
symposium such as the ShareInvestor REIT Symposium,
where retail investors could interact with our head of
investor relations.
FCT was featured in MediaCorp’s Channel 8 (Singapore’s
national television) Chinese current aff airs program
“Money Week” (财经追击) in July and August 2017, which
the episodes focused on Singapore suburban retail malls.
In the program, FCAM’s Chief Executive Offi cer, Dr Chew
provided insights on the business environment and the
various challenges relating to Singapore’s suburban retail
sector. The program has strong viewership, particularly
with the Chinese speaking population and it was an
opportunity for us to reach out to this group of potential
investors.
ENGAGED 235 INSTITUTIONAL INVESTORS IN FY2017
The senior management of FCAM meets regularly with
FCT’s investors and analysts at investors’ conferences,
non-deal roadshows (both overseas and local), one-
on-one meetings and post-results luncheons to apprise
them of FCT’s corporate developments and fi nancial
performance. We also conduct property tours at our
malls for analysts, investors and journalists for them
to better understand the operation and dynamics of
our business and the progress of asset enhancement
initiative works (AEI) at our properties.
In FY2017, FCAM management held meetings with
235 institutional investors (FY2016: 289). The investors
generally view FCT favourably because of its established
track record in distribution growth, stability, good
growth prospects, attractive total return, good corporate
governance and transparent management.
EXPANDING INVESTOR BASE THROUGH ADDING
NEW NON-DEAL ROADSHOW (NDR) VENUES
Since 2014, FCAM has worked with various securities
fi rms to explore opportunities to meet new investors
in locations new to FCT. In 2014, we conducted FCT’s
fi rst NDR to Bangkok and in the following year 2015,
we conducted our fi rst NDR to Seoul. These NDRs gave
us the opportunity to introduce Singapore and SREITs
to some institutional investors who were not familiar
with Singapore and FCT and it created momentum in
investors’ interests. We were encouraged to see some of
Summary of investor
relations activities
Non-deal
roadshows:
Investors’
Conferences:
Post-results events
Symposiums and
Seminars
AGM
Total
Singapore Overseas
Total
0
6
8
5
1
20
4
2
0
1
0
7
4
8
8
6
1
27
24 ANNUAL REPORT 2017
these investors becoming unitholders in FCT following our NDRs. We added Taipei to our list of NDRs in FY2017 for
the fi rst time and we will continue to work towards growing and diversifying our unitholder base. During FY2017, we
hosted or participated in the following investor relations activities:
Time Frame
Event
Release of 4QFY16 and full year FY2016 results and
Post Results Analysts’ Briefi ng
Date
Venue
21 October 2016
Singapore
1QFY17
1 October –
31 December 2016
2QFY17
1 January –
31 March 2017
3QFY17
1 April –
30 June 2017
4QFY17
1 July –
30 September 2017
Post-FY2016 Results Investors’ Lunch hosted by Citi
21 October 2016
Singapore
SGX-SMAM SREITs Promotion Event
Non-Deal Roadshow hosted by Daiwa
DBS-REITAS REITs Investors’ Luncheon for Private
Bankers and High Networth Individuals
27 October 2016
28 October 2016
Tokyo
Tokyo
9 November 2016
Singapore
Morgan Stanley 15th Annual Asia Pacifi c Summit
16 November 2016
Singapore
DBS Pulse of Asia Conference
8th Annual General Meeting
Release of 1QFY17 Results and Post Results Analysts’
Conference Call
Post-1QFY17 Results Investors’ Lunch hosted by
Religare
SGX- Healthcare & REITS Corporate Day
SGX-SREITS Corporate Day
Daiwa ASEAN REIT Day
Release of 2QFY17 Results and Post Results Analysts’
Briefi ng
Post-2QFY17 Results Investors’ Lunch hosted by
Credit Suisse
Presentation at SGX-REITAS Quarterly REITs
Education Series
4 January 2017
Singapore
20 January 2017
Singapore
20 January 2017
Singapore
23 January 2017
Singapore
21 February 2017
13 March 2017
Taipei
Seoul
24 March 2017
Singapore
25 April 2017
Singapore
25 April 2017
Singapore
15 May 2017
Singapore
8th Annual dbAccess Asia Conference 2017
15 May 2017
Singapore
Bank of Singapore Forum 2017 – A Brave New Asia
17 May 2017
Singapore
Frasers Day (Hosted by DBS Bank)
Citi ASEAN Investor Conference 2017
ShareInvestor REIT Symposium 2017
19 May 2017
Bangkok
25 May 2017
Singapore
27 May 2017
Singapore
Citi Asia Pacifi c Property Conference 2017
22-23 June 2017
Hong Kong
Tokyo Non-Deal Roadshow hosted by UBS
Release of 3QFY17 Results and Post Results Analysts’
Conference Call
Post-3QFY17 Results Investors’ Lunch hosted by Bank
of America Merrill Lynch
The Asia Pacifi c Best Of The Breeds REITs Conference
and Awards
SGX-REITAS-Citi C-Suite Singapore REITs and
Sponsors Corporate Day 2017
3-4 July 2017
Tokyo
24 July 2017
Singapore
25 July 2017
Singapore
6 August 2017
Singapore
24 August 2017
Singapore
FRASERS CENTREPOINT TRUST
25
INVESTOR RELATIONS
2
Awards
in FY2017
BEST SUSTAINABLE
GROWTH REIT IN ASIA
Fortune Times REITs
Pinnacle Awards
GOLD AWARD FOR
THE BEST RETAIL REIT
(SINGAPORE)
Asia Pacifi c Best of the
Breeds REITs Awards
26 ANNUAL REPORT 2017
Dr Chew (centre, in red tie) giving his views at
the Bank of Singapore Forum 2017 on 17 May 2017
ACCOLADES
FCT has received two awards in FY2017, namely the Best Sustainable Growth REIT in
Asia at the Fortune Times REITs Pinnacle Awards and the Gold Award for the Best Retail
REIT (Singapore) at the Asia Pacifi c Best of the Breeds REITs Awards. These awards are in
recognition of FCT’s operational performance, capital management, risk management,
corporate governance among other considerations.
Dr Chew receiving the award for the Best
Sustainable Growth REIT in Asia from H.E. Ngurah
Swajaya, the Ambassador of the Republic of
Indonesia to Singapore at the Fortune Times REITs
Pinnacle Awards on 18 November 2016.
Dr Chew receiving the Gold Award for the Best
Retail REIT (Singapore) from Professor Deng Yong
Heng, the Guest of Honour at the Asia Pacifi c Best
Of The Breeds REITs Awards on 6 August 2017.
COVERAGE BY EQUITY
RESEARCH HOUSES
FY2018 FINANCIAL CALENDAR#
As at 30 September 2017, there were 17
equity research fi rms (FY2016: 18) which
provided equity research coverage on FCT.
The research fi rms which cover FCT (in
alphabetical order) are:
1. Bank of America-Merrill Lynch
2. BNP Paribas
3. CIMB Research
4. Citi Investment Research
5. CLSA
6. Credit Suisse
7. Daiwa Capital Markets
8. DBS Vickers Securities
9. HSBC
10. J.P. Morgan
11. KGI Fraser Securities
12. Maybank Kim Eng Research
13. OCBC Investment Research
14. Phillip Research
15. RHB
16. UBS
17. UOB Kay Hian Research
Note: Religãre Institutional Research ceased its equity
research activities during 2017.
23 January 2018
23 January 2018
Annual General Meeting
1Q FY2018 Results Announcement
End February 2018
1Q FY2018 Distribution Payment
April 2018
End May 2018
July 2018
2Q FY2018 Results Announcement
2Q FY2018 Distribution Payment
3Q FY2018 Results Announcement
End August 2018
3Q FY2018 Distribution Payment
October 2018
4Q FY2018 Results Announcement
End November 2018
4Q FY2018 Distribution Payment
# Note: Dates are indicative and are subject to change
ENQUIRIES
For general enquiries on FCT, please contact:
Mr Chen Fung Leng
Head, Investor Relations & Research
Frasers Centrepoint Asset Management Ltd
Tel: (65) 6277-2657
Email: ir@fraserscentrepointtrust.com
UNIT REGISTRAR
Boardroom Corporate & Advisory Services Pte Ltd
Phone: (65) 6536-5355
Fax: (65) 6536-1360
Website: www.boardroomlimited.com
FRASERS CENTREPOINT TRUST
27
OPERATIONS & FINANCIAL REVIEW
OPERATIONS REVIEW
LEASE RENEWALS
A total of 186 leases were renewed in FY2017 (FY2016: 153). These leases accounted for 299,427 square feet or 27.7%
of FCT’s total net lettable area (the ‘‘NLA”). The average rental reversion of these renewals was 5.1% (FY2016: 9.9%).
Rental reversion refers to the variance between the average rental rate of the renewed leases and the preceding
expired leases which were contracted typically 3 years ago. All malls, with the exception of Anchorpoint and Bedok
Point, recorded positive rental reversions of between 2.6% and 12.0% for the year under review.
SUMMARY OF LEASES RENEWED IN FY2017
(Excluding newly-created and reconfi gured area)
Property
Number of
leases renewed
Aggregate area of
renewed leases
(square feet)
Renewed area
as percentage of
property’s NLA
Increase / (Decrease)
in average rental rates
of renewed leases
compared with rental
rates of preceding leases
Causeway Point
Northpoint City North Wing
Yishun 10 Retail Podium
Changi City Point
Bedok Point
YewTee Point
Anchorpoint
FCT Portfolio
LEASE EXPIRY PROFILE
83
23
2
25
14
20
19
186
161,006
20,929
2,533
37,911
30,346
22,722
23,980
299,427
38.7%
9.6%
24.3%
18.3%
36.7%
30.8%
33.8%
27.7%
7.7%
6.8%
5.6%
12.0%
(21.3%)
2.6%
(0.9%)
5.1%
The portfolio lease expiry from FY2018 to FY2022 and the lease expiry by property in FY2018 are presented in tables
below. Our leases have an average lease duration of 3 years. Certain key or anchor tenants may be off ered longer
tenures, depending on the lease structure. The leases due in the next two years in FY2018 and FY2019 account for
29.2% and 26.9% of FCT’s Gross Rental Income (the “GRI”), respectively. As at 30 September 2017, the weighted
average lease expiry (the “WALE”1) of FCT portfolio stood at 1.82 years by NLA and 1.73 years by GRI. The aggregate
NLA of the leases in FCT portfolio2 due for renewal in FY2018 is 268,103 square feet and 73% of it (196,532 square
feet) is attributed to the three larger malls - Causeway Point, Northpoint City North Wing and Changi City Point.
PORTFOLIO LEASE EXPIRY AS AT 30 SEPTEMBER 2017
Excluding Vacancies
Number of leases expiring
243
176
227
15
9
FY2018
FY2019
FY2020
FY2021
FY2022
Total
670
Leased area expiring
(square feet)
268,103
256,929
338,193
72,719
57,282
993,226
Expiries as % of total leased area
Expiries as % of total GRI
27.0%
29.2%
25.9%
26.9%
34.0%
35.6%
7.3%
4.3%
5.8%
4.0%
100.0%
100.0%
1 Computation of WALE is as follows:
WALENLA = Sum of (Remaining Lease Tenure x NLA of Individual leases) / Total Leased Area
WALEGRI = Sum of (Remaining Lease Tenure x GRI of Individual leases) / Total GRI
Remaining lease Tenure = time period between reporting date and the lease expiry date
Includes leases in Yishun 10 retail podium
2
28 ANNUAL REPORT 2017
LEASE EXPIRY FOR FY2018 AS AT 30 SEPTEMBER 2017
Excluding Vacancies
Property
Number of
leases expiring
Leased area expiring
(square feet)
Expiries as % of
property’s total
leased area
GRI of expiring
leases as % of the
property’s total GRI
Causeway Point
Northpoint City North Wing
and Yishun 10 retail podium
Changi City Point
Bedok Point
YewTee Point
Anchorpoint
Total FCT
75
44
53
20
37
14
243
106,927
36,976
52,629
23,697
37,966
9,908
268,103
25.8%
19.8%
28.7%
33.6%
53.9%
14.5%
27.0%1
1 As percentage of leased area of FCT portfolio, excluding vacancy, as at 30 September 2017
2 As percentage of gross rent income of FCT portfolio for the month of September 2017, excluding gross turnover rent
27.4%
21.7%
36.0%
42.3%
56.5%
15.9%
29.2%2
FCT PORTFOLIO OCCUPANCY COST
PORTFOLIO TENANTS’ SALES AND OCCUPANCY COST
16.4%
16.6%
15.7%
15.3%
FY2014
FY2015
FY2016
FY2017
FCT’s portfolio tenants’ sales declined an average of 5.7% in FY2017
compared to FY2016. All properties showed decline in tenant’s sales.
Northpoint City North Wing in particular, experienced the sharpest
tenant’s sales decline of 15.2% due to the planned vacancies in
conjunction with the asset enhancement initiatives, which aff ected
both the shopper traffi c and the tenant’s sales through the entire
FY2017. Excluding Northpoint City North Wing, the average decline in
tenant’s sales was 3.4%.
The average occupancy cost for FCT portfolio for the 12-month
period between October 2016 and September 2017 was 16.6%, an
increase of 90 basis points compared with 15.7% registered in FY2016.
Occupancy cost refers to the ratio of gross rental (including turnover
rent) paid by the tenants to the tenant’s sales turnover (excluding
Goods & Services Tax). The occupancy cost for FY2017 and the
preceding 3 fi nancial years is presented in the chart on the left.
LEASES WITH GROSS TURNOVER RENT AND STEP-UP CLAUSES
Nearly all our leases include step-up clauses that provide for annual rental increment of between 1% and 2% during
the lease term. In addition, 93% of the occupied leases include Gross Turnover rent (the “GTO”) clauses, which the
tenants would pay between up to 1% of their sales as part of the lease agreement.
PERCENTAGE OF OCCUPIED LEASES WITH GTO AND STEP-UP CLAUSES
With GTO clause
With step-up clause
FY2017
93.1%
98.4%
FY2016
Increase/(Decrease)
94.2%
99.2%
(1.1%-point)
(0.8%-point)
FRASERS CENTREPOINT TRUST
29
OPERATIONS & FINANCIAL REVIEW
PORTFOLIO OCCUPANCY
The average portfolio occupancy stood at 92.0% as at 30 September 2017, 2.6%-point higher than a year ago. The
improvement in portfolio occupancy is attributed to the recovery in occupancy at Northpoint City North Wing as the
asset enhancement initiative works approached completion. Changi City Point’s occupancy improved 7.4%-point with
commencement of new leases during the year. The occupancy at Causeway Point, YewTee Point and Anchorpoint
held relatively steady while Bedok Point saw a decline of 9.8%-point in occupancy due to expired leases not renewed.
The occupancy by property is shown in the table below.
Occupancy by Property
As at 30 September 2017 As at 30 September 2016
Increase/ (Decrease)
Causeway Point
Northpoint City North Wing and
Yishun 10 retail podium
Changi City Point
Bedok Point
YewTee Point
Anchorpoint
FCT Portfolio
99.5%
81.6%
88.5%
85.2%
95.7%
96.2%
92.0%
99.8%
70.9%1
81.1%
95.0%
98.7%
96.7%
89.4%
(0.3%-point)
10.7%-point
7.4%-point
(9.8%-point)
(3.0%-point)
(0.5%-point)
2.6%-point
1 Occupancy does not include Yishun 10 retail podium as the property was acquired in November 2016
SHOPPER TRAFFIC
The total shopper traffi c in FY2017 was 98.4 million (FY2016: 102.0 million), a decrease of 3.5% year-on-year.
Northpoint City North Wing registered the sharpest 8.6% decrease in shopper traffi c due to the asset enhancement
works which aff ected the property’s shopper traffi c and tenant’s sales throughout FY2017. Shopper traffi c at
Causeway Point, Bedok Point and YewTee Point remained steady year-on-year, while Changi City Point saw a 5.1%
increase in shopper traffi c due to higher frequency of events held at the mall and the neighbouring Singapore Expo as
well as new shuttle bus service route added during the year. Anchorpoint saw softer traffi c of 5.9% compared to the
year before.
Shopper Traffi c by Property
(million)
FY2017
(1 Oct 2016 – 30 Sep 2017)
FY2016
(1 Oct 2015 – 30 Sep 2016)
Increase/ (Decrease)
Causeway Point
Northpoint City North Wing
Bedok Point
YewTee Point
Anchorpoint
Changi City Point
FCT portfolio
TRADE SECTOR ANALYSIS
24.5
41.3
4.4
12.7
3.2
12.3
98.4
24.6
45.2
4.4
12.7
3.4
11.7
102.0
(0.4%)
(8.6%)
No change
No change
(5.9%)
5.1%
(3.5%)
FCT’s well-diversifi ed portfolio comprises 11 trade sectors. Food & Restaurants is the largest sector which accounted
for 30.8% of FCT’s total NLA, which is a 3.1%-point increase from 27.7% in FY2016. The increase came mainly from
Northpoint City North Wing, which saw its proportion of NLA for Food & Restaurants increased to 35.1% from 14.7% in
FY2016, in conjunction with its asset enhancement initiative (“AEI”) works which re-confi gured more space for Food
& Restaurant, in line with its tenant mix strategy. YewTee Point and Anchorpoint also saw modest increase of between
30 ANNUAL REPORT 2017
1 and 2%-point in NLA allocated to Food & Restaurants. Food & Restaurants is also the largest contributor in term
of GRI, accounting for 37.6% of total GRI, up from 34.1% a year ago. The contribution from the second largest trade
sector Fashion fell year on year. The proportion of portfolio NLA for Fashion fell to 13.9% from 14.3% in FY2016, and
proportion of portfolio GRI for Fashion fell to 19.1% from 21.3% in FY2016.
1
2
3
4
5
6
7
8
9
10
11
12
Trade Classifi cations
Food & Restaurants
Fashion
Services/Education
Beauty, Hair, Cosmetics, Personal Care
Household
Supermarket
Healthcare
Department Store
Sports Apparels & Equipment
Books, Music, Art & Craft, Hobbies
Leisure/Entertainment
Vacant
Total
As % of Total NLA
As % of Total GRI1
30.8%
13.9%
7.0%
5.0%
8.1%
7.5%
2.4%
6.5%
3.3%
3.0%
4.5%
8.0%
37.6%
19.1%
8.9%
7.3%
7.1%
4.8%
4.0%
3.7%
3.1%
2.6%
1.8%
0.0%
100.0%
100.0%
1
As percentage of gross rent income of FCT portfolio for the month of September 2017, excluding gross turnover rent
TOP 10 TENANTS BY GRI1
The top ten tenants collectively accounted for 23.4% of the total GRI as at 30 September 2017 (2016: 23.5%). Our
largest tenant, Cold Storage Singapore (1983) Pte Ltd, the operator of Cold Storage supermarkets, the Guardian
Pharmacy and 7-Eleven stores in FCT malls, accounted for 4.4% of the portfolio GRI (2016: 4.4%).
TOP 10 TENANTS BY GRI AS AT 30 SEPTEMBER 2017
Tenant
Trade Sector
As % of Total NLA
As % of Total GRI
1
2
3
4
5
6
7
8
9
Cold Storage Singapore (1983) Pte Ltd2
Supermarket
Copitiam Pte Ltd3
Metro (Private) Limited4
Food & Restaurants
Departmental Store
Courts (Singapore) Limited
Household
NTUC5
Food Republic Pte Ltd
McDonald's Restaurants Pte Ltd
Uniqlo (Singapore) Pte Ltd
Cotton On Singapore
10 OCBC Bank
Total (Top 10)
Supermarket / Leisure
& Entertainment
Food & Restaurants
Food & Restaurants
Fashion
Fashion
Services
Based on gross rental income for the month of September 2017, excluding gross turnover rent
Includes the leases for Cold Storage supermarket, Guardian Pharmacy and 7-Eleven stores
1
2
3 Operator of Kopitiam food courts, includes Kopitiam and Bagus
4
5
Includes the leases for Metro departmental store and Clinique Service Centre
Includes leases for NTUC FairPrice Co-operative Ltd, NTUC Healthcare Co-operative Ltd and NTUC Club
5.4%
3.8%
5.6%
3.3%
3.0%
1.6%
0.9%
2.0%
1.1%
0.5%
4.4%
3.7%
3.4%
2.8%
1.8%
1.8%
1.5%
1.5%
1.3%
1.2%
27.2%
23.4%
FRASERS CENTREPOINT TRUST
31
OPERATIONS & FINANCIAL REVIEW
FINANCIAL REVIEW
Gross Revenue
Causeway Point
Northpoint City North Wing
and Yishun 10 retail podium
Anchorpoint
YewTee Point
Bedok Point
Changi City Point
Total FCT
Property Expenses
Causeway Point
Northpoint City North Wing and Yishun 10 retail
podium
Anchorpoint
YewTee Point
Bedok Point
Changi City Point
Total FCT
Net Property Income
Causeway Point
Northpoint City North Wing and Yishun 10 retail
podium
Anchorpoint
YewTee Point
Bedok Point
Changi City Point
Total FCT
FY2017
Oct 16 to Sep 17(a)
FY2016
Oct 15 to Sep 16
Increase /
(Decrease)
($’000)
84,723
42,029
8,521
14,448
7,338
24,536
181,595
($’000)
83,022
44,962
8,728
14,343
8,334
24,427
183,816
%
2.0%
(6.5%)
(2.4%)
0.7%
(12.0%)
0.4%
(1.2%)
FY2017
Oct 16 to Sep 17(a)
FY2016
Oct 15 to Sep 16
Increase /
(Decrease)
($’000)
19,184
12,287
3,888
4,399
3,675
8,604
52,037
($’000)
20,991
11,629
4,030
4,137
4,108
9,069
53,964
%
(8.6%)
5.7%
(3.5%)
6.3%
(10.5%)
(5.1%)
(3.6%)
FY2017
Oct 16 to Sep 17(a)
FY2016
Oct 15 to Sep 16
Increase /
(Decrease)
($’000)
65,539
29,742
4,633
10,049
3,663
15,932
129,558
($’000)
62,031
33,333
4,698
10,206
4,226
15,358
129,852
%
5.7%
(10.8%)
(1.4%)
(1.5%)
(13.3%)
3.7%
(0.2%)
(a)
Included results of Yishun 10 Retail Podium acquired on 16 November 2016
32 ANNUAL REPORT 2017
PERFORMANCE COMPARISON BETWEEN FY2017 AND FY2016
Gross revenue for the year ended 30 September 2017 was S$181.6 million, a decrease of
S$2.2 million or 1.2% over the corresponding period last year. It is mainly due to loss of
revenue from planned vacancies at Northpoint City North Wing in conjunction with its on-
going asset enhancement works.
FCT’s property portfolio continued to achieve positive rental reversions during the year.
Rentals from renewal and replacement leases from the Properties commencing during the
period, showed an average increase of 5.1% over the expiring leases.
Property expenses for the year ended 30 September 2017 totalled S$52.0 million, a decrease
of S$1.9 million or 3.6% from the corresponding period last year. The decrease was mainly
due to lower utilities tariff rates and other property expenses.
Hence, net property income was S$129.6 million, which was S$0.3 million or 0.2% lower than
the corresponding period last year.
Non-property expenses of S$34.7 million was S$1.7 million higher than the corresponding
period last year due to higher trust expenses and borrowing costs.
Total operating expenses1 as a percentage of net asset value was 3.7%, which was 0.2% lower
than 3.9% for the corresponding period last year.
Total return included:
(i) unrealised gain of S$0.3 million arising from fair valuation of interest rate swaps for the
hedging of interest rate in respect of S$80 million of the loans;
(ii) surplus on revaluation of the Properties of S$94.4 million;
(iii) share of associate’s results from operations of S$3.6 million and from revaluation surplus
of S$0.2 million; and
(iv) share of joint venture’s results of S$0.6 million.
1
The total operating expenses include property expenses, all fees and charges paid to Manager and interested
parties of $69,132,000 (2016: $69,816,000) for the fi nancial year.
FRASERS CENTREPOINT TRUST
33
OPERATIONS & FINANCIAL REVIEW
DISTRIBUTION
Income available for distribution for the year ended 30 September 2017 was S$110.6 million,
which was 2.3% higher compared to the corresponding period in the preceding fi nancial
year. Distribution per unit for FY2017 grew 1.2% to 11.90 cents from 11.764 cents in the prior
year. The breakdown and comparison of the distribution per unit for FY2017 and FY2016 are
presented below:
DISTRIBUTION PER UNIT (CENTS)
Financial year ended 30 September
FY2017
FY2016
First quarter (1 October – 31 December)
Second quarter (1 January – 31 March)
Third quarter (1 April – 30 June)
Fourth quarter (1 July – 30 September)
2.89
3.04
3.00
2.97
2.870
3.039
3.040
2.815
Full Year (1 October – 30 September)
11.90
11.764
Increase /
(Decrease)
0.7%
0.0%
(1.3%)
5.5%
1.2%
TOTAL ASSETS AND NET ASSET VALUE PER UNIT
As at 30 September 2017, the total assets of FCT stood at $2,751 million, an increase of
$156 million from $2,594 million a year ago. The increase was mainly attributed to surplus of
revaluation of $94.4 million on FCT’s properties.
FCT’s net assets stood at $1,872 million as at 30 September 2017, an increase of $97 million
(+5.4%) compared with $1,776 million a year ago. Correspondingly, the net asset value (the
“NAV”) and the net tangible asset of FCT increased to $2.02 per unit from $1.93 a year ago.
As at
30 September 2017
30 September 2016
NAV and NTA per unit (S$)
2.02(a)
1.93(b)
(a) The number of units used for computation of NAV and NTA per unit as at 30 September 2017 is 925,262,216. This
comprises:
(i) 922,448,285 units in issue as at 30 September 2017;
(ii) 683,956 units issuable to the Manager in October 2017, in satisfaction of 70% of the base management fee
payable to the Manager for the quarter ended 30 September 2017; and
(iii) 2,129,975 units issuable in October 2017, in satisfaction of 70% of the performance management fee payable to
the Manager for the year ended 30 September 2017.
(b) The number of units used for computation of NAV and NTA per unit as at 30 September 2016 is 920,198,330. This
comprises:
(i) 919,369,341 units in issue as at 30 September 2016; and
(ii) 828,989 units issued to the Manager in October 2016, in satisfaction of 50% of the management fee payable to
the Manager for the quarter ended 30 September 2016.
34 ANNUAL REPORT 2017
APPRAISED VALUE OF PROPERTIES
The total appraised value of FCT’s investment properties was $2,668.1 million as at 30 September 2017
(2016: $2,509 million).
Five of the FCT malls - Causeway Point, Northpoint City North Wing, Changi City Point, YewTee Point and
Anchorpoint saw higher appraised valuations from the independent property valuers. Valuation of Bedok Point
declined by $3 million. The portfolio as at 30 September 2017 included Yishun 10 retail podium, which was acquired
on 16 November 2016.
The property valuations for FY2017 were performed either by Colliers International Consultancy & Valuation
(Singapore) Pte Ltd (“Colliers”), Knight Frank Pte Ltd (“KF”) and Savills Valuation and Professional Services (S) Pte Ltd
(“Savills”). Valuation methods used include the capitalisation approach, discounted cash fl ow analysis and direct
comparison method in determining the fair values of the properties. Annual valuations are required by the Code
on Collective Investment Schemes. The capitalisation rate as indicated by the respective valuers for the FY2017
valuations showed a compression of between 25 and 60 basis points, as compared with FY2016.
Property
FY2017
Valuation at 30 September 2017
FY2016
Valuation at 30 September 2016
Valuation
($ million)
Valuation
($ psf NLA)(b)
Cap rate(a)
Valuer Valuation
($ million)
Valuation
($ psf NLA)(b)
Cap rate(a)
Valuer
Causeway Point
Northpoint City
North Wing
Changi City Point
YewTee Point
Bedok Point
Anchorpoint
Yishun 10 retail podium
Total
1,190.0
733.0
318.0
178.0
105.0
104.6
39.5
2,668.1
(a) As indicated by property valuers.
(b) psf NLA: per square foot of net lettable area
(c) ETC: Edmund Tie & Company (SEA) Pte. Ltd.
2,862
3,360
1,534
2,416
1,269
1,473
3,794
4.85%
4.75%
KF
1,143.0
Savills
672.0
5.25% Colliers
5.25%
5.25%
4.75%
Savills
Savills
Savills
4.00% Colliers
311.0
172.0
108.0
103.0
2,509.0
2,749
2,986
1,501
2,335
1,306
1,451
5.35%
5.35%
ETC(c)
KF
5.75% Colliers
5.50%
5.50%
5.25%
Savills
Savills
Savills
FRASERS CENTREPOINT TRUST
35
CAPITAL RESOURCES
OVERVIEW
Frasers Centrepoint Asset Management Ltd. (“FCAM”), as Manager of Frasers Centrepoint Trust (“FCT”), continues
to maintain a prudent fi nancial structure and adequate fi nancial fl exibility to ensure that it has access to capital
resources at competitive cost. FCAM proactively manages FCT’s cash fl ows, fi nancial position, debt maturity profi le,
cost of funds, interest rates exposure and overall liquidity position. FCAM monitors and maintains a level of cash
and cash equivalents deemed adequate by management to meet its operational needs. It also maintains an amount
of available banking facilities deemed suffi cient by management with reputable banks to ensure FCT has access to
diversifi ed sources of bank borrowings.
SOURCES OF FUNDING
FCT relies on the debt capital and syndicated loans markets, equity market and bilateral bank facilities for its funding
needs. FCAM maintains active relationship with several reputable banks which are located in Singapore. The principal
bankers of FCT are DBS Bank Ltd, Oversea-Chinese Banking Corporation Limited and Citibank.
As at 30 September 2017, FCT has a total capacity of $4,486 million from its sources of funding, of which $798 million
or 17.8% has been utilised. The following table summarises the capacity and the amount utilised for each of the
sources of funding:
Sources of Funding
Revolving credit facilities
Type
Capacity
Amount Utilised
% Utilised
Unsecured
$140 million
$92 million
Medium Term Note Programme
Unsecured
$1,000 million
$360 million
Bank borrowings
Bank borrowings
Unsecured
$60 million
$60 million
Secured
$286 million
$286 million
Multicurrency Debt Issuance Programme1
Unsecured
$3,000 million
Nil
Total
$4,486 million
$798 million
65.7%
36.0%
100.0%
100.0%
Nil
17.8%
1 On 8 February 2017, the Group established a $3 billion Multicurrency Debt Issuance Programme. As of 30 September 2017, no Note has been
issued under this programme.
CREDIT RATINGS
FCT has corporate credit ratings from S&P Global Ratings (“S&P”) and Moody’s Investors Service (“Moody’s”).
FCT has been assigned a corporate rating of “BBB+” with a stable outlook by S&P and a corporate rating of
“Baa1” with a stable outlook by Moody’s. In addition, FCT’s multicurrency Medium Term Note Programme (“MTN
Programme”) has been rated “BBB+” by S&P.
DEBT PROFILE
During the year, the Manager refi nanced the $70 million loan secured on Bedok Point in December 2016 with DBS
Bank Limited. The Manager had also refi nanced $90 million of the $150 million unsecured term loan in April 2017 and
$30 million 2.85% Fixed Rate Notes in June 2017 with issuances of $90 million 2.365% Fixed Rate Notes due 2020
and $30 million 2.645% Fixed Rate Notes due 2022 under FCT’s existing MTN Programme.
36 ANNUAL REPORT 2017
FCT’s total debt, stood at $798 million at 30 September 2017, comprised $286 million secured bank borrowings, $152
million unsecured bank borrowings and $360 million in unsecured Notes. $152 million of borrowing (about 19.1%
of total borrowings) will mature in the next 12 months. FCT’s gearing stood at 29.0% as at 30 September 2017. The
interest cover for the year ended 30 September 2017 was 6.85 times.
The weighted average debt maturity was 2.3 years as at 30 September 2017.
Financial Year ended 30 September
Total Borrowings
Gearing2
Interest Cover
Average cost of borrowing3
Average Debt Maturity
2017
$798 million
29.0%
6.85 times
2.32%
2.3 years
2016
$734 million
28.3%
7.33 times
2.10%
2.7 years
2 Calculated as the ratio of total outstanding borrowings over the total assets as at the stated balance sheet date.
3 Calculated as at the stated balance sheet date.
The fair value of derivatives liabilities as at 30 September 2017 of $0.3 million (2016: $0.6 million) is disclosed in Note
12 to the Financial Statements. The fair value derivatives liabilities represented -0.02% (2016: -0.03%) of the net assets
of FCT as at 30 September 2017.
DEBT MATURITY PROFILE AS AT 30 SEPTEMBER 2017
Timeframe
< 1 year
1 to 2 years
2 to 3 years
3 to 4 years
> 4 years
Total Borrowings
Amount Due (S$ million)
As % of total borrowings
152.04
120.0
230.0
266.0
30.0
798.0
19.1%
15.0%
28.8%
33.3%
3.8%
100.0%
4
$60 million unsecured notes due on 12 December 2017 had been refi nanced on 8 November 2017 with issue of 7-year unsecured notes under the
Medium Term Note Programme as disclosed in Note 30 to the Financial Statements.
$798 million
$152 million
(19.1% of total
borrowings)
$120 million
(15% of total
borrowings)
$230 million
(28.8% of total
borrowings)
$266 million
(33.3% of total
borrowings)
$30 million
(3.8% of total
borrowings)
Total Borrowings
< 1 year
1 to 2 years
2 to 3 years
3 to 4 years
> 4 years
FRASERS CENTREPOINT TRUST
37
RETAIL PROPERTY MARKET OVERVIEW
By Edmund Tie & Company (SEA) Pte Ltd
1.0
ECONOMIC AND DEMOGRAPHIC OVERVIEW
1.1
Economy showed signs of improvement with 4.6% y-o-y GDP growth
in Q3 2017 and unemployment stable at 2.1%
Following Gross Domestic Product (GDP) growth of between 2.5% and 2.9% from Q4 2016
to Q2 2017, GDP grew at a faster pace at 4.6% y-o-y in Q3 2017 (Table 1.1). The increase was
backed by strong growth in the manufacturing sector and a pick-up in the services sector.
Unemployment rate1 eased to 2.1% in Q3 2017, attributed to a pickup in employment in the
services sector. The economy is on track to grow by between 2% and 3% in 2017.
Table 1.1: Key Economic Indicators
Indicator (y-o-y)
GDP Growth
Infl ation
Unemployment
2016
2.0%
-0.5%
2.1%
Q1 2017
Q2 2017
Q3 2017
2017 F
2.5%
2.9%
4.6%
0.7%
2.2%
0.8%
2.2%
0.5%
2.1%
Between 2.0%
and 3.0% (MTI)
1.1% (IMF)
2.2%
Source: Ministry of Trade and Industry (MTI), Department of Statistics (DOS), Monetary Authority of Singapore (MAS),
Edmund Tie & Company, October 2017
Positive Infl ation rates recorded from Q1 to Q3 2017
On the back of GDP growth, Consumer Price Index (CPI) remained positive for three
consecutive quarters with infl ation at 0.5% in Q3 2017. Infl ation is mainly driven by the
increase in prices of health care and education.
Population
1.2
Population grew at slower pace
Accodring to DOS, total population2 grew by 0.1% y-o-y to 5.6m as at June 2017, signifi cantly
slower than that at 1.3% in 2016, mainly due to the 1.6% decrease in non-residents
population. Singapore Citizens constitute 61% (3.4 million) of the total population, permanent
residents at 9% (527,000) and non-resident at 30% (1.6 million).
The “silver consumer market” is expected to ride on the technology trend
In line with population trend in developed economies, by 2030, 1 in 4 Singaporeans will
be aged 65 and above3, doubling that in 2016. Compared to the pre-baby boomers, the
upcoming cohort of Singaporeans who are retiring will seek a more active lifestyle. They are
also likely to be more educated and tech-savvy, and will demand a wider range of goods and
services. Therefore, retailers and service providers are also riding on the technology trends
such as Internet of Things and data analytics to create innovative services and products to
serve this silver consumer market.
Household Income, Private Consumption Expenditure and Retail Sales Trends
1.3
Both household income and private consumption expenditure grew slower in 2016
compared to that in 2015
Growth in household income4 slowed in 2016, increasing by 2.1%, 2.4%-point lower than that
in 2015. This is also refl ected in the growth of Private Consumption Expenditure (PCE)5. PCE
continued to grow in 2016 albeit at a slower pace by 0.6%, compared to the 4.6% in 2015
(Figure 1.1). The growth in PCE was mainly attributed to the increase in spending on transport
(12.8%). On the other hand, spending on clothing & footwear, food serving services and
recreation & culture fell by 0.4%, 1.5% and 4.7% respectively.
1
2
Resident and citizen
unemployment rate.
Singapore citizens,
permanent residents
and non-residents.
Source: DOS
3
4 Nominal household
5
income.
Private consumption
expenditure is
a refl ection of
consumer confi dence
and household retail
spending.
38 ANNUAL REPORT 2017
Figure 1.1: Household Income and Private Consumption Expenditure
y-o-y change
8%
7%
6%
5%
4%
3%
2%
1%
0%
2012
2013
2014
2015
2016
Household Income
Private Consumption Expenditure
Source: MTI, DOS, MAS, Edmund Tie & Company, October 2017
Retail Sales per sq ft in malls owned by REITs remained steady in 2016
Despite the slowing retail market, retail sales for malls owned by REITs remained stable due
to the generally better locations, e.g. near transport hubs and resident estates. Retail sales per
sq ft for suburban malls owned by REITs malls averaged around $90 per sq ft per month in
2016.
Retail sales market showed signs of improvement in 2017 with higher consumer
confi dence and retail sales in selected subsectors
Following a fall in Q4 2016 and Q1 2017, retail sales showed improvement since Q2 2017.
According to the Mastercard Index of Consumer Confi dence H1 2017 report, positivity
over components such as employment, economy, income and stock market led to an
improvement in consumer confi dence. This is refl ected in the improvement in the Retail
Sales Index (excluding motor vehicles) in Sept 2017. Medical goods & toiletries, watches &
jewellery and recreational goods are the best performing retail subsectors in the fi rst nine
months of 2017 (Table 1.2). Total retail sales in the fi rst nine months of 2017 totalled some
$32,733 million6, 1.3% higher compared to that in 2016.
Table 1.2: Retail Sales Index at Constant Prices (2014 = 100), y-o-y change
Indicator
Q4 2016
Q1 2017
Q2 2017 Sept 2017
Retail Sales (Excluding Motor Vehicles)
Supermarkets
Department Stores
Wearing Apparel & Footwear
Watches & Jewellery
Food Retailers
Recreational Goods
Medical Goods & Toiletries
Optical Goods & Books
Source: DOS, Edmund Tie & Company, October 2017
-1.6%
-2.1%
-1.8%
-3.7%
-5.8%
-2.1%
3%
6%
-3.4%
-0.4%
-2.2%
-4.6%
-1.5%
7.7%
-1.8%
2.1%
7.4%
-1.8%
3.2%
0%
4.9%
-0.1%
13.8%
-5.4%
2.8%
7.1%
1.8%
3.3%
9.8%
7.7%
8.3%
4.4%
-2.5%
4.7%
6.0%
-2.3%
6
Includes retail
sales by retailers in
Singapore that sell
via physical stores
and/ or online/e-
commerce sites.
FRASERS CENTREPOINT TRUST
39
RETAIL PROPERTY MARKET OVERVIEW
By Edmund Tie & Company (SEA) Pte Ltd
Retail market remains cautiously optimistic
While retail sales are showing signs of
improvement, given the slower growth
in household income and increasing
competition from e-commerce and growing
trend of residents traveling overseas to
shop, the retail market remains cautiously
optimistic.
2.0 GOVERNMENT PLANS
Retail Centre of Excellence (RCoE) - A
joint initiative with SPRING Singapore and
the Economic Development Board (EDB),
The RCoE was opened in the Singapore
Management University (SMU). The RCoE
is the fi rst insight-sharing hub in Singapore
which generates ideas to explore how
online and brick-and-mortar stores can
be seamlessly integrated with the aim of
keeping the retail industry healthy.
Government initiatives to support retail and
F&B markets
Industry Transformation Map (ITMs) - To
position Singapore for the next phase of
growth, the Committee on The Future
Economy (CFE)7 unveiled details of the
Retail and Food Services ITMs, two of 23
ITMs in 2017. The Retail ITM8 features four
strategies – to assist retailers to go digital
and international, brand building and R&D,
raise productivity through technology, and
skills upgrading. The Food Services ITM
encompasses four main thrusts – develop
innovative meal formats, promote mass
adoption of technologies, raise employees’
skills and versatility and expand the footprint
of Singapore Food & Beverage (F&B) in
overseas markets. SPRING Singapore
has been appointed to lead the ITMs
to restructure the lifestyle (Retail, Food
Manufacturing and Hotel) economy by
working closely with the private sector.
Skills Upgrading - As part of the
Government’s initiative in encouraging
companies to utilise innovative technologies
and go manpower-lean, Workforce
Singapore (WSG), SkillsFuture Singapore
and Spring Singapore9 implemented guides
on new skills frameworks for F&B and retail
sectors. Job-seekers are able to identify the
required skills and available career pathways,
which have evolved with trends such as
increased automation and e-commerce.
Assistance is provided to employers
through WSG grants and programme,
helping to off set the costs of technology
implementation and training, together with
wage subsidy support.
New Growth Areas
2.1
Completion of new public transport
network is improving accessibility to
existing areas and spurring new growth
areas
The latest Mass Rapid Transit (MRT) line, the
Downtown Line 3, was fully operational in
October 2017. The line connects the north-
western and eastern regions of Singapore to
the CBD and Marina Bay, from Expo (where
Changi City Point is) to Bukit Panjang.
Connectivity will further improve when the
Downtown Line 3 Extension, which joins
the East-West and the future Thomson-East
Coast Line at Sungei Bedok, completes in
202410.
Woodlands Regional Centre envisaged to
become Singapore’s Northern Gateway in
the next 10-15 years
The Urban Redevelopment Authority
(URA) identifi ed Woodlands Regional
Centre as Singapore’s Northern Gateway.
Development of the 700,000 sq m (7.5
million sq ft) regional centre will take place
over the next 10-15 years. The growth of the
regional centre will anchor the development
of the North Coast into an innovative
corridor.
The regional centre comprises two districts
– Woodlands Central (where Causeway
Point is located) and Woodlands North
Coast. URA envisioned Woodlands Central
to be a walkable, pedestrian-centric regional
retail hub. Some 350,000 sq m (3.7 million
sq ft) of new offi ce and retail spaces will be
added to the area. While the Woodlands
MRT station on the North South MRT Line
is already an integrated transport hub with
direct access to the Woodlands Regional Bus
7
The CFE was set up
by the government
comprising members
from diff erent
industries that
operate in both
global and domestic
markets. It aims to
keep the Singapore’s
economy competitive
by helping to position
Singapore for the
future, as well as
identify areas of
growth with regards
to regional and global
developments.
8 The Retail and
9
Food Services ITM
were introduced by
SPRING Singapore.
Spring Singapore
and International
Enterprise (IE)
Singapore will be
combined to form
Enterprise Singapore
in mid-2018.
10 Source: LTA
40 ANNUAL REPORT 2017
Figure 2.1: Thomson-East Coast Line
By embracing omnichannel retailing,
consumers satisfy their retail needs through
multiple channels seamlessly and enjoy an
integrated shopping experience. Online
retailers have also ventured into pop-up
stores12 which augment their customers’
shopping experience.
M-commerce brings a strong infl uence on
consumer behavior
Due to the prevalence of smartphone
technologies, m-commerce13 has formed a
core component of shoppers’ experience.
Mobile technology like smartphones
are highly infl uential devices that can
complement and transform physical retail.
Retail off erings can be customized on
the go, and malls can make use of the
technology for more targeted marketing.
For instance, Frasers Centrepoint Malls
(including FCT malls) piloted gamifi cation in
its Frasers Rewards mobile app during the
Great Singapore Sale in June to increase
customer loyalty. Parkway Parade and 313@
Somerset have experimented with proximity
marketing to target nearby shoppers who
are surfi ng with their phones.
Interchange and connected to Causeway
Point, accessibility will further improve when
the Thomson-East Coast Line completes in
stages from 2019 (Figure 2.1). Woodlands
MRT Station will be the interchange station
for the two MRT lines.
Some 12,500 private and public homes will
be added to the Bayshore Area in Bedok
Planning Area
In October 2017, URA announced new
plans to develop three new areas, including
Bayshore, Holland Plain and Kampong Bugis.
The 60 ha Bayshore area near East Coast
Park in the Bedok Planning Area, where
Bedok Point is located. URA envisaged the
Bayshore Area to be a car-lite, inclusive and
green precinct where main street is lined
with shops, cafes, grocery stores, childcare
and elderly facilities. The area is slated to
be launched after 2024, when the Bayshore
and Bedok South MRT stations along the
Thomson-East Coast Line are completed.
Some 6,000 HDB fl ats and another 6,500
private units are planned for the area.
3.0
RETAIL INDUSTRY TRENDS
Omnichannel retailing is driving retail
marketing strategy
Omnichannel retailing11 gains traction
among discerning consumers as online
retailers broadened their off erings, while
more brick-and-mortar retailers incorporate
e-commerce in their business models.
11 Omni-channel
retailing refers to
the creation of a
shopping experience
carried out
concurrently across
multiple channels
(online and offl ine).
12 Pop-up stores off er
retail space in a mall
for a short term,
usually between three
months and a year.
13 M-commerce refers
to commercial
transactions that
are conducted
electronically by
mobile phone.
FRASERS CENTREPOINT TRUST
41
RETAIL PROPERTY MARKET OVERVIEW
By Edmund Tie & Company (SEA) Pte Ltd
Smart technologies enhance shoppers’
experience in malls and increase retailers’
productivity
Retailers are adopting smart technologies
to reduce operating costs, and at the
same time gives consumers more effi cient
and convenient services. For instance, in
the newly opened SingPost Centre (NLA:
178,000 sq ft) in Paya Lebar, supermarket
operator NTUC FairPrice introduced a
scan-and-go system where pre-registered
customer collect scanners at the entrance
and scan items as they shop before paying
at dedicated counters. A new mobile app
serves as a shopping assistant to help
shoppers identify the shortest route to the
products they are looking for. In addition,
shoppers can try out new products using
augmented and virtual reality at their
experiential corner.
Retailers are also introducing manpower-
lean strategies to manage operating costs.
For example, Cheers opened its fi rst
unmanned and cashless concept store at
Nanyang Polytechnic, which uses a unifi ed
self-checkout system, vending machines,
and a system that monitors stock levels and
automatically places orders when stocks
run low. This saves Cheers 180 man-hours
weekly.
Suburban malls are increasingly
repositioning themselves to give residents
a more holistic experience
Increasingly, suburban malls are
repositioning themselves as “community
malls” to provide more holistic experiences
for residents living in the area. Facilities such
as 24-hour gym are showing up in malls and
more F&B options are made available for
better dining convenience. The Nee Soon
Central Community Club will move into
the Northpoint City South Wing by 201814.
This will be the fi rst community club to be
housed in a shopping centre.
Increasing contribution by F&B to overall
revenue for malls
With increasing popularity and lifestyle
changes to dine out driving higher demand
for F&B, mall owners and operators are
increasing their space allocation for F&B,
thereby driving higher rental revenue from
this trade sector. The average proportion of
space for F&B has increased steadily over
the last 10 years from about 15% to as high
as 30% today. Malls are adjusting their tenant
mix to adapt to the changing lifestyle of
consumers. A wider variety of F&B outlets
are being introduced to suburban malls to
meet the demand from the neighbourhood.
The increasing popularity of online food
delivery services, e.g. Deliveroo and Uber
Eat, will also augment F&B sales in the malls.
Going forward, suburban malls will evolve
from the provision of daily necessities to
merging experiential elements with physical
stores and community spaces. As a result,
there will be a greater variety of F&B outlets,
concept stores, entertainment and service-
oriented businesses in suburban malls.
4.0
RETAIL PROPERTY MARKET
Stock
4.1
Suburban retail space contributed to more
than half (51%) of total purpose-built retail
stock
As at Q3 2017, there was a total of about
60.8 million sq ft of retail space15. Of this,
41.7 million sq ft was in purpose-built
shopping centres. Some 51% (21.2 million
sq ft) of the purpose-built retail stock was in
the suburban areas, followed by 30% (12.4
million sq ft) in the other city areas and 19%
(8.1 million sq ft) in the Orchard/Scotts Road
area (Figure 4.1).
14 Source: Frasers
Centrepoint
Singapore
Includes both public
and private stock.
15
42 ANNUAL REPORT 2017
Figure 4.1: Stock16
sq ft
45,000,000
40,000,000
35,000,000
30,000,000
25,000,000
20,000,000
15,000,000
10,000,000
5,000,000
0
43%
36%
22%
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Orchard/ Scotts Road
Other City Areas
Suburban Areas
51%
30%
19%
Q1-Q3
2017
Source: Edmund Tie & Company, October 2017
Limited increase in suburban retail stock
between Q4 2016 and Q3 2017
Suburban retail space grew by 2% y-o-y
(403,700 sq ft) in Q3 2017 to 21.3 million
sq ft, mainly attributed by the completion
of Hillion Mall (174,700 sq ft) in Bukit
Panjang, as well as the completion of the
Asset Enhancement Initiatives (AEI) at Viva
Business Park (75,230 sq ft) in Bedok, which
saw new tenants like True Fitness, Andes
Steakhouse and Harvey Norman’s fi rst-
ever factory outlet. Our Tampines Hub,
completed in Q3 2017, is being positioned as
Singapore’s fi rst integrated community and
lifestyle hub with retail space of 76,850 sq ft
at its Festive Mall.
Figure 4.2: Potential Supply
million sq ft
Potential Supply
4.2
Majority of pipeline supply between Q4
2017 and 2021 will be in the suburban areas
From Q4 2017 to 2021, 3.0 million sq ft
(NLA) of retail space is expected to complete
islandwide, with 64% (1.9 million sq ft) in
the suburban areas (Figure 4.2). Although
potential supply is relatively less compared
to the annual average at 1.3 million sq ft
in the last fi ve years, with the relatively
cautious retail sales market and increasing
competition from e-commerce, landlords
and retailers will have to continue to
innovate and introduce new concepts to
maintain competitiveness.
1.2
0.8
0.4
0
Q4 2017
2018
2019
2020
2021
Orchard/ Scotts Road
Other City Areas
Suburban Areas
Source: URA, Edmund Tie & Company, October 2017
16 Retail stock (public
and private)
comprises Orchard/
Scotts Road, Other
City Areas and
Suburban Areas. It
comprises purpose-
built shopping
centres, retrofi tted
shophouses managed
and positioned as
a shopping centre
with NLA of at least
10,000 sq ft. It also
includes retail spaces
with a minimum
NLA of 10,000 sq ft
within hotels, offi ces
and residential
developments.
FRASERS CENTREPOINT TRUST
43
RETAIL PROPERTY MARKET OVERVIEW
By Edmund Tie & Company (SEA) Pte Ltd
Pipeline supply include Northpoint City South Wing and Jewel Changi Airport
A key pipeline supply in H2 2017 is Northpoint City South Wing (NLA 318,000 sq ft17). South
Wing will be integrated with Northpoint City North Wing (formerly known as Northpoint
Shopping Centre), to form a mixed-use development with residences (920-units North Park
Residences, expected to complete in Q4 2018), community spaces and an air-conditioned
bus interchange. When completed in Q4 2017, Northpoint City will be one of the largest retail
malls in the north of Singapore.
Slated to open in 2019, Jewel Changi Airport (Estimated NLA: 579,000 sq ft), near Changi City
Point, will feature 300 shops and F&B outlets, and a 40m indoor waterfall. The development,
connected to Singapore Changi Airport, aims to attract both residents and air travelers.
Table 4.1 are selected retail projects in the pipeline.
Table 4.1: Major Retail Projects in the Pipeline
Planning Areas
Orchard Area
Orchard
Other City Area
Downtown Core
Suburban
Pasir Ris
Yishun
Paya Lebar
Yishun
Changi
Estimated Year
of Completion
Development
Estimated
NLA (sq ft)
2018
A/A to TripleOne Somerset
70,000
2018
A/A to Raffl es Hotel
219,000
Q4 2017
Q4 2017
2018
2018
2019
A/A to Downtown East
Northpoint City South Wing
Paya Lebar Quarter
Wisteria Mall
Jewel Changi Airport
41,000
318,000
340,000
58,000
579,000
(Source: URA, Edmund Tie & Company, October 2017
Limited supply of retail space from the H2 2017 Government Land Sales Programme
The government has taken a cautious approach in the future supply of retail space. Retail
gross fl oor area (GFA) released in H2 2017 Government Land Sales (GLS) Programme are
limited at around 28,500 sq m (306,770 sq ft) in total (Table 4.2). The allowable uses of the
sites at Holland Road and Sengkang Central are mixed-use developments with residential
component, while the site at Woodlands Square in the Reserve List is expected to be
primarily for offi ce use.
17 Source: Based on
ET&Co Estimates.
44 ANNUAL REPORT 2017
Table 4.2: H2 2017 GLS Programme Retail Component Sites at Suburban Areas
Location
Site Area (Ha)
Estimated Commercial
Space (sq m)
Allowable Retail GFA
Holland Road1
(Bukit Timah)
Sengkang Central2
(Sengkang)
Woodlands Square3
Woodlands)
Confi rmed List
2.30
3.63
13,500
13,300
Reserve List
2.24
54,790
13,500 sq m
(145,310 sq ft)
12,000 sq m
(129,170 sq ft)
3,000 sq m
(32,290 sq ft)
1
Site is imposed with Dwelling Units (DU) cap of 570 units and a retail cap of 13,500 sq m (145,310 sq ft) GFA.
2 A mixed-use development with integrated community and bus interchange facilities. Retail cap is 12,000 sq m
(129,170 sq ft) GFA.
Site is imposed with a retail cap of 3,000 sq m (32,290 sq ft) GFA.
3
Source: URA, Edmund Tie & Company, October 2017
4.3 Demand and Occupancy
Despite supply outpacing demand, occupancy for suburban retail space eased slightly by
0.1%-point y-o-y
Net supply (432,240 sq ft) outpaced demand (357,300 sq ft) between Q4 2016 and Q3 2017
in the suburban areas. Notwithstanding, occupancy of private retail spaces in the suburban
areas remained resilient and eased only slightly by 0.1%-point from 90.9% in Q3 2016 to
90.8% in Q3 2017. The healthy occupancy was attributed by the increasing competitiveness
to attract tenants, such as by introducing more fl exible leases and pop-up stores, as well as
being more negotiable in the rents.
Figure 4.3: Supply, Demand and Occupancy18 (Suburban Areas)
sq ft
500,000
400,000
300,000
200,000
100,000
0
-100,000
2007
2008 2009 2010
2011
2012
2013
2014
2015
2016
Q1-Q3
2017
Net Supply (LHS)
Demand (LHS)
Occupancy (RHS)
Source: URA, Edmund Tie & Company, October 2017
100%
98%
96%
94%
92%
90%
88%
86%
84%
82%
80%
18 Occupancy is based
on end period fi gures.
FRASERS CENTREPOINT TRUST
45
RETAIL PROPERTY MARKET OVERVIEW
By Edmund Tie & Company (SEA) Pte Ltd
More mid-tier fashion brands are choosing
to expand operations in suburban areas
Located in populous residential areas,
suburban malls are well-positioned in the
heartlands. Increasingly, mid-tier brands
are choosing to expand their operations
in suburban areas. For example, Uniqlo
has 12 branches located outside the
Orchard/Scotts Road area while H&M has
six suburban mall branches. Other brands
targeting suburban malls include MUJI, Bake
Cheese Tarts and Sephora. More suburban
malls are also adjusting their tenant-mix
strategy to increase their percentage of food
& restaurants, services and education to
cater to growing demand.
Healthy demand for strategically located
retail spaces in the Orchard/Scotts Road
area
From Q4 2016 to Q3 2017, occupancy for
retail space in the Orchard/Scotts Road area
increased by 0.9%-point to 93.0%. Notably,
retail space in the Orchard/Scotts Road area
has higher occupancy rates compared to
that in the suburban areas (90.8%). Demand
for retail space in the Orchard/Scotts Road
area remained healthy in 2017, especially
for strategically located retail spaces, as it
continues to be the preferred location for
fl agship stores and new-to-market brands.
Newly opened stores along Orchard Road
includes Apple’s fi rst Southeast Asia store at
Knightsbridge and Uniqlo’s global fl agship
store at Orchard Central.
Rents
4.4
Rents in suburban areas eased by 0.5%
y-o-y amidst increasing competition
According to Edmund Tie & Company
Research, average monthly gross rent
of prime fi rst-storey retail spaces in the
suburban areas in Q3 2017 decreased by
0.5% y-o-y from $30.60 to $30.45 per sq ft
amidst increasing competition (Figure 4.4).
On the other hand, rents in the Orchard/
Scotts Road area stayed fl at at $37.20 per sq
ft in the same period.
Figure 4.4: Average Prime First-storey Monthly Gross Rent
$ per sq ft
50
45
40
35
30
25
20
15
10
5
0
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Orchard/Scotts Road
Suburban Areas
Other City Areas
37.20
30.45
19.77
Q1-Q3
2017
Source: Edmund Tie & Company, October 2017
Rents in the suburban areas were more
resilient compared to that in the Other City
Areas19, which decreased by 1.5% y-o-y
to $19.77 per sq ft per month. In general,
suburban malls have larger and stable
population catchment compared to that in
the Other City Areas, which is limited to the
working population in the Central Business
District (CBD). Trading hours in the Other
City Areas are therefore often limited to the
weekdays only.
19 Other city areas
consist of retail space
in the Downtown
Core and Rest of
Central Region (RCR).
46 ANNUAL REPORT 2017
Transaction
4.5
Only one major transaction of retail mall in 2017
There was only one major transaction in 2017. In Q2 2017, Jurong Point was sold by a joint-venture between Lee Kim
Tah Holdings and Guthrie GTA to Mercatus Co-operative, an NTUC social enterprise (Table 4.3).
Table 4.3: Major Transaction in 2017
Planning Areas
Jurong
Development
NLA (sq ft)
Transacted Price
Jurong Point
(2 Plots of Land: balance tenure of 76 years and 89 years)
658,000
$2,200 million
($3,343 per sq ft)
Source: Edmund Tie & Company, October 2017
5.0 OUTLOOK
Retailers need to adopt new
technology to step-up their
off erings
The digital economy is driving more
retailers to adopt new technologies
to step-up off erings and create
experiential retailing for customers
and improve competitiveness. We
expect that more retailers will make
use of the resources made available
via the Retail and Food Services ITMs
and RCoE to increase productivity
through use of technology.
Rents in suburban malls that are
well-located remain resilient
The global economic uncertainty
and increasing dominance of
e-commerce platforms have led to
a shift in consumer behavior. While
consumer confi dence remains
positive for H2 2017, as the retail
market continues to restructure,
pressure on rents is expected
to persist. To maintain healthy
occupancy, we expect landlords to
be more accommodative in in rent
negotiation with retailers. In general,
we expect rents in suburban areas to
remain subdued in 2018, registering
a decline between 0% and 4%.
Suburban malls that are better
located and enjoy stable shopper
traffi c will remain resilient and able
to hold their rental rates better.
Shopping centres along Orchard
Road are expected to benefi t
from the Government’s eff ort in
rejuvenating the area
Shopping centres in the Orchard/
Scotts Road area are more reliant
on the visitors to Singapore. The
tourism market has shown signs
of improvement in H1 2017 with
more visitors and tourist spending.
Alongside the government’s
continued eff ort in rejuvenating
Orchard Road, and supported by
the relatively higher occupancy
and limited pipeline supply, we
project rents in the Orchard/Scotts
Road area to ease by 0% to 3% in
2018, performing slightly better
in comparison to the suburban
retail areas. Strategically located
retail spaces, e.g. prime fi rst-storey
spaces, are expected to be more
resilient.
Limiting Conditions
Where it is stated in the report that information
has been supplied to us in the preparation
of this report by the sources listed, this
information is believed to be reliable and we
will accept no responsibility if this should
be otherwise. All other information stated
without being attributed directly to another
party is obtained from our searches of records,
examination of documents or enquiries with
relevant government authorities.
The forward statements in this report are based
on our expectations and forecasts for the
future. These statements should be regarded as
our assessment of the future, based on certain
assumptions on variables which are subject to
changing conditions. Changes in any of these
variables may signifi cantly aff ect our forecasts.
Utmost care and due diligence has been
taken in the preparation of this report. We
believe that the contents are accurate and our
professional opinion and advice are based on
prevailing market conditions as at the date of
the report. As market conditions do change,
we reserve the right to update our opinion
and forecasts based on the latest market
conditions.
Edmund Tie & Company (SEA) Pte Ltd gives
no assurance that the forecasts and forward
statements in this report will be achieved and
undue reliance should not be placed on them.
Edmund Tie & Company (SEA) Pte Ltd or
persons involved in the preparation of this
report disclaims all responsibility and will
accept no liability to any other party. Neither
the whole nor any part, nor reference thereto
may be published in any document, statement
or circular, nor in any communications with
third parties, without our prior written consent
of the form or context in which it will appear.
FRASERS CENTREPOINT TRUST
47
FCT PORTFOLIO OVERVIEW
AS AT 30 SEPTEMBER 2017
Causeway Point
Northpoint City
North Wing2
Yishun 10
Retail Podium
Net Lettable Area1 (NLA)
(Square Feet)
Number of Leases
Title
Year Purchased
Purchased Price
415,626
223
99 years leasehold
commencing 30/10/95
(77 years remaining)
2006
$606.17 million
Appraised Value
$1,190 million
218,172^
157
99 years leasehold
commencing 1/4/90
(71 years remaining)
10,412
9
2016
Northpoint 1: 2006
Northpoint 2: 2010
Northpoint 1:
$249.27 million
Northpoint 2:
$164.55 million
$733 million
$37.8 million
$39.5 million
As % of Total Portfolio
Appraised Value
FY2017 Gross Revenue
($’000)
FY2017 Net Property
Income ($’000)
Occupancy Rate
Key Tenants by gross
rental income
Annual Shopper Traffi c
in FY2017
Connectivity
44.6%
84,723
65,539
99.5%
27.5%
1.5%
42,029#
29,742#
81.6%#
Metro, Courts, Cold
Storage supermarket,
Cathay Cineplexes, Food
Republic, Uniqlo
Kopitiam food court, Cold Storage supermarket, OCBC
Bank, United Overseas Bank, MayBank, McDonald’s
restaurant and Popular bookstore
24.5 million
41.3 million
Woodlands MRT station
(North South Line
and future Thomson-
East Coast Line) & Bus
Interchange
Yishun MRT station (North South Line)
& Bus Interchange
1 Net lettable area as stated in valuation reports dated 30 September 2017 for the respective assets
2 Northpoint City North Wing was formerly known as Northpoint Shopping Centre
^ The NLA was reduced from 225,032 sq ft (as reported in FY2016 valuation report) to 218,172 sq ft due to reconfi guration of
the area in conjunction with the AEI
# The property’s operating performance and occupancy in FY2017 was aff ected by the asset enhancement initiative works (AEI)
48 ANNUAL REPORT 2017
Changi City Point
Bedok Point
YewTee Point
Anchorpoint
207,239
118
82,713
40
73,670
68
60 years leasehold
commencing 30/4/09
(51 years remaining)
99 years leasehold
commencing 15/3/78
(59 years remaining)
99 years leasehold
commencing 3/1/06
(87 years remaining)
70,989
55
Freehold
2014
2011
2010
2006
$305.0 million
$127.0 million
$125.65 million
$36.02 million
$318 million
$105 million
$178 million
$104.6 million
11.9%
24,536
15,932
88.5%
3.9%
7,338
3,663
85.2%
6.7%
14,448
10,049
95.7%
3.9%
8,521
4,633
96.2%
Kopitiam food court,
Uniqlo, Nike, Tung Lok and
Challenger
Harvey Norman,
GymmBoxx, Sushi Express
and Ssiksin Korea BBQ
NTUC FairPrice, Koufu
food court, Watson’s and
KFC
Cold Storage supermarket,
Bukang Korean BBQ &
Seafood, Koufu food
court, Xin Wang HK Café,
Sakuraya, Charles & Keith
and Cotton On
12.3 million
4.4 million
12.7 million
3.2 million
Expo MRT station (East
West Line, and Downtown
Line)
Bedok MRT station
(East West Line) & Bus
Interchange
YewTee MRT station (North
South Line) & Bus Stop
Near Queenstown MRT
station (East West Line) &
Bus Stop
FRASERS CENTREPOINT TRUST
49
MALL PROFILES
CAUSEWAY POINT
Description
Seven retail levels (including one
basement level) and seven car park
levels (B2, B3 and 2nd - 6th levels)
Address
1 Woodlands Square,
Singapore 738099
Net Lettable Area
415,626 square feet1
Car Park Lots
839
Title
99 years leasehold w.e.f 30 Oct 1995
Year Acquired by FCT
2006
Market Valuation
$1,190.0 million as at 30 Sep 2017
Annual Shopper Traffi c
24.5 million (Oct 2016 – Sep 2017)
Senior Centre Manager
Ms Elsie Goh
Key Tenants
Metro, Courts, Cold Storage
supermarket, Cathay Cineplexes,
Food Republic, Uniqlo
Causeway Point is the largest mall in Woodlands, one of Singapore’s
most populous residential estates. It is conveniently located next to the
Woodlands regional bus interchange and the Woodlands MRT station,
which will serve as an interchange station for the existing North-South
line and the new Thomson line in the future.
With more than 200 stores and food outlets spread over seven retail
levels (including basement level), Causeway Point off ers its shoppers
a one-stop shopping and dining destination. The mall recorded gross
revenue of $84.7 million in FY2017, up 2.0% year-on-year. The mall
attracted 24.5 million shoppers in FY2017.
Causeway Point is the winner of BCA Universal Design GoldPlus award in
2015 for its emphasis in incorporating user-friendliness, connectivity and
safety aspects in its mall design and features. The mall is also awarded
the Platinum Award in the BCA’s Green Mark program for its host of
environmental-friendly features that reduces its energy consumption and
carbon footprint.
MALL PERFORMANCE HIGHLIGHTS
Financial Year ended
30 September ($’000)
Gross Revenue
Property Expenses
Net Property Income
Occupancy
Shopper Traffi c (million)
1
As indicated in the valuation report for
Causeway Point, dated 30 September
2017, by Knight Frank Pte Ltd
50 ANNUAL REPORT 2017
Increase/
(Decrease)
2.0%
(8.6%)
5.7%
FY2017
FY2016
83,022
20,991
62,031
84,723
19,184
65,539
99.5%
24.5
99.8%
(0.3%-point)
24.6
(0.4%)
Top 10 Tenants
(as at 30 September 2017)
Metro (Private) Limited1
Courts (Singapore) Limited
Cold Storage Singapore (1983) Pte Ltd2
Food Republic Pte Ltd
Cathay Cineplexes Pte Ltd
Uniqlo (Singapore) Pte Ltd
McDonald's Restaurants Pte Ltd
Aspial Corporation Ltd3
Copitiam Pte Ltd4
RE&S Enterprises5
Total
TOP 10 TENANTS
As at 30 September 2017, Causeway
Point has a total of 223 leases
(FY2016: 227), excluding vacancy.
The key tenants include Metro,
Courts, Cold Storage Supermarket,
Food Republic and Cathay
Cineplexes, among others. The top
10 tenants contributed collectively,
33.7% (FY2016: 33.3%) of the mall’s
total gross rental income.
% of Mall’s Gross
Rental Income
7.6%
6.1%
5.2%
3.9%
2.3%
2.2%
1.9%
1.6%
1.5%
1.4%
33.7%
Includes leases for Metro Department Store & Clinique Service Centre
Includes leases for Cold Storage supermarket, Guardian Pharmacy and 7-Eleven stores
Includes leases for Lee Hwa Jewellery, CITIGEMs and Goldheart Jewellery
1
2
3
4 Operator of Kopitiam food court
5 Operator of Kuriya Japanese Market and Ichiban Boshi restaurant
Trade Classifi cations
(in descending order of % rent)
By Net
Lettable Area
By Gross
Rental Income6
1
2
Food & Restaurants
Fashion
3 Household
4 Department Store
5
6
7
8
Services/Education
Beauty, Hair, Cosmetics, Personal
Care
Supermarket
Sports Apparels & Equipment
9 Healthcare
10 Leisure/Entertainment
11 Books, Music, Art & Craft, Hobbies
12 Vacant
Total
6
Excludes gross turnover rent
LEASE EXPIRY PROFILE7
As at 30 Sep 2017
23.2%
17.2%
12.4%
14.4%
4.9%
4.4%
5.7%
2.3%
1.9%
9.3%
3.8%
0.5%
28.6%
22.7%
11.0%
7.5%
7.4%
7.0%
3.4%
3.4%
3.2%
2.9%
2.9%
0.0%
100.0%
100.0%
TRADE SECTOR ANALYSIS
Food & Restaurants contributed
28.6%, (FY2016: 28.5%) of the mall’s
gross rental income, followed by
the Fashion trade at 22.7% (FY2016:
23.6%). These two trades account
for 51.3% of the mall’s gross rental
income. The breakdown of the trade
sector analysis by net lettable area
and gross rental income is presented
on the left.
Number of Leases Expiring
75
73
72
3
-
FY2018
FY2019
FY2020
FY2021
FY2022
Total
223
Net Lettable Area of Expiring Leases (square feet)
106,927
149,501
130,585
27,035
- 414,048
Expiries as % of Mall’s Total Leased Area
Gross Rental Income (GRI) Contribution of Expiring
Leases as % of Mall’s Total GRI
7
Excludes vacancy
25.8%
27.4%
36.1%
34.7%
31.6%
33.4%
6.5%
4.5%
0.0% 100.0%
0.0% 100.0%
FRASERS CENTREPOINT TRUST
51
MALL PROFILES
NORTHPOINT CITY NORTH WING
Description
Six retail levels (including two basement
levels) and three levels of car park (B1 - B3)
Address
930 Yishun Avenue 2, Northpoint,
Singapore 769098
Net Lettable Area
218,172 square feet1
Car Park Lots
157
Title
99 years leasehold w.e.f 1 Apr 1990
Year Acquired by FCT
2006 (Northpoint 1),
2010 (Northpoint 2)
Market Valuation
$733.0 million as at 30 Sep 2017
Annual Shopper Traffi c
41.3 million (Oct 2016 – Sep 2017)
Senior Centre Manager
Ms Cynthia Ng
Key Tenants
Kopitiam food court, Cold Storage
supermarket, OCBC Bank, United Overseas
Bank, Popular bookstore and McDonald’s
restaurant
YISHUN 10 RETAIL PODIUM
Description
Ten retail units on the fi rst storey in a
cinema complex with basement carpark
Address
51 Yishun Central 1, Yishun 10,
Singapore 768794
Net Lettable Area
10,412 square feet2
Title
99 years leasehold w.e.f 1 Apr 1990
Year Acquired by FCT
2016
Market Valuation
$39.5 million as at 30 Sep 2017
Senior Centre Manager
Ms Cynthia Ng
Key Tenants
BurgerUp and Singapore Post
NORTHPOINT CITY NORTH WING
AND YISHUN 10 RETAIL PODIUM
Northpoint City North Wing, formerly known as Northpoint Shopping
Centre, is FCT’s second largest property by net lettable area after
Causeway Point. Together with the new Northpoint City South Wing
(owned by FCT’s sponsor, Frasers Centrepoint Limited), the two retail
wings form Northpoint City with combined retail area of more than
500,000 square feet.
Northpoint City North Wing underwent a $60 million asset enhancement
initiative (AEI) work recently. The rejuvenated North Wing added new
retailers and F&B tenants improving shopping ambience. The North Wing
is integrated with the South Wing to provide shoppers with seamless
connectivity between the two retail wings as well as to the Yishun MRT
station and bus interchange.
Northpoint City North Wing off ers six retail levels of shopping (including
two basement levels) and has a total of 157 tenants. Key tenants at
Northpoint City North Wing include Cold Storage supermarket, Kopitiam
food court and Popular bookstore. The mall enjoys high shopper traffi c
fl ow from the surrounding residential estate and schools. Shopper traffi c
in FY2017 was 41.3 million.
FCT also owns ten strata-titled retail units in the Yishun 10 retail podium.
These retail units were acquired on 16 November 2016. The Yishun 10
retail podium is located next to Northpoint City North Wing. The key
tenants at Yishun 10 retail podium are Egalite F&B Pte Ltd (operator of
BurgerUp) and Singapore Post Limited.
MALL PERFORMANCE HIGHLIGHTS
Financial Year ended
30 September ($’000)
Gross Revenue
Property Expenses
Net Property Income
Occupancy
Shopper Traffi c (million)
Increase/
(Decrease)
(6.5%)
5.7%
(10.8%)
FY2017(a)
FY2016
42,029
44,962
11,629
33,333
12,287
29,742
81.6%
41.3
70.9%
10.7%-point
45.2
(8.6%)*
(a)
*
1
2
Included the results of Yishun 10 retail podium acquired on 16 November 2016
Shopper traffi c was aff ected by the asset enhancement initiative (AEI) works
As indicated in the valuation report for Northpoint City North Wing, dated 30 September 2017, by Savills
Valuation and Professional Services (S) Pte Ltd
As indicated in the valuation report titled “First Storey Retail Podium at 51 Yishun Central 1, Yishun
10, Singapore 768794”, dated 30 September 2017, by Colliers International Consultancy & Valuation
(Singapore) Pte Ltd
52 ANNUAL REPORT 2017
Top 10 Tenants
(as at 30 September 2017)
Copitiam Pte Ltd1
Cold Storage Singapore (1983) Pte Ltd2
Overseas-Chinese Banking Corporation Ltd
United Overseas Bank Ltd
Malayan Banking Berhad
McDonald's Restaurants Pte Ltd
Popular Book Company Pte Ltd
Egalite F&B Pte Ltd3
XWS Pte Ltd4
Sushi-Tei Pte Ltd
Total
Includes leases for Cold Storage supermarket and Guardian Pharmacy
1 Operator of Kopitiam food court
2
3 Operates BurgerUp at Yishun 10 Retail Podium
4 Operates Xin Wang HK Café at Northpoint City North Wing
% of Mall’s Gross
Rental Income
6.9%
5.6%
3.5%
2.3%
2.3%
1.7%
1.7%
1.6%
1.6%
1.4%
28.6%
Trade Classifi cations
(in descending order of % rent)
By Net
Lettable Area
By Gross
Rental Income5
1
2
3
4
Food & Restaurants
Fashion
Services/Education
Beauty, Hair, Cosmetics, Personal
Care
5 Healthcare
6
7
Supermarket
Books, Music, Art & Craft, Hobbies
8 Household
9
Sports Apparels & Equipment
10 Leisure / Entertainment
11 Vacant
Total
5
Excludes gross turnover rent
35.1%
10.1%
7.2%
4.9%
3.8%
7.4%
6.0%
2.6%
2.4%
2.1%
18.4%
100.0%
44.4%
17.1%
12.6%
6.7%
5.5%
4.4%
3.7%
2.4%
2.2%
1.0%
0.0%
100.0%
LEASE EXPIRY PROFILE6
Northpoint City North Wing and Yishun 10 retail podium, as at 30 Sep 2017
TOP 10 TENANTS
As at 30 September 2017, Northpoint
City North Wing has a total of 157
leases, excluding vacancy (FY2016:
131) and the Yishun 10 retail
podium has total of 9 leases (also
excluding vacancy). The key tenants
in Northpoint City North Wing
(including Yishun 10 retail podium)
include Copitiam (Operator of
Kopitiam food court), Cold Storage
supermarket, OCBC Bank, United
Overseas Bank, Malayan Banking
Berhad (MayBank), among others.
The top 10 tenants contributed
collectively 28.6% (FY2016: 29.9%) of
the total gross rental income.
TRADE SECTOR ANALYSIS
Food & Restaurants contributed
44.4%, (FY2016: 27.1%) of the mall’s
gross rental income, followed by
the Fashion trade at 17.1% (FY2016:
25.9%). The year-on-year variance
in the trade mix was attributed to
the reconfi guration of the mall and
tenant mix strategy in conjunction
with the asset enhancement
initiative (AEI) of the property. The
breakdown of the trade sector
analysis by net lettable area and
gross rental income is presented
on the left.
Number of Leases Expiring
44
35
81
3
3
FY2018
FY2019
FY2020
FY2021
FY2022
Total
166
Net Lettable Area of Expiring Leases (square feet)
36,976
27,843
86,164
14,189
21,387
186,559
Expiries as % of Mall’s Total Leased Area
Gross Rental Income (GRI) Contribution of Expiring
Leases as % of Mall’s Total GRI
6
Excludes vacancy
19.8%
21.7%
14.9%
19.5%
46.2%
47.6%
7.6%
3.9%
11.5% 100.0%
7.3% 100.0%
FRASERS CENTREPOINT TRUST
53
MALL PROFILES
CHANGI CITY POINT
Description
Three retail levels (including one
basement level)
Address
5 Changi Business Park Central 1,
Changi City Point,
Singapore 486038
Net Lettable Area
207,239 square feet1
Car Park Lots
6272
Title
60 years leasehold w.e.f 30 Apr
2009
Year Acquired by FCT
2014
Market Valuation
$318.0 million as at 30 Sep 2017
Annual Shopper Traffi c
12.3 million (Oct 2016 – Sep 2017)
Senior Centre Manager
Ms Jazmine Lim
Key Tenants
Kopitiam food court, Uniqlo, Nike,
Tung Lok and Challenger
1
As indicated in the valuation report for
Changi City Point, dated 30 September
2017, by Colliers International Consultancy
& Valuation (Singapore) Pte Ltd
2 The car park lots are shared between
Changi City Point, Capri By Fraser and
ONE@Changi City
54 ANNUAL REPORT 2017
Changi City Point is a three-storey retail mall (with one basement)
located in Changi Business Park, next to the Singapore Expo MRT station
and near one of Singapore’s largest convention and exhibition venues,
the Singapore Expo. Changi City Point is the third largest by net lettable
area among Frasers Centrepoint Trust’s portfolio of six retail malls.
The mall off ers diverse shopping and dining experience especially for
the working population in Changi Business Park; residents in nearby
precincts such as Tampines, Bedok and Simei; and the visitors to the
Singapore Expo. Changi City Point features fashion and sports retailers
including Uniqlo, Nike, Timberland, Adidas, Quiksilver, 2XU, Asics, New
Balance, Puma and many other outlets stores. Shoppers can also do their
grocery shopping at the NTUC Finest supermarket. The restaurants at
the mall include Tung Lok Signatures, Jollibee, Ichiban Sushi, Han’s and
the Kopitiam food court. Families can also enjoy the landscaped rooftop
garden that also features a wet and dry children’s playground.
MALL PERFORMANCE HIGHLIGHTS
Financial Year ended
30 September ($’000)
Gross Revenue
Property Expenses
Net Property Income
Occupancy
Shopper Traffi c (million)
FY2017
FY2016
24,536
8,604
15,932
88.5%
12.3
24,427
9,069
15,358
81.1%
11.7
Increase/
(Decrease)
0.4%
(5.1%)
3.7%
7.4%-point
5.1%
Top 10 Tenants
(as at 30 September 2017)
Copitiam Pte Ltd1
Uniqlo (Singapore) Pte Ltd
NIKE Singapore Pte Ltd
Tung Lok Millennium Pte Ltd
Challenger Technologies Limited
Golden Beeworks2
RE & S Enterprise Pte Ltd3
RSH (Singapore) Pte Ltd4
Ootoya Asia Pacifi c Pte. Ltd
Bachmann Japanese Restaurant Pte Ltd
Total
TOP 10 TENANTS
As at 30 September 2017, Changi
City Point has a total of 118 leases
(FY2016: 115), excluding vacancy.
The key tenants include Kopitiam
food court, Uniqlo, Nike, Tung Lok
and Challenger, among others.
The top 10 tenants contributed
collectively, 28.5% (FY2016: 31.9%)
of the mall’s total gross rental
income.
% of Mall’s Gross
Rental Income
9.10%
3.60%
2.30%
2.10%
2.00%
2.00%
1.90%
1.90%
1.80%
1.80%
28.5%
1 Operator of Kopitiam food court
2 Operates the Jollibee restaurant at Changi City Point
3 Operates the Ichiban Sushi restaurant at Changi City Point
4 Operates the Quiksilver, Lacoste outlet store and Royal Sporting House outlet store
at Changi City Point
Trade Classifi cations
(in descending order of % rent)
By Net
Lettable Area
By Gross
Rental Income5
1
2
3
4
Food & Restaurants
Fashion
Sports Apparels & Equipment
Services/Education
5 Household
6 Department Store
7
Beauty, Hair, Cosmetics, Personal
Care
8 Healthcare
9
Supermarket/Hypermarket
10 Books, Music, Art & Craft, Hobbies
11 Vacant
Total
5
Excludes gross turnover rent
LEASE EXPIRY PROFILE6
As at 30 Sep 2017
36.3%
19.7%
9.9%
4.2%
4.3%
5.1%
1.3%
1.6%
5.6%
0.5%
11.5%
100.0%
49.4%
24.0%
7.9%
4.8%
4.4%
2.6%
2.4%
2.4%
1.6%
0.5%
0.0%
100.0%
TRADE SECTOR ANALYSIS
Food & Restaurants contributed
49.4%, (FY2016: 54.1%) of the mall’s
gross rental income, followed by
the Fashion trade at 24.0% (FY2016:
23.2%). The year-on-year variance
was mainly attributed to tenant-
remixing eff orts at the mall. The
breakdown of the trade sector
analysis by net lettable area and
gross rental income is presented
on the left.
Number of Leases Expiring
53
23
34
4
4
FY2018
FY2019
FY2020
FY2021
FY2022
Total
118
Net Lettable Area of Expiring Leases (square feet)
52,629
21,054
61,237
19,451
28,955 183,326
Expiries as % of Mall’s Total Leased Area
Gross Rental Income (GRI) Contribution of Expiring
Leases as % of Mall’s Total GRI
6
Excludes vacancy
28.7%
36.0%
11.5%
15.5%
33.4%
29.8%
10.6%
4.9%
15.8% 100.0%
13.8% 100.0%
FRASERS CENTREPOINT TRUST
55
MALL PROFILES
BEDOK POINT
Description
Five retail levels (including one
basement level) and one basement
car park
Address
799 New Upper Changi Road,
Singapore 467351
Net Lettable Area
82,713 square feet1
Car Park Lots
76
Title
99 years leasehold w.e.f 15 Mar 1978
Year Acquired by FCT
2011
Market Valuation
$105.0 million as at 30 Sep 2017
Annual Shopper Traffi c
4.4 million (Oct 2016 – Sep 2017)
Centre Manager
Ms Donna Oh
Key Tenants
Harvey Norman, GymmBoxx,
Sushi Express and Ssiksin Korea BBQ
Bedok Point has fi ve retail levels (including one basement level) and one
basement car park. The mall is located in the town centre of Bedok,
which is one of the largest residential estates in Singapore by population.
The mall is well-served by the nearby Bedok MRT station and the Bedok
bus interchange.
The mall off ers an exciting array of restaurants, food outlets, enrichment
centres, retail and service off erings that makes it an attractive destination
for families, students and PMEBs (Professionals, Managers, Executives
and Businessmen) around the precinct. The tenants at Bedok Point
include Harvey Norman, GymmBoxx, Sushi Express and Ssiksin Korea
BBQ, among others. Bedok Point was awarded the BCA Green Mark Gold
Award.
MALL PERFORMANCE HIGHLIGHTS
Financial Year ended
30 September ($’000)
Gross Revenue
Property Expenses
Net Property Income
Occupancy
Shopper Traffi c (million)
1
As indicated in the valuation report for
Bedok Point, dated 30 September 2017,
by Savills Valuation and Professional
Services (s) Pte Ltd
56 ANNUAL REPORT 2017
FY2017
FY2016
Increase/
(Decrease)
(12.0%)
(10.5%)
(13.3%)
8,334
4,108
4,226
95.0%
(9.8%-point)
4.4
No change
7,338
3,675
3,663
85.2%
4.4
Top 10 Tenants
(as at 30 September 2017)
Pertama Merchandising Pte Ltd1
Gymmboxx Pte Ltd
Sushi Express Pte Ltd2
Korea Buff et Pte Ltd3
Singapore Saizeriya Pte Ltd
Zensho Food Singapore Pte Ltd4
NTUC Club
SG Chicken Hotpot
The Learning Lab
Cristofori Music
Total
1 Operator of the Harvey Norman Store at Bedok Point
2 Operator of Sushi Express at Bedok Point
3 Operator of Ssiksin Korea BBQ at Bedok Point
4 Operator of Long John Silver at Bedok Point
% of Mall’s Gross
Rental Income
8.9%
7.4%
7.1%
4.5%
3.6%
3.5%
3.5%
3.3%
3.3%
3.2%
48.3%
TOP 10 TENANTS
As at 30 September 2017, Bedok
Point has a total of 40 leases
(FY2016: 50), excluding vacancy.
The key tenants include Pertama
Merchandising Pte Ltd (operator
of Harvey Norman), GymmBoxx,
Sushi Express, Korea Buff et Pte Ltd
(operator of Ssiksin), among others.
The top 10 tenants contributed
collectively, 48.3% (FY2016: 46.2%)
of the mall’s total gross rental
income.
Trade Classifi cations
(in descending order of % rent)
By Net
Lettable Area
By Gross
Rental Income5
1
2
Food & Restaurants
Services/Education
3 Household
Beauty, Hair, Comestics, Personal
Care
Leisure/Entertainment
Fashion
4
5
6
7 Healthcare
8
Vacant
Total
5
Excludes gross turnover rent
LEASE EXPIRY PROFILE6
As at 30 Sep 2017
25.8%
25.9%
18.5%
6.8%
6.6%
1.0%
0.6%
14.8%
100.0%
41.6%
25.3%
12.3%
10.6%
6.3%
2.2%
1.7%
0.0%
100.0%
TRADE SECTOR ANALYSIS
Food & Restaurants contributed
41.6%, (FY2016: 44.9%) of the mall’s
gross rental income, followed by
the Services and Education trade
at 28.8% (FY2016: 18.8%). The
breakdown of the trade sector
analysis by net lettable area and
gross rental income is presented
on the left.
FY2018
FY2019
FY2020
FY2021
FY2022
Total
Number of Leases Expiring
20
6
11
Net Lettable Area of Expiring Leases (square feet)
23,697
10,591
24,901
Expiries as % of Mall’s Total Leased Area
Gross Rental Income (GRI) Contribution of Expiring
Leases as % of Mall’s Total GRI
33.6%
42.3%
15.0%
14.7%
35.3%
30.5%
2
9,084
12.9%
10.1%
1
40
2,236
70,509
3.2% 100.0%
2.4% 100.0%
6
Excludes vacancy
FRASERS CENTREPOINT TRUST
57
MALL PROFILES
YEWTEE POINT
Description
Two retail levels (including one
basement level) and one basement
car park
Address
21 Choa Chu Kang North 6,
Singapore 689578
Net Lettable Area
73,670 square feet1
Car Park Lots
832
Title
99 years leasehold w.e.f 3 Jan 2006
Year Acquired by FCT
2010
Market Valuation
$178.0 million as at 30 Sep 2017
Annual Shopper Traffi c
12.7 million (Oct 2016 – Sep 2017)
Centre Manager
Ms Emily Fong
Key Tenants
NTUC FairPrice, Koufu food court,
Watson’s, KFC
YewTee Point has two retail levels (including one basement level). The
mall is located in Yew Tee, a housing estate within a major residential
precinct of Choa Chu Kang, northwest of Singapore. YewTee Point is
served by the adjacent Yew Tee MRT station and public bus services.
YewTee Point’s key tenants include NTUC FairPrice, Koufu food court,
Watson’s and KFC, among others. It draws shoppers from the private
apartments located above the mall (YewTee Residence), the Yew Tee
housing estate, schools, military camp and the nearby industrial estate.
Total shopper traffi c to the mall in FY2017 was 12.7 million.
MALL PERFORMANCE HIGHLIGHTS
Financial Year ended
30 September ($’000)
Gross Revenue
Property Expenses
Net Property Income
Occupancy
Shopper Traffi c (million)
FY2017
FY2016
14,448
4,399
14,343
4,137
10,049
10,206
Increase/
(Decrease)
0.7%
6.3%
(1.5%)
95.7%
12.7
98.7%
(3.0%-point)
12.7
No change
1
As indicated in the valuation report for
YewTee Point, dated 30 September 2017,
by Savills Valuation and Professional
Services (s) Pte Ltd
2 Part of limited common property for the
exclusive benefi t of YewTee Point
58 ANNUAL REPORT 2017
Top 10 Tenants
(as at 30 September 2017)
NTUC FairPrice Co-operative Ltd1
Koufu Pte Ltd2
Watson's Personal Care Stores Pte Ltd
Kentucky Fried Chicken Management Pte Ltd
Shakura Pigmentation Pte Ltd
West Co'z Café Ptd Ltd
XWS Pte Ltd3
Zensho Food Singapore Pte Ltd4
BreadTalk Pte Ltd5
London Weight Management
Total
Includes leases for NTUC Fairprice and NTUC Healthcare (Unity)
1
2 Operator of Koufu food court
3 Operator of Xin Wang HK Café
4 Operator of Long John Silver’s
5 Operator of ToastBox
% of Mall’s Gross
Rental Income
20.3%
10.2%
3.8%
3.7%
2.7%
2.3%
2.2%
2.0%
2.0%
1.9%
51.1%
Trade Classifi cations
(in descending order of % rent)
By Net
Lettable Area
By Gross
Rental Income6
1
2
3
Food & Restaurants
Supermarket
Beauty, Hair, Cosmetics, Personal
Care
4 Healthcare
5
Services/Education
6 Household
7
8
9
Fashion
Books, Music, Art & Craft, Hobbies
Vacant
Total
6
Excludes gross turnover rent
LEASE EXPIRY PROFILE7
As at 30 Sep 2017
40.3%
23.5%
13.4%
7.1%
4.5%
2.9%
2.0%
2.0%
4.3%
42.0%
18.8%
16.6%
9.4%
4.6%
3.1%
3.0%
2.5%
0.0%
100.0%
100.0%
TOP 10 TENANTS
As at 30 September 2017, YewTee
Point has a total of 68 leases
(FY2016: 74), excluding vacancy. The
key tenants include NTUC FairPrice,
Koufu food court, Watson’s and KFC,
among others. The top 10 tenants
contributed collectively, 51.1%
(FY2016: 49.4%) of the mall’s total
gross rental income.
TRADE SECTOR ANALYSIS
Food & Restaurants contributed
42.0%, (FY2016: 39.5%) of the mall’s
gross rental income, followed by the
supermarket trade at 18.8% (FY2016:
18.0%). The breakdown of the trade
sector analysis by net lettable area
and gross rental income is presented
on the left.
FY2018
FY2019
FY2020
FY2021
FY2022
Total
Number of Leases Expiring
37
18
11
Net Lettable Area of Expiring Leases (square feet)
37,966
13,603
17,794
Expiries as % of Mall’s Total Leased Area
Gross Rental Income (GRI) Contribution of Expiring
Leases as % of Mall’s Total GRI
53.9%
56.5%
19.3%
20.1%
25.2%
22.1%
2
1,141
1.6%
1.3%
-
-
68
70,504
0.0% 100.0%
0.0% 100.0%
7
Excludes vacancy
FRASERS CENTREPOINT TRUST
59
MALL PROFILES
ANCHORPOINT
Description
Two retail levels (including one
basement level) and an adjacent a
two-storey restaurant building
Address
368 and 370 Alexandra Road
Singapore 159952/159953
Net Lettable Area
70,989 square feet1
Car Park Lots
1282
Title
Freehold
Year Acquired by FCT
2006
Market Valuation
$104.6 million as at 30 Sep 2017
Annual Shopper Traffi c
3.2 million (Oct 2016 – Sep 2017)
Centre Manager
Mr Raymond Chan Kin
Key Tenants
Cold Storage, Bukang Korean BBQ
& Seafood, Koufu, Xin Wang Hong
Kong Cafe
Anchorpoint has two retail levels (including one basement level) and
an adjacent a 2-storey restaurant building. The mall is located along
Alexandra Road, opposite to the popular large home furnishing store
IKEA and Park Hotel Alexandra. Anchorpoint is well-served by public bus
services as well as scheduled shuttle bus service between the mall and
the nearby offi ces in the Alexandra area.
Anchorpoint off ers an exciting range of eateries and restaurants, retail
shopping and boutique outlets. The stores and restaurants at Anchorpoint
include Cold Storage supermarket, Bukang Korean BBQ & Seafood
restaurant, Koufu (food court), Xin Wang HK Café, the Sakuraya Japanese
restaurant as well as reputable retailers such as Charles & Keith and
Cotton On, among others.
Total shopper traffi c to the mall in FY2017 was 3.2 million. Anchorpoint
was awarded the Singapore Service Class Award (2012 – 2015) by Spring
Singapore.
MALL PERFORMANCE HIGHLIGHTS
1
As indicated in the valuation report for
Anchorpoint, dated 30 September 2017, by
Savills Valuation and Professional Services
(S) Pte Ltd
2 Located at Anchorpoint but are part of a
common property of strata sub-divided
mixed-use development, which comprises
Anchorpoint and The Anchorage (a
condominium), managed by the MCST
Title plan No.2304
Financial Year ended
30 September ($’000)
Gross Revenue
Property Expenses
Net Property Income
Occupancy
Shopper Traffi c (million)
FY2017
FY2016
8,521
3,888
4,633
96.2%
3.2
8,728
4,030
4,698
96.7%
3.4
Increase/
(Decrease)
(2.4%)
(3.5%)
(1.4%)
(0.5%-point)
(5.9%)
60 ANNUAL REPORT 2017
Top 10 Tenants
(as at 30 September 2017)
Cold Storage (1983) Singapore Pte Ltd1
Cotton On Singapore Pte Ltd
Koufu Pte Ltd
XWS Pte Ltd2
Bukang Tuna Pte. Ltd.3
Sakuraya Foods Pte Ltd
JP Food Service Pte Ltd4
Watson's Personal Care Stores Pte Ltd
Sarika Connoisseur Cafe Pte Ltd5
Charles & Keith (Singapore) Pte Ltd
Total
% of Mall’s Gross
Rental Income
11.5%
7.1%
6.8%
4.8%
4.8%
4.2%
3.9%
3.6%
3.2%
2.7%
52.6%
TOP 10 TENANTS
As at 30 September 2017,
Anchorpoint has a total of 55 leases
(FY2016: 58), excluding vacancy. The
key tenants include Cold Storage
supermarket, Cotton On, Koufu
(food court), Xin Wang HK Café,
the Sakuraya Japanese restaurant,
among others. The top 10 tenants
contributed collectively, 52.6%
(FY2016: 49.3%) of the mall’s total
gross rental income.
Includes leases for Cold Storage supermarket and 7-Eleven store
1
2 Operator of Xin Wang HK Café at Anchorpoint
3 Operator of Bukang Korea BBQ & Seafood
4 Operator of Jack’s Place Restaurant at Anchorpoint
5 Operator of The Coff ee Connoisseur at Anchorpoint
Trade Classifi cations
(in descending order of % rent)
By Net
Lettable Area
By Gross
Rental Income6
1
2
3
4
5
Food & Restaurants
Fashion
Supermarket
Beauty, Hair, Cosmetics, Personal
Care
Services/Education
6 Household
7
Books, Music, Art & Craft, Hobbies
8 Healthcare
9
Vacant
Total
6
Excludes gross turnover rent
LEASE EXPIRY PROFILE7
As at 30 Sep 2017
41.7%
17.0%
15.2%
7.8%
7.7%
4.7%
1.2%
0.9%
3.8%
43.9%
19.5%
11.0%
10.1%
8.0%
4.7%
1.9%
0.9%
0.0%
100.0%
100.0%
TRADE SECTOR ANALYSIS
Food & Restaurants contributed
43.9%, (FY2016: 41.6%) of the mall’s
gross rental income, followed by
the Fashion trade at 19.5% (FY2016:
20.1%). The breakdown of the trade
sector analysis by net lettable area
and gross rental income is presented
on the left.
Number of Leases Expiring
14
21
18
1
1
55
Net Lettable Area of Expiring Leases (square feet)
9,908
34,337
17,512
1,819
4,704
68,280
FY2018
FY2019
FY2020
FY2021
FY2022
Total
Expiries as % of Mall’s Total Leased Area
Gross Rental Income (GRI) Contribution of Expiring
Leases as % of Mall’s Total GRI
7
Excludes vacancy
14.5%
15.9%
50.3%
45.1%
25.6%
31.0%
2.7%
3.2%
6.9% 100.0%
4.8% 100.0%
FRASERS CENTREPOINT TRUST
61
MALL DIRECTORY
Causeway Point
1 Woodlands Square,
Singapore 738099
(65) 6894 2237
Northpoint City North Wing
930 Yishun Avenue 2,
Singapore 769098
Yishun 10 retail podium
51 Yishun Central 1 Yishun 10,
Singapore 768794
(65) 6754 2300
Changi City Point
Bedok Point
5 Changi Business Park Central 1,
Changi City Point,
Singapore 486038
799 New Upper Changi Road,
Singapore 467351
(65) 6481 1353
(65) 6511 1088
YewTee Point
Anchorpoint
21 Choa Chu Kang North 6,
Singapore 689578
368 and 370 Alexandra Road,
Singapore 159952/159953
(65) 6465 1986
(65) 6475 2257
62 ANNUAL REPORT 2017
INVESTMENT IN HEKTAR REIT
As at 30 September 2017, FCT holds 31.15% of the units in Hektar Real Estate Investment Trust (“H-REIT”). H-REIT, an
associate of FCT, is a retail-focused REIT in Malaysia listed on the Main Market of Bursa Malaysia Securities Berhad.
Its property portfolio comprises Subang Parade (Selangor), Mahkota Parade (Melaka), Wetex Parade (Johor), Central
Square (Kedah), Landmark Central (Kedah) and Segamat Central (Johor). H-REIT acquired Segamat Central (Johor),
previously known as 1Segamat, on 18 September 2017.
The properties in H-REIT portfolio have a total net lettable area of 2.0 million square feet.
HEKTAR PROPERTY PROFILE#
As at 31 December 2016
State
Title
Net Lettable Area (Retail),
square feet
Tenancies
Occupancy
Visitor Traffi c FY2016 (million)
Purchase Price (million RM)
Valuation (million RM)
Subang
Parade
Mahkota
Parade
Selangor
Melaka
Wetex
Parade
Johor
Central
Square
Kedah
Landmark
Central
Segamat
Central*
Kedah
Johor
Freehold Leasehold(a)
Freehold
Freehold
Freehold Leasehold(b)
507,150
519,542
159,153
311,230
281,388
223,439(c)
122
93.0%
9.2
287.0
427.2
115
96.4%
9.4
257.5
322.4
76
100.0%
4.6
117.5
135.2
70
96.6%
3.9
83.3
95.7
67
70(c)
98.9%
95.9%(c)
3.0
98.0
112.0
N.A.
104.0
105.0(d)
(a) Leasehold is until year 2101
(b) Leasehold is until year 2100
(c) as at 30 June 2017
(d) as at 22 June 2017
*
# Source: H-REIT Annual Report 2016 and its website at http://www.hektarreit.com/ [accessed: 8 November 2017]
Segamat Central was acquired by H-REIT on 18 September 2017
HEKTAR REIT ’S TOP 10 TENANTS#
The top ten tenants in the Hektar’s portfolio contributed approximately 28.6% of total monthly rental income.
Tenant
Trade Sector
NLA (Sq ft)
% of Total
NLA
% of Monthly
Rental Income1
Parkson
The Store
Seleria
Giant
MBO
Bata
McDonald’s
KFC
Department Store / Supermarket
Department Store / Supermarket
Food & Beverage
Department Store / Supermarket
Leisure & Entertainment / Sports & Fitness
Fashion & Footwear
Food & Beverage
Food & Beverage
Kenny Roger Roasters
Food & Beverage
Watsons
Services
Top 10 Tenants (By Monthly Rental Income)
Other Tenants
Total
254,009
273,198
35,468
96,283
83,705
7,322
14,124
17,431
7,625
7,379
796,544
981,823
14.3%
15.4%
2.0%
5.4%
4.7%
0.4%
0.8%
1.0%
0.4%
0.4%
44.8%
55.2%
1,778,367
100.0%
9.7%
5.9%
2.5%
1.7%
1.7%
1.6%
1.5%
1.5%
1.3%
1.2%
28.6%
71.4%
100.0%
1
Based on monthly rental income for December 2016, does not include contribution from Segamat Central
# Source: H-REIT Annual Report 2016 and its website at http://www.hektarreit.com/ [accessed: 8 November 2017]
FRASERS CENTREPOINT TRUST
63
INVESTMENT IN HEKTAR REIT
TENANCY MIX#
As at 31 December 2016
The portfolio tenancy mix is dominated by department stores and supermarkets, which are led by Parkson, The Store
and Giant constitute 36.5% of total portfolio NLA. In terms of rental income, the largest segment remains fashion and
footwear, which contributes 22.0% of monthly rental income. Food and beverage comes closely behind, constituting
21.6% of the portfolio monthly income.
Tenant
Fashion & Footwear
Food & Beverage / Food Court
Department Store / Supermarket
Gifts / Books / Toys / Specialty
Education / Services
Leisure & Entertainment, Sports & Fitness
Electronics & IT
Homewares & Furnishing
Others
Total
By Rental Income*
By Net Lettable Area
22.0%
21.6%
17.3%
7.3%
9.6%
8.6%
7.5%
1.1%
5.0%
100.0%
10.8%
13.2%
36.5%
4.8%
5.6%
17.5%
6.6%
1.9%
3.1%
100.0%
Based on monthly rental income for December 2016, does not include Segamat Central
*
# Source: H-REIT Annual Report 2016 and its website at http://www.hektarreit.com/ [accessed: 8 November 2017]
LEASE EXPIRY PROFILE#
As at 31 December 2016
For the year 2017, a total of 207 tenancies will expire, representing approximately 59% of NLA and 56% of monthly
rental income as at 31 December 2016. The expiries are slightly more concentrated in 2017 due to the expiry of
several anchor tenants. However, the tenancies are secured with options-to-renew and are confi rmed six months
prior to their expiries.
For Year Ending 31
December
No. of tenancies
expiring
NLA of Tenancies
Expiring (sq ft)
NLA of Tenancies
Expiring as % of
Total NLA
% of Total Monthly
Rental Income*
FY 2017
FY 2018
FY 2019
207
108
73
1,046,347
470,026
187,174
59%
26%
11%
56%
27%
16%
Based on monthly rental income for December 2016, does not include Segamat Central
*
# Source: H-REIT Annual Report 2016 and its website at http://www.hektarreit.com/ [accessed: 8 November 2017]
64 ANNUAL REPORT 2017
RISK MANAGEMENT
RISK UPDATE
Formal risk reviews take place half yearly
and the scorecard is updated regularly.
On a yearly basis, ERM validations are held
where the Management of FCAM provides
assurance to the Audit Committee, that
key risks have been identifi ed for which
the mitigating measures are adequate, and
the system of risk management in place
is adequate and eff ective to address risks
which are considered relevant and material
to the operations.
FCAM also seeks to benchmark its ERM
programme against industry best practices
and standards. In assessing areas for
improvement and how the ERM processes
and practices can be strengthened,
reference has been made to the best
practices in risk management including
those set out in the Code of Corporate
Governance 2012 and the Risk Governance
Guidance for Listed Boards issued by the
Corporate Governance Council in May 2012.
As every staff has a role to play in risk
management, ERM and business continuity
plans (“BCPs”) awareness briefi ngs are
conducted for new staff . Refresher sessions
are also held to update staff on relevant
developments in the area of ERM and BCPs,
where required.
Eff ective risk management is a fundamental
part of FCT’s business strategy. Key risks,
mitigating measures and management
actions are continually identifi ed, reviewed
and monitored by management as part of
FCAM’s enterprise-wide risk management
(“ERM”) framework. Recognising and
managing risks are central to the business
and to protecting unitholders’ interests.
RISK MANAGEMENT FRAMEWORK
ERM reporting is facilitated through a web-
based Corporate Risk Scorecard system
which enables the reporting of risks and
risk status using a common platform in a
consistent and cohesive manner.
Risks at the operational level using a Risk
Scorecard which captures risks, mitigating
measures, timeline for action items and risk
ratings. Where applicable, Key Risk Indicators
(“KRIs”) are established to monitor risks.
For risks that are material, the mitigating
measures and KRIs are reported in the Key
Risk Dashboard for review by Management
and Audit Committee on a regular basis.
Risk tolerance statements which set out
the nature and extent of signifi cant risks
which FCAM is willing to take in achieving
its strategic objectives are reviewed
annually. The tolerance limits are monitored
and reported to Management and Audit
Committee on a half yearly basis.
FCAM also has in place a Comfort Matrix
framework which provides an overview
of the mitigating strategies and assurance
processes of key fi nancial, operational,
compliance and information technology
risks.
FRASERS CENTREPOINT TRUST
65
RISK MANAGEMENT
KEY RISKS IN FINANCIAL YEAR 2017
Operational Risk
FCAM has established and strictly adheres
to a set of standard operating procedures
designed to identify, monitor, report and
manage the operational risks associated
with the day-to-day management
and maintenance of FCT malls. These
procedures and guidelines are regularly
reviewed and benchmarked against industry
best practices to ensure relevance and
eff ectiveness. Insurances are also in place
to mitigate losses resulting from unforeseen
events. BCPs are regularly tested for their
eff ectiveness.
Human Capital Risk
FCAM has in place a career planning and
development system and conducts regular
remuneration and benefi ts benchmarking to
attract and retain appropriate talent for the
business.
Liquidity Risk
In ensuring a prudent fi nancial structure for
FCT, FCAM adheres closely to the covenants
in the loan agreements and property
fund guidelines in the Code on Collective
Investment Schemes issued by the Monetary
Authority of Singapore. In addition, there
is close monitoring by FCAM of FCT’s cash
fl ow position and requirements. FCT has
suffi cient revolving banking facilities as
source of liquidity reserves to fi nance its
operations, asset enhancement initiatives
and any other short-term obligations. Please
refer to page 36 under Capital Resources
on the various sources of funds availability
and their utilisations. FCAM continues to
comply with its policy of spreading out
concentration of debts maturing in a single
year.
Investment Risk
As FCT grows its investment portfolio
via the acquisition of new properties and
other forms of permitted investments, all
investment opportunities are subject to a
disciplined and rigorous appraisal process.
All investment proposals are evaluated
based on a comprehensive set of investment
criteria including alignment with FCT’s
investment mandate, asset quality, expected
returns, sustainability of asset performance
and future growth potential, and having due
regard to market conditions and outlook.
Interest Rate Risk
Interest rate risk is proactively managed by
FCAM with the primary objective of limiting
the extent to which net interest expense
could be aff ected by adverse movements
in interest rates. A major portion of FCT’s
outstanding borrowings are at fi xed interest
rates in accordance with FCAM’s policy of
hedging.
Credit Risk
FCAM has established credit limits for
tenants and monitors their debt levels on
an ongoing basis. Credit evaluations are
performed before lease agreements are
entered into with tenants. Credit risk is also
mitigated by collecting rental deposits from
the tenants. Cash and fi xed deposits are
placed with regulated fi nancial institutions.
Compliance Risk
FCT is subject to relevant laws and
regulations including the Listing Manual of
the Singapore Exchange Securities Trading
Limited, the Code on Collective Investment
Schemes issued by the Monetary Authority
of Singapore and the tax rulings issued by
the Inland Revenue Authority of Singapore
with regard to the taxation of FCT and
its Unitholders. Any changes to these
regulations may aff ect FCT’s operations and
results.
FCAM has in place policies and procedures
to facilitate compliance with applicable laws
and regulations. Management keeps abreast
of latest developments in relevant laws and
regulations through training and attending
talks and briefi ngs.
66 ANNUAL REPORT 2017
SUSTAINABILITY
REPORT
68
OUR REPORT
70
THE YEAR
AT A GLANCE
71
MANAGING
SUSTAINABILITY
76
CHANGING THE WAY
WE LOOK AT NATURAL
RESOURCES
80
INVESTING IN A
WORKFORCE
OF THE FUTURE
84
CREATING STRONG
AND INTEGRATED
COMMUNITIES
74
UPHOLDING GOOD
CORPORATE
CITIZENSHIP
86
GIVING BACK
TO SOCIETY
FRASERS CENTREPOINT TRUST
67
OUR REPORT
OUR SUSTAINABILITY
COMMITMENT
ABOUT THIS REPORT
Our third Sustainability Report covers the Economic,
Social and Governance (ESG) aspects for all FCT’s
properties from 1 October 2016 to 30 September
2017.
At FCT, we continue to adopt the standards issued
by the Global Reporting Initiative’s (GRI’s) Global
Sustainability Standards Board. We have prepared this
report with reference to GRI Standards (2016), which
supersedes GRI G4 Guidelines, and includes GRI’s
Construction and Real Estate Sector supplements.
We intend to seek external assurance on our
sustainability report in the future.
REPORT SCOPE
REPORT SCOPE
i
”)
t S
t M
Pt Ltd (“P
Operating as a REIT, we refer to the activities
Operating as a REIT, we refer to the activities
and performance of Frasers Centrepoint Asset
and performance of Frasers Centrepoint Asset
Management (“the Manager” or “FCAM”) when
Management (“the Manager” or “FCAM”) when
discussing our employee-related performance for
discussing our employee-related performance for
FCT. Although the day-to-day operation of our assets
FCT. Although the day-to-day operation of our assets
are outsourced to Frasers Centrepoint Property
are outsourced to Frasers Centrepoint Property
Management Services Pte Ltd (“Property Manager”),
Management Services Pte Ltd (“Property Manager”),
M
we recognise that we still have a responsibility to
we recognise that we still have a responsibility to
work closely with them to encourage and monitor
work closely with them to encourage and monitor
good sustainability performance at our properties.
good sustainability performance at our properties.
Therefore, environmental performance data
Therefore, environmental performance data
disclosed in this sustainability report covers all
disclosed in this sustainability report covers all
properties owned by Frasers Centrepoint Trust (“FCT”)
properties owned by Frasers Centrepoint Trust (“FCT”)
for the fi nancial year ended 30 September 2017. Our
for the fi nancial year ended 30 September 2017. Our
data is reported in good faith and to the best of our
data is reported in good faith and to the best of our
knowledge. Together with the other information set
knowledge. Together with the other information set
out in our Annual Report, this Sustainability Report
out in our Annual Report, this Sustainability Report
plays a signifi cant role in promoting communication
plays a signifi cant role in promoting communication
and transparent reporting to our stakeholders.
and transparent reporting to our stakeholders.
We continuously seek to improve our sustainability
We continuously seek to improve our sustainability
eff orts and your feedback is vital in helping us
eff orts and your feedback is vital in helping us
achieve our objectives. Please contact Mr Chen
achih eve our objectives. Please contact Mr Chen
Fung Leng, Head of Investor Relations & Research, at
Fung Leng, Head of Investor Relations & Research, at
fungleng.chen@fraserscentrepoint.com.
fufufufufufufufufufuffuffufuffffffuuffffffffffff ngleng.chen@fraserscentrepoint.com.
68 ANNUAL REPORT 2017
At FCT, we believe that sustainability contributes to a
great customer experience. Our malls are patronized
by shoppers for their shopping and dining needs, as
well as serving as a destination for socializing with
friends and families. When assessing our assets, we
consider both the physical needs, such as eco-
effi ciency and safety, as well as the social needs such
as convenience and comfort. Shopping experience
can be enhanced by incorporating environmental
sustainability and social responsibility into our
business operations.
We need to work together with our stakeholders
to achieve our vision and collaboration is key. We
work closely with our Sponsor to support their
sustainability eff orts through participation in working
committees, such as the Sustainability Steering
“Experience Matters” is the unifying idea for Frasers Centrepoint Limited
(“the Sponsor”), and as part of the Group, we use this as our new guiding
vision. This vision centres on “Experience”, that is, the experience that
our customers receive as well as the experience that the Group has
developed over decades of operations.
Committee, and events, such as Frasers Environment
Month. We also work together to develop policies,
action plans and targets to progressively achieve good
sustainability practices and adoption of international
environmental standards. Finally, we empower our
employees to actively participate and drive our various
sustainability activities and initiatives. We engage our
stakeholders in a variety of ways and we continuously
seek to collaborate in more ways with them.
Our FY2017 Sustainability Report demonstrates how
we are working with our various stakeholders and
partners as well as the disclosure of our Environmental,
Social and Governance (ESG) performance in FY2017.
We are developing various targets and initiatives to be
implemented in the future.
We are pleased that we have improved our energy and
water intensities in FY2017 and achieved Green Mark
certifi cation at YewTee Point. We also took part in our
Sponsor’s inaugural Environment Month. We continue
to implement OHSAS 18001 and SS506 Part 1:2009
occupational health and safety management systems
and obtained the Biz-Safe Enterprise Level Star Award at
all our properties. We also maintained good governance
performance with no known incidents of non-
compliance with relevant codes, laws and regulations.
We continue to explore opportunities to improve our
sustainability eff orts through benchmarking with our
peers in the REIT and real estate industry.
FRASERS CENTREPOINT TRUST
69
THE YEAR AT A GLANCE
GOVERNANCE
HEALTH AND SAFETY
• Zero known incidents of non-compliance with
• Zero incidents of safety-related non-
relevant codes, laws and regulations
ENVIRONMENT
• 7.2% decrease year-on-year in average
building energy intensity
• 2.0% decrease year-on-year in average
building water intensity
• 8.6% decrease year-on-year in GHG emission
intensity
• All FCT properties achieved Water Effi cient
Building Certifi cation awarded by PUB
• YewTee Point achieved Green Mark
Certifi cation awarded by the Building and
Construction Authority of Singapore (BCA)
compliance and zero loss time injuries for
FCAM employees
• Implemented the OHSAS 18001 and SS506
Part 1:2009 occupational health and safety
management systems at all our properties
• Achieved Biz-Safe Enterprise Level Star Award,
awarded by the Workplace Safety and Health
Council at all our properties
• Causeway Point achieved SCDF Outstanding
Company Emergency Response Team (CERT)
Award 2016
EMPLOYEES
• Employees of the Manager achieved an
average 66.6 training hours per employee,
exceeding of the target of 40 hours
7.2%
decrease year-on-year
in average building
energy intensity
2.0%
decrease year-on-year
in average building
water intensity
8.6%
decrease year-on-year
in GHG emission
intensity
66.6hr
average
training hours per
employee
70 ANNUAL REPORT 2017
MANAGING SUSTAINABILITY
MANAGEMENT STRUCTURE
The tone from the top is critical for driving good
sustainability practices throughout FCT and the Manager.
As a sponsored REIT, our sustainability programme
is closely aligned with the business strategy and
commercial direction of our Sponsor.
CEO, Dr. Chew Tuan Chiong, represents FCT in the SSC.
To ensure that our sustainability eff orts are on the right
track, the SSC meets quarterly to review and assess the
performance of our sustainability initiatives.
The Sustainability Steering Committee (SSC) provides
guidance and drives Frasers Centrepoint Group’s
corporate sustainability agenda in its business
operations. The committee is chaired by the Group
CEO, Mr. Panote Sirivadhanabhakdi, and comprises the
top management – the CEOs of all our business units,
the Chief Corporate Offi cer and Chief Financial Offi cer,
as well as the Chief Human Resources Offi cer. FCAM’s
FCT is also represented in the Sustainability Working
Committee (SWC), which supports the SSC. The SWC
consists of members from the senior and middle
management of various business units and departments
such as Finance, Risk Management, Human Resource
and Communications. The SWC’s main task is to
monitor our sustainability performance against our key
performance indicators (KPIs), implement action plans,
and report fi ndings to the SSC.
STAKEHOLDER ENGAGEMENT
Our stakeholders are important to FCT’s long-term success. We interact with many key stakeholders on a regular
basis and these interactions facilitate continuous improvements in all areas of our operations. We seek to engage
stakeholders’ concerns through multiple forms of engagement, as outlined in the table below:
Key Stakeholders
Engagement Methods
Key Topics
Shoppers
Tenants
Regulators
Industry
associations
• Shopper surveys
• Focus group study (every 2 years)
• Feedback via online and mobile platforms
such as social media and FCT/FCL
websites
• Regular shopper events to engage
• Meeting the shopping needs of our
shoppers
• Quality of services and facilities
• Providing comfortable shopping
environment and family-friendly
amenities
shoppers and their families
• Considerations for safety and easy
• Frasers Rewards (loyalty program for
accessibility
shoppers at Frasers malls)
• Good connectivity to public transport
• Feedback forms
• Partnership in promotional events
• Regular tenant feedback meetings
• Maintaining high shopper traffi c
• Competitive rental rates
• Collaboration in marketing and
promotional events
• Participation in industry associations
• Compliance with relevant rules and
including REIT Association of Singapore
(REITAS), Investor Relations Professionals
Association (IRPAS), Orchard Road
Business Association (ORBA), Securities
Investors Association (Singapore) (SIAS)
and Singapore Retailers Association (SRA)
• Participation in briefi ngs and consultation
with regulators such as the Singapore
Exchange (SGX) and Monetary Authority of
Singapore (MAS)
regulations
• Engagement with investors and
unitholders
• Government policies on REITs and/or
•
Real Estate sector
Issues concerning both short and long-
term interests of the retail industry in
Singapore
FRASERS CENTREPOINT TRUST
71
MANAGING SUSTAINABILITY
Key Stakeholders
Engagement Methods
Key Topics
Property Manager
• Monthly meetings
• Email exchanges
Investors and
FCT Unitholders
•
Investor meetings, quarterly post-results
luncheons and non-deal roadshows
• Mall tours upon requests
• Annual General Meetings
• Website, annual reports, SGXNET
announcements, presentations slides,
quarterly fi nancial results briefi ngs and
conference calls
• Key Performance indicators for the
Property Manager
• Business and operations performance
• Business strategy and outlook
• Sustainability concerns
Employees
• Annual Performance appraisals
• Communal sports and activities
• Orientation and training programmes
• Compensation and Benefi ts
• Career progression
• Continuous education and skills
organised by FCL Group Human Resource
upgrading
• Regular department meetings
• Family Day
• Annual Dinner and Dance event
• Employee well-being
Community
• Annual Charity Drives and Events
• Donations and sponsorships to charitable
• Helping the needy group in the
community
organisations
• Foster strong community ties and
promote family-values
MATERIALITY
In FY2015, we conducted a materiality assessment in
collaboration with our Sponsor to determine the ESG
factors material to our operations, as well as those that
infl uence decisions of our stakeholders. This assessment
was based on the international standards for materiality,
the GRI and AA1000 principles, as well as the application
of sector-specifi c guidance from the Global Real
Estate Sustainability Benchmark (GRESB) and the GRI
Construction & Real Estate Sector supplements.
Based on the materiality review process conducted
by FCT’s key management, we concluded that the
material factors are still refl ective of our current business
condition; thus, our material factors are unchanged.
We will continue to assess these material factors on
a regular basis to ensure that they are relevant and
refl ective of our business impacts and stakeholders
needs.
After discussing how we address some of the United
Nations’ Sustainable Development Goals (SDGs) in
last year’s report, we have linked these SDGs to our
material factors in order to demonstrate our ongoing
commitment. Adopted by the United Nations and its
member states, the 17 SDGs focus on the economic,
environmental and social dimensions of sustainable
development. The SDGs call for global action among
governments, civil society and the private sector to end
poverty, protect the planet and ensure prosperity for
all1. At FCT, we aim to contribute to the achievement of
the SDGs by minimising the environmental footprint of
our business operations and incorporating sustainability
principles into our corporate policies and procedures.
1
According to United Nations Development Programme.
72 ANNUAL REPORT 2017
Theme
Economic
1. Economic performance1
Material factors
Relevant Sustainable Development Goals (SDGs)
Goal 8: Decent work and economic growth
Goal 9: Industry, Innovation and Infrastructure
Goal 17: Partnership for the goals
Upholding Good
Corporate Citizenship
2. Environmental compliance
3. Anti-corruption
4. Ethical marketing
Changing The Way
We Look at Natural
Resources
Investing in a Workforce
of the Future
5. Energy management
6. Water management
Goal 7: Aff ordable and clean energy
Goal 9: Industry, Innovation and Infrastructure
Goal 11: Sustainable cities and communities
7. Staff retention and development
8. Labour/management relations
9a. Health and safety
Goal 3: Good health and wellbeing
Goal 8: Decent work and economic growth
Goal 10: Reduced inequalities
Creating Strong and
Integrated Communities
9b. Health and safety
10a. Local communities
Goal 3: Good health and wellbeing
Goal 11: Sustainable cities and communities
Giving Back to Society
10b. Local communities
Goal 17: Partnership for the goals
1 Not covered in this section. Please refer to pages 118-176 for our fi nancial statements.
INFLUENCING OUR
SUPPLY CHAIN
PARTNERSHIPS AND
AFFILIATIONS
FCT and the Manager are committed to infl uencing our
value chain in sustainability matters.
Where relevant and practicable, we engage our Property
Manager and service providers, and collaborate with
them to take actions with positive sustainability impact.
Examples of such actions include the switch or upgrade
to environmentally friendly equipment during AEI and
facilities maintenance.
We also require our Property Manager to ensure that
the service providers who carry out maintenance and
fi tting-out works in our properties are compliant with
the relevant statutory requirements and the Workplace
Safety and Health Approved Codes of Practice issued by
the Singaporean WSH Council.
The Manager has memberships in several industry
organisations including the Securities Investors
Association (Singapore) (SIAS), REIT Association of
Singapore (REITAS) and Investor Relations Professionals
Association (IRPAS). We work with these organisations in
various aspects to contribute to the real estate and REIT
industry, as well as to the general investor community
and to the public. The objective of the subscription to
these organisations are aligned to our desire to grow
and promote the S-REIT industry; to promote good
corporate governance; and to engage regulators during
the formulation of policies relevant to the industry,
among other objectives. The Manager, as part of
Fraser Centrepoint Group, also participates in activities
organised by Orchard Road Business Association (ORBA)
and Singapore Retailers Association (SRA). The Manager
supports FCL, in its commitment to enhance corporate
social responsibility initiatives.
FRASERS CENTREPOINT TRUST
73
UPHOLDING GOOD
CORPORATE CITIZENSHIP
Relevant SDGs
BEYOND COMPLIANCE
Being respectful of laws, regulations and the needs of society are essential to be a good
corporate citizen. Good corporate governance drives good business practices. We recognise
the benefi ts that clear policies and good management bring to our business, and we strive to
maintain high standards of integrity, accountability and corporate governance.
NO BREACH OF
ENVIRONMENTAL LAWS
AND REGULATIONS.
We aim for zero incidents
of non-compliance
with environmental laws and
regulations in
upcoming year.
NO CONFIRMED CASES
WITH REGARDS TO
BRIBERY AND CORRUPTION
REPORTED.
We have a zero tolerance
approach towards bribery,
corruption and fraud.
NO INCIDENTS OF
NON-COMPLIANCE
WITH REGULATIONS AND
INDUSTRY CODES
concerning marketing
communications for which
fi nes were issued to the
Company this year.
ENVIRONMENTAL COMPLIANCE
FCT supports Building and Construction Authority’s (BCA’s) second Green Building Master
Plan that at least 80% of the buildings in Singapore achieve the BCA Green Mark Certifi ed
rating by 2030, and mandates that all new developments and retrofi ts achieve the basic
Green Mark Certifi cation level.
ETHICAL MARKETING
In all our engagements with our tenants, suppliers and customers, we ensure that our
communications and marketing are responsible, clear, timely and accurate. Information
for investors is disclosed in our Annual Report, our quarterly fi nancial statements and our
investor presentations. All these documents are publicly available on our website and on
the SGX-ST website. In addition, we hold post-results briefi ngs or conference calls meetings
every quarter and participate in regular non-deal roadshows and investors meetings.
74 ANNUAL REPORT 2017
ANTI-CORRUPTION AND FRAUD PREVENTION
We believe that sustainability should be integral to the corporate governance structure of
our business. As such, we strive to maintain high standards of integrity, accountability and
corporate governance.
We adhere to the Code of Corporate Governance 2012, Code of Advertising Practice,
listing rules and regulations set out by SGX and the MAS Securities and Futures Act, as
well as all other applicable laws and regulations. This year, we have also engaged Ernst &
Young Advisory Pte. Ltd. to create a framework for the prevention of money laundering and
countering the fi nancing of terrorism when we deal with our counterparties and tenants.
FCAM has a zero-tolerance approach towards corruption and fraud. We adhere to the
following corporate policies and SOPs established by FCL to guide conduct of our employees:
Corporate Policies
Guidance on:
Code of Business Conduct
Whistle-Blowing Policy
Internal policies that cover ethics and conduct in relation to topics such
as compliance monitoring, record keeping, information confi dentiality,
confl icts of interest, insider trading and equal employment opportunities
Provide a channel for stakeholders to report concerns on improprieties
in fi nancial reporting, professional misconduct, irregularities or non-
compliance with laws and regulations
Anti-Bribery Policy
Prevention and management of bribery and corruption
Competition Act Compliance Manual Compliance with the Competition Act to protect and promote healthy
competitive markets in Singapore
Personal Data Protection Act Policy
Compliance with the Personal Data Protection Act (PDPA) 2012
Environment, Health and Safety Policy Safeguarding the health and safety of all relevant stakeholders and
Legal and Regulatory Compliance
Manual
interested parties within its premises and providing an environmentally
friendly and safe place for them to work in or to conduct their business
Provides guidance on compliance with relevant rules and regulations
Policy on Dealing in Units of FCT and
Reporting Procedures
Provides guidance regarding dealings in FCT units by directors, offi cers
and employees
Policy for Prevention of Money
Laundering and Countering the
Financing of Terrorism
Policy on Outsourcing
Provides guidance so that employees of the Manager are aware of their
obligations and responsibilities and meet the obligations under the
relevant Prevention of Money Laundering and Countering the Financing
of Terrorism regulations
Provides guidance regarding the adoption of sound risk management
practices on outsourcing of services
Treasury Policy
Provide guidance on the management of treasury activities
Our management’s approach is risk-based, and supported by our internal audit framework.
We have in place an internal audit function established within the FCL Group to
independently examine and evaluate the activities of FCAM, focusing on the adequacy and
eff ectiveness of internal controls, risk management and corporate governance processes. For
further details on our internal audit, please refer to pages 106 to 107 of this Annual Report.
FRASERS CENTREPOINT TRUST
75
CHANGING THE WAY WE LOOK AT
NATURAL RESOURCES
FCT aligns its goals in environmental sustainability with that of the
Sponsor. Recognising the importance of being environmentally
conscious, we will work towards cultivating a culture that
encourages thoughtful and ethical behaviour that promotes care
and awareness of our environment footprint to our employees and
stakeholders.
ENERGY MANAGEMENT
Our overall building energy consumption and intensity decreased
by 7.2% year-on-year for FY2017. While the asset enhancement
initiative (AEI) at Northpoint City North Wing contributed to the
decrease, we generally saw a fall in energy consumption in our malls.
We have increased our eff orts to achieve higher energy effi ciency
at our malls, by implementing changes such as installing energy-
effi cient LED lighting in common areas, upgrading to more energy-
effi cient chillers and air-conditioning units. YewTee Point’s building
management system was also optimized and that helped the mall to
achieve the BCA Green Mark Certifi cation this year.
In line with the drop in energy intensity, we are also pleased to see a
8.6% decrease in our GHG emissions and intensity.
We have set a 10-year target for a 15% reduction in energy intensity
by FY2025, from the baseline of FY2015. This is in line with FCL’s
target.
Building energy consumption
(million kWh)
Building energy intensity
(kWh/m2)
Relevant SDGs
WE HAVE SET A 10-YEAR
TARGET FOR A
15%
REDUCTION OF OUR
ENERGY INTENSITY
BY FY2025, FROM THE
BASELINE OF FY2015
CERTIFICATES AND
AWARDS
FCT’s BCA Green Mark certifi ed
properties have energy effi ciency
measures built into their designs and
are subject to energy audits every
three years. The properties in FCT’s
portfolio which are BCA Green Mark
certifi ed as at 30 September 2017 are:
207.7
200.0
• Causeway Point: BCA Green Mark
(Platinum)
185.6
• Changi City Point: BCA Green
32.9
31.7
29.4
40
35
30
25
20
15
10
5
0
300
250
200
150
100
50
0
Mark (GoldPLUS)
• Bedok Point: BCA Green Mark
(Gold)
• Northpoint City North Wing: BCA
Green Mark (Gold)
• YewTee Point: BCA Green Mark
(Certifi ed)
FY2015
FY2016
FY2017
FY2015
FY2016
FY2017
Building GHG emissions
(thousand tonnes of CO2e)
GHG emission intensity
(kilograms of CO2e/m2)
14.2
13.7
12.5
16.0
15.0
14.0
13.0
12.0
11.0
10.0
100
95
90
85
80
75
70
65
60
89.8
86.2
78.8
FY2015
FY2016
FY2017
FY2015
FY2016
FY2017
1
The building GHG emissions (in thousand of CO2e) for FY2016 has been restated to
13.7 from 13.6 due to rounding in calculations.
76 ANNUAL REPORT 2017
WE HAVE SET A 10-YEAR
TARGET FOR A
15%
REDUCTION OF OUR
WATER INTENSITY BY
FY2025, FROM THE
BASELINE OF FY2015
WATER EFFICIENT
BUILDINGS
All our malls have achieved the
Public Utilities Board’s (PUB) Water
Effi cient Building (WEB) Certifi cation.
By adhering to the WEB Certifi cation,
these malls are fi tted with many water
saving features such as:
•
tap fl ow restrictors/regulators
low-fl ush water system
•
• waterless urinal system
• PUB’s Water Effi ciency Labelling
Scheme (WELS) approved fi ttings
• use of NEWater and Air Handling
Unit (AHU) condensate for non-
portable purposes
WATER MANAGEMENT
Water is a scarce resource in Singapore and we are a net importer of
it. It is important that we continue to improve our eff orts to better
manage our water consumption within our malls. FCT encourages
our Property Manager to take ownership of water management in
our properties.
For FY2017, our building water consumption and intensity decreased
by 2%. While the asset enhancement initiative (AEI) at Northpoint City
North Wing was a factor to the decrease, we have seen some results
from more conscious use of water from the continued eff orts to
raise awareness in water conservation.
We have set a 10-year target for a 15% reduction in water intensity by
FY2025, from the baseline of FY2015. This is in line with FCL’s target.
Building water volume
(m3)
481,512
488,628
478,715
600,000
500,000
400,000
300,000
200,000
100,000
0
FY2015
FY2016
FY2017
Building water intensity
(m3/m2)
5
4
3
2
1
0
3.0
3.1
3.0
FY2015
FY2016
FY2017
FRASERS CENTREPOINT TRUST
77
CHANGING THE WAY WE LOOK AT
NATURAL RESOURCES
WASTE MANAGEMENT
Waste generation and disposal remain as some of the top environmental issues in Singapore.
We continue to implement various waste management initiatives.
Total weight of non-hazardous waste collected
(tonnes)
Total weight of waste sent for recycling
(kilograms)
7,291
7,397
7,188
7,600
7,400
7,200
7,000
6,800
6,600
6,400
421,993
356,026
367,850
500,000
400,000
300,000
200,000
100,000
0
FY2015
FY2016
FY2017
FY2015
FY2016
FY2017
REDUCE, REUSE, RECYCLE
We track the waste disposal and recycling activities
at our malls and implement initiatives to reduce our
ecological footprint brought about by waste generation.
We constantly look for ways to encourage Reduce,
Reuse and Recycle (3Rs) in our operations, where a large
part of the waste is generated by shoppers and tenants.
PARTNERING WITH NATIONAL
ENVIRONMENTAL AGENCY (NEA)
We have partnered with National Environment
Agency (NEA) to deliver lunchtime talks to staff and
tenants on waste minimization to drive the message
on the 3Rs practices.
Recycling bins are installed at our malls to make it
convenient to shoppers and tenants to recycle. Retail
tenants are also encouraged to segregate their waste
(paper, plastic and general waste) before disposal to
improve their recycling eff orts. We are ramping up
recycling eff orts to include other materials such as
plastics and metals.
The F&B businesses in our shopping malls generate
considerable amount of food waste. Hence, we are
evaluating initiatives to promote the reduction and
recycling in this area.
We source paper which has Forest Stewardship Council
(FSC) or the Programme for the Endorsement of Forest
Certifi cation (PEFC) labels, or products under the
Singapore Green Label Scheme (SGLS). We encourage
our employees to reduce the amount of paper use by
setting default setting of printing to double-sided and
discouraging printing where materials are available
online.
78 ANNUAL REPORT 2017
RECYCLING E-WASTE
To encourage our tenants to recycle e-waste, we
partnered with StarHub to provide e-waste bins at our
malls. This is a part of the REcycling Nation’s Electronic
Waste (RENEW) project that Starhub, DHL and TES-
AMM pioneered to provide consumers with avenues
to responsibly dispose of their e-waste. The e-waste
from the bins will be collected by DHL and TES-AMM
will extract re-usable materials and dispose the remains
using environmentally safe means.
The total amount of e-waste collected from our malls
was 689kg for FY2017. We are looking forward to
continue to raise awareness for the recycling of e-waste
and making contributions to such recycling eff orts.
Causeway Point commended
with the Good Eff ort Certifi cate
at the 3R Awards for Shopping
Malls, the fi rst waste reduction and
recycling award for mall operators
in Singapore.
(Right) Elsie Goh, Senior Centre Manager, Causeway Point, receiving the
certifi cate from (left) Dr Amy Khor, Senior Minister of State, Ministry of the
Environment and Water Resources & Ministry of Health.
CREATING AWARENESS
At FCT, we hold ourselves to a high standard by continuously looking for opportunities to
reduce our reliance on the natural resources to promote good sustainability practices.
We recognise that our investors and stakeholders are increasingly emphasising responsible
ESG practices. In order to ensure fi rm-wide support towards environmental sustainability,
senior management sets the appropriate tone-at-the-top to drive and garner active
involvement from our employees. Raising awareness on the importance of environmental
sustainability continues to be a group-wide eff ort. In the future, we plan to extend our reach
to our supply chain.
FRASERS ENVIRONMENT MONTH
During the inaugural Environment Month in March 2017, employees participated in a series
of workshops, engagement sessions, educational tours, and even a coastal clean-up. These
programmes hope to increase the awareness about upcycling and recycling, water sustainability as
well as the conservation of resources.
As per previous years, we continue to support the global climate change movement, Earth Hour by
collaborating with our tenants to switch off from 8.30pm on 25 March. The event aimed to raise
awareness that the way to create a greener building is through collaboration with our partners.
FRASERS CENTREPOINT TRUST
79
INVESTING IN A WORKFORCE
OF THE FUTURE
Relevant SDGs
At FCT, we believe in investing in the career development and well-being of our staff , to
provide safe and healthy work environment, and to maintain transparent communication
channels with our staff .
KNOWING OUR PEOPLE
Our employees play a critical role in ensuring
that our business continues to grow and thrive.
Our employees play a critical role in ensuring that our
business continues to grow and thrive. Retaining and
investing in the development of our human capital is
key and it ensures that we stay relevant. We believe
that having a dedicated workforce is key in driving and
sustaining our growth and success.
Having a diverse talent pool encourages growth,
innovation and inclusivity, all of which contribute
positively to FCT’s business performance. As a part
of our commitment to adopt fair employment
practices, FCT is guided by Frasers Centrepoint Group’s
commitment to the Tripartite Alliance for Fair &
Progressive Employment Practices (TAFEP) in Singapore
and the Singapore National Employer Federation. FCT
is also guided by Frasers Centrepoint Group’s Code of
Business Conduct to reiterate our commitment to equal
and fair employment opportunities.
23%
15%
Employee
Profi le by
Age Group
Employee
Profi le by
Job Type
77%
85%
31%
Employee
Profi le by
Gender
69%
100%
Employee
Profi le by
Nationality
2 Non-executives
4 Male Employees
11 Executives
9 Female Employees
13 Employees who
are Singaporean
3 employees
aged 50 and above
10 employees
aged 30-49 years old
80 ANNUAL REPORT 2017
NURTURING TALENT
As of 30 September 2017, FCAM has a total of 13 employees, not
including contract staff . There were 1 new hire and 2 resignations
during the year. We believe strongly in investing in the career
development of all our employees and review their performance with
them on an annual basis.
Training and development initiatives for FCAM employees are
supported by FCL’s HR department. Supervisors are responsible for
ensuring that the training and development of their subordinates
comply with the requirements of the Continuing Education of Capital
Markets Services Representatives. FCL’s HR department publishes
periodic comprehensive learning directory for all FCL staff and they
may also request to attend training courses not covered by this
learning directory.
The average training hours achieved per FCAM employee is 66.6 hours,
which exceeds the target of 40 hours set for FY2017.
THE AVERAGE TRAINING
HOURS ACHIEVED PER
FCAM EMPLOYEE IS
66.6hrs
THIS EXCEEDS THE
TARGET OF 40 HOURS
SET FOR FY2017.
Average Training Hours
per Employee
(hours)
Average Training Hours
per Employee by Gender
(hours)
Average Training Hours
per Employee by
Job Type
(hours)
Average Training Hours
per Employee by
Job Type
(hours)
66.6
68.1
66.5
66.7
69.7
69.7
48.5
48.5
2017
2016
Male
Female
Executive Non-Executive
Executive Non-Executive
FRASERS CENTREPOINT TRUST
81
INVESTING IN A WORKFORCE
OF THE FUTURE
HEALTH AND WELL-BEING
At FCT, we strive towards achieving work-life
balance for our employees. The Corporate Wellness
Committee plans several team building, personal
development and health-related activities.
Our employees participate in the year-round staff wellness
programme organised by FCL’s Corporate Wellness Committee.
The programme is planned around team building, personal
development and health according to the motto “Make Wellness
Part of Your Life: Regular Exercise. Eating Right. Staying Positive”.
Our employees also participate in social events such as the
Annual Dinner and Dance, Family Day, health screenings, fi tness
activities such as walks, jogs and yoga.
Spending time with our loved ones is an
important part of maintaining our well-
being. Our Sponsor organized a family
day outing to Universal Studios Singapore
to promote greater family bonds. The
employees and their families were treated
to a day of thrills and delights at the park.
Besides spending time with their families,
employees were able to connect with their
colleagues away from the offi ce.
SAFETY FIRST
STAFF TRAINING
Our fundamental focus is to ensure that our employees work in a
safe work environment. We have implemented workplace safety
management systems across key business operations to identify
and control hazards, monitor performance and identify areas for
improvement. For FY2017, there were zero incidents of safety-
related non-compliance and zero loss time injuries from FCAM
employees.
Our Group provides an extensive list of
courses, catering health and safety training
to our staff and our Property Managers.
These includes courses such as “Moving
EHS from Awareness to Action: Sending the
EHS Message Right” and the “Terrorism 101
Workshop”.
FCAM adheres to the Workplace Health and Safety Policy of
the Frasers Centrepoint Group, the relevant safety rules and
regulations to provide a safe environment at our properties
for our employees, tenants, shoppers and stakeholders.
We implemented the OHSA18001 and SS506 Part1:2009
occupational health and safety management systems at all our
properties.
82 ANNUAL REPORT 2017
HEALTH AND SAFETY
MONTH (WELL-BEING
INITIATIVES)
As part of our Health & Safety Month, our
employees took part in various wellness
activities. During the Frasers Global Running
Challenge, our employees from diff erent
countries pit their running mileage against
each other and top runners win attractive
prizes. We also took part in the National
Steps Challenge where employees are
encouraged to clock 10,000 steps a day
as part of the challenge. With all these
activities, we hope to nurture active lifestyles
among our employees.
HEALTH AND SAFETY MONTH (SAFETY INITIATIVES)
We also participated in Frasers Centrepoint Group’s Health & Safety Month. The theme
this year was “Health & safety: it’s core to our culture”. Various health and safety talks as
well as workshops were conducted for the employees. Safety audits were also scheduled
at all our properties.
A Frasers Health & Safety Workshop was conducted during this month where employees from Frasers
Centrepoint participated in and conducted several programmes on common hazards at the workplace,
risk management and safety consciousness in achieving OSH objectives.
FRASERS CENTREPOINT TRUST
83
CREATING STRONG AND
INTEGRATED COMMUNITIES
FOSTERING A SENSE OF BELONGING
Relevant SDGs
Our malls provide shoppers with not only shopping convenience, but also
destination spaces to gather with family and friends, practise hobbies and
take part in new experiences. We encourage our Property Managers to focus
on the experiences that mall visitors receive and not just their basic needs to
contribute to thriving, happy communities.
UNIVERSAL DESIGN
We believe that everyone should be able to enjoy the
shopping and dining experience our malls provide.
Therefore, we work to increase accessibility of our
properties so that they can be used by all people
regardless of their age, size, ability or disability. Through
Universal Design we ensure that our developments
cater to the varying needs of the community that we
serve. The concepts that we focus on would be user
friendliness, connectivity and accessibility, operations
and maintenance, safety and design integration of our
properties.
CAUSEWAY POINT
User friendliness
Causeway Point is easily accessible
by the public and wayfi nding within
the mall is facilitated by visual
reference points (e.g. atria, external
views, focal nodes) to aid users in
orientation. Signage with braille
is also provided at the beginning
of corridors leading to the toilets.
Causeway Point also have dedicated
children play area with padded fl oor
surface, nursing rooms and child-
friendly sanitary facilities. These
make it a family friendly destination
mall.
Connectivity and accessibility
Commuters can access Causeway
Point from Woodlands Civic
Centre, Woodlands MRT station,
the bus interchange, taxi stand,
traffi c junction, sidewalk and future
underpasses. Designated accessible
alighting and boarding bays also
help to serve the needs of our
shoppers.
Operations and maintenance
Causeway Point is cladded with
durable aluminium composite
panels on 80% of its façade
which can be easily cleaned and
maintained without the need for
repainting. Painted walls are kept to
a minimum and they are painted in
dark colours to minimise staining.
Safety
Causeway Point has installed anti-
slip walking surfaces to minimize
slippage. Proper colour contrast and
appropriate illumination levels are
also used.
Design integration
Our through-block link is accessible
24 hours to allow residents to
commute between the residential
estate and the MRT station and bus
interchange, along with the other
parts of the mall such as the taxi
stand and carpark.
CAUSEWAY POINT
WAS AWARDED THE
BCA UNIVERSAL
DESIGN MARK
GOLDPLUS AWARD
IN 2015.
84 ANNUAL REPORT 2017
NORTHPOINT CITY, SINGAPORE
Our mall, Northpoint City North Wing is part of the
Northpoint City project that aims to revitalise and
rejuvenate the Yishun Centre precinct. Centre to Yishun’s
Remaking our Heartland Programme, Northpoint City
is expected to serve as a shopping, dining, lifestyle,
recreation and integrated transport hub for its shoppers
and visitors.
We have taken the opportunity in this revitalisation
project to create open spaces for community activities
and interaction. These also allow for community-
centric tenants to use the additional space to provide
community services. Northpoint City will have seamless
connectivity to Yishun MRT and the bus interchange as
well as dedicated sheltered walkway to nearby bus stops.
There will also be bicycle parking lots to help Northpoint
City better serve the community.
THE PAINT PARTY AT NORTHPOINT CITY
NORTH WING
Northpoint City North Wing organized The Paint Party, a
community engagement project where residents were
invited to grab a brush and contribute to an art work
that will form The Community Wall – a collaboration
between local artist and urban sketcher, Francis Theo,
and Northpoint City. It will be unveiled to the public
during the soft opening of Northpoint City at the end of
the year.
BUILDING STAKEHOLDER
CONFIDENCE
No breaches of health and safety regulations in
regards to our building users
No major safety incidents across our portfolio
Plan to focus on increasing our terrorism incident
planning for FY2018
FCT wants its mall to be a place where its shoppers and
its tenants feel comfortable and safe. Our properties
are well-maintained with equipment and established
practices, such as essential locking mechanisms, safety
lighting and fi re and emergency procedures to protect
our shoppers and tenants. We also conduct regular
risk assessments and walk-throughs of our buildings to
uphold a high quality of health & safety at all times.
STAYING VIGILANT
One of our initiatives this year has been vigilance
around the potential threat of terrorism. We take
the safety of our shoppers and tenants seriously
and are aware of the potential threat of terrorism
in large community spaces such as our shopping
malls. We have worked with various government
agencies to ensure that our employees are well
prepared. Going forward, we will continue to
address these threats through risk assessment,
risk audit, review of safety enhancement methods
and security trainings and workshops.
FRASERS CENTREPOINT TRUST
85
GIVING BACK TO SOCIETY
Relevant SDGs
At FCT, we align our principles with Frasers Centrepoint Group and
shape our community investments around the theme of ‘Wellness’. We
aim to enhance the wellness of the minds, hearts, spirits and bodies of
our communities as well as contribute to the wellness of our chosen
charitable causes. At FCT, we give back to the local communities who
have supported our growth through initiatives and investments by
involving our people to provide fi nancial assistance, share our spaces and
support the arts and heritage.
Demonstration of Snakes and Ladders to our shoppers
during the National Day Fiesta
CELEBRATING WITH OUR NATION
In conjunction with the National Day, YewTee Point held the National Day Fiesta where
the community were invited to take part in fun-fi lled family activities, have nostalgic local
snacks and play old-school games.
86 ANNUAL REPORT 2017
Stephanie Ho, General Manager, Retail Properties, presenting
a symbolic rice bucket to Shan You Wellness Centre
FOOD DONATIONS TO
UNDERPRIVILEGED
RESIDENTS AMONGST US
YewTee Festive Care & Share is a food donation
drive was organised at YewTee Point earlier
this year to assist low-income individuals and
families residing in the Yew Tee and Choa Chu
Kang neighbourhood. This initiative was held
in conjunction with Yew Tee Community Club
Women’s Executive Committee.
YewTee Point also kicked off the Lunar New Year
this year with the “Prosperity Charity Rice Bucket
Challenge”. For every rice bucket redeemed,
YewTee Point donated 2 kg of rice to Shan You
Counselling Centre, a non-profi t Voluntary
Welfare Organisation that serves daily meals to
elderlies who are vulnerable and at risk of not
having daily meals in Singapore. This initiative saw
about 800 kg or rice donated to the Centre.
Care & Share event at YewTee Point in January 2017
YewTee Point
FRASERS CENTREPOINT TRUST
87
GIVING BACK TO SOCIETY
PLAY IT FORWARD - AN INITIATIVE
Involving over 10,000 participants in our “Play It Forward” initiative, Frasers Centrepoint Singapore organised a roving
giant ball pool charity initiative that also came to Northpoint City North Wing, YewTee Point and Causeway Point to raise
funds for Family Services Centres (FSCs). FSCs provide social support for families in Singapore facing diffi culties.
For a minimum donation of $5, shoppers of our malls were off ered a chance to dive-in, unwind and play in a colourful
sea of 100,000 balls while Frasers Centrepoint Malls matched the donations dollar-for-dollar, achieving a total of over
S$100,000 of funds raised as at 18 February 2017.
We are also proud that this one year-long charity drive that started in FY2016 and concluded at Causeway Point this
fi nancial year, won the “Special Events Silver Award” at the annual Community Chest Awards.
Children having fun in the charity ball pool at Northpoint City North Wing
Northpoint City North Wing
Play It Forward at Causeway Point
88 ANNUAL REPORT 2017
SUPPORTING OUR COMMUNITY
THROUGH ART
Changi City Point hosted the Very Special Arts Singapore Ltd (VSA
Singapore) for its sixth annual fund raising event to showcase
artworks by artists with disabilities. The exhibition, “Welcome to
Paradise”, featured about 100 artworks by more than 35 artists
over 7 days, the event is known as the largest platform for people
with disabilities to achieve fi nancial independence through art-
making. The public showed support by purchasing artworks.
Changi City Point
Artworks on display at the “Welcome to Paradise”
exhibition in Changi City Point
ENGAGING PARTNERS FOR
A MORE UNDERSTANDING
SOCIETY
Giving back to the local community that we serve
has always been how we operate. Partnering the
Mobility Aids Training & Services (MASTC) under
Kampung Senang Charity, Frasers Centrepoint
Malls launched the Spin It To Win It campaign
with the objective of raising awareness of the
needs of the physically disabled as well as
supporting both MASTC and the Society for the
Physically Disabled (SPD) as benefi ciaries. Our
malls were partners in this event.
At the same time, Causeway Point and YewTee
Point also held the “Wheels of Hope Roadshow”
on 11 June and 18 June respectively where
trainers shared with shoppers how they can
volunteer with MASTC, recycle used or unwanted
mobility aids and pick up professional training on
how to fi x faulty wheelchairs. Shoppers were also
allowed to bring home toolkits worth $50 each.
FRASERS CENTREPOINT TRUST
89
Causeway Point
GRI INDEX
GRI STANDARDS 2016
GENERAL DISCLOSURES
ORGANISATIONAL PROFILE
NOTES/PAGE NUMBER(S)
Name of the organisation
Frasers Centrepoint Trust
Activities, brands, products, and services
About Frasers Centrepoint Trust (Page 3)
102-1
102-2
102-3
102-4
Location of headquarters
Location of operations
102-5
Ownership and legal form
102-6
102-7
Markets served
Scale of the organisation
102-8
Information on employees and other workers
Singapore
Singapore, associate’s operations are in
Malaysia
About Frasers Centrepoint Trust (Page 3)
Structure of Frasers Centrepoint Trust (Page 4)
About Frasers Centrepoint Trust (Page 3)
About Frasers Centrepoint Trust (Page 3)
5-Year Financial Highlights (Page 11)
Knowing Our People (Page 80)
Knowing Our People (Page 80)
Nurturing Talent (Page 81)
All activities are carried out by employees of
the Manager of FCT
Infl uencing Our Supply Chain (Page 73)
102-9
102-10
Supply chain
Signifi cant changes to organisation and its supply
chain
No signifi cant changes
102-11
Precautionary principle or approach
102-12
102-13
STRATEGY
External initiatives
Membership of associations
FCT does not specifi cally refer to the
precautionary approach when managing risk;
however, our management approach is risk-
based, and underpinned by our internal audit
framework
Materiality (Pages 72-73)
Partnerships and Affi liations (Page 73)
102-14
Statement from senior decision-maker
Letter to Unitholders (Pages 14-17)
ETHICS AND INTEGRITY
102-16
Values, principles, standards, and norms of behaviour Upholding Good Corporate Citizenship (Pages
GOVERNANCE
102-18
Governance structure
STAKEHOLDER ENGAGEMENT
102-40
102-41
List of stakeholder groups
Collective bargaining agreements
102-42
Identifying and selecting stakeholders
74-75), Corporate Governance Report (Pages
94-116)
Management Structure (Page 71)
Corporate Governance Report (Pages 94-116)
Stakeholder Engagement (Pages 71-72)
There are no collective bargaining agreements
in place.
Stakeholder Engagement (Pages 71-72)
(We have selected these Stakeholders based
on their interests in our business.)
102-43
102-44
Approach to stakeholder engagement
Stakeholder Engagement (Pages 71-72)
Key topics and concerns raised
Stakeholder Engagement (Pages 71-72)
90 ANNUAL REPORT 2017
GRI STANDARDS 2016
REPORTING PRACTICE
NOTES/PAGE NUMBER(S)
102-45
Entities included in the consolidated fi nancial
statements
Notes to Financial Statements -Note 1 (Page
132), Note 6-8 (Pages 152-154)
102-46
Defi ning report content and topic Boundaries
Contact point for questions regarding the report
Fungleng.chen@fraserscentrepoint.com
Claims of reporting in accordance with GRI
Standards
About This Report (Page 68)
102-47
102-48
102-49
102-50
102-51
102-52
102-53
102-54
102-55
102-56
List of material topics
Restatements of information
Changes in reporting
Reporting period
Date of most recent report
Reporting cycle
GRI content index
External assurance
MANAGEMENT APPROACH
103-1
103-2
103-3
Explanation of the material topic and its boundary
The management approach and its components
Evaluation of the management approach
About This Report (Page 68)
Report Scope (Page 68)
Materiality (Pages 72-73)
Energy Management (Page 76)
No changes in report scope from last year
1 October 2016 to 30 September 2017
30 September 2016
Annual
GRI Index (Pages 90-92)
We have not sought external assurance on this
data, however we intend to review this stance
in the future.
Managing Sustainability (Pages 71-73)
Upholding Good Corporate Citizenship (Pages
74-75), Changing the Way We Look at Natural
Resources (Pages 76-79), Investing in a
Workforce of the Future (Pages 80-83)
The boundaries of all our material topics are
internal, except for customer health & safety
and local communities that are both external
and internal
MATERIAL TOPICS
ECONOMIC PERFORMANCE
201-1
Direct economic value generated and distributed
Financial Statements (Pages 118-176)
ANTI-CORRUPTION
205-3
Confi rmed incidents of corruption and actions taken
Beyond Compliance (Page 74)
Anti-Corruption and Fraud Prevention (Page
75)
ENERGY
302-1
302-4
Energy consumption within the organization
Energy Management (Page 76)
Reduction of energy consumption
Energy Management (Page 76)
G4-CRE1
Building energy intensity
WATER
303-1
Water withdrawal by source
Energy Management (Page 76)
All energy is from purchased electricity
Water Management (Page 77)
All water consumed is from purchased utilities
G4-CRE2
Building water intensity
Water Management (Page 77)
FRASERS CENTREPOINT TRUST
91
GRI INDEX
GRI STANDARDS 2016
NOTES/PAGE NUMBER(S)
EMISSIONS
305-2
305-4
305-5
G4-CRE3
Energy indirect (Scope 2) GHG emissions
Energy Management (Page 76)
GHG emissions intensity
Reduction of GHG emissions
Greenhouse gas (GHG) emissions intensity from
buildings
Energy Management (Page 76)
Energy Management (Page 76)
Energy Management (Page 76)
ENVIRONMENTAL COMPLIANCE
307-1
Non-compliance with environmental laws and
regulations
Beyond Compliance (Page 74)
EMPLOYMENT
401-1
New employee hires and employee turnover
LABOR/MANAGEMENT RELATIONS
402-1
Minimum notice periods regarding operational
changes
OCCUPATIONAL HEALTH AND SAFETY
403-1
403-2
G4-CRE6
Workers representation in formal joint management–
worker health and safety committees
Types of injury and rates of injury, occupational
diseases, lost days, and absenteeism, and number of
work-related fatalities
Percentage of the organisation operating in verifi ed
compliance with an internationally recognised health
and safety management system
TRAINING AND EDUCATION
Knowing Our People (Page 80)
Nurturing Talent (Page 81)
This is currently not covered in groupwide
collective agreements. The notice period
varies.
Management Structure (Page 71)
Safety First (Page 82)
Safety First (Page 82)
404-1
404-2
404-3
Average hours of training per year per employee
Nurturing Talent (Page 81)
Programs for upgrading employee skills and
transition assistance programs
Nurturing Talent (Page 81)
Staff Training (Page 82)
Percentage of employees receiving regular
performance and career development reviews
All employees
LOCAL COMMUNITIES
413-1
Operations with local community engagement,
impact assessments, and development programs
Stakeholder Engagement (Pages 71-72)
Giving Back To Society (Pages 86-89)
MARKETING AND LABELLING
417-3
Incidents of non-compliance concerning marketing
communications
Beyond Compliance (Page 74)
92 ANNUAL REPORT 2017
Corporate
GovernanCe
94
Corporate Governance Report
Corporate GovernanCe report
IntroDUCtIon
Frasers Centrepoint Trust (“FCt”) is a real estate investment trust (“reIt”) listed on the Main Board of the Singapore
Exchange Securities Trading Limited (the “SGX-St”). FCT is managed by Frasers Centrepoint Asset Management Ltd.
(“Manager”), which is a wholly-owned subsidiary of Frasers Centrepoint Limited (“FCL”).
The Manager is committed to upholding high standards of corporate governance to preserve and enhance FCT’s asset
value so as to maximise the returns from investments, and ultimately the distributions and total return to unitholders
of FCT (“Unitholders”).
The Manager has general powers of management over the assets of FCT. The Manager’s main responsibility is to manage
FCT’s assets and liabilities for the benefit of Unitholders. It ensures that the business of FCT is carried on and conducted
in a proper and efficient manner. It also supervises the property manager in its day-to-day management of the malls
of FCT, namely, Anchorpoint, Causeway Point, Northpoint City North Wing and Yishun 10 retail podium, YewTee Point,
Bedok Point and Changi City Point, pursuant to property management agreements entered into for each mall.
The primary role of the Manager is to set the strategic direction for FCT. This includes making recommendations to the
Trustee on acquisitions, divestments and enhancement of assets.
As required under the licensing regime for REIT managers, the Manager holds a Capital Markets Services Licence
(“CMS Licence”) issued by the Monetary Authority of Singapore (“MaS”) to carry out REIT management activities.
Listed on the Mainboard of the SGX-ST, FCT adheres closely to the principles and guidelines of the Code of Corporate
Governance 2012 (the “CG Code”) and other applicable laws, rules and regulations, including the SGX-ST Listing Manual,
the Code on Collective Investment Schemes (the “Code on CIS”) and the Securities and Futures Act (the “SFa”).
This corporate governance report (“CG report”) provides an insight on the Manager’s corporate governance framework
and practices in compliance with the principles and guidelines of the CG Code. As FCT is a listed REIT, not all principles
of the CG Code may be applicable to FCT and the Manager. Any deviations from the CG Code are explained.
BoarD MatterS
principle 1: the Board’s Conduct of affairs
The composition of the board of directors of the Manager (“Directors”, and the board of Directors, the “Board”) as
at 30 September 2017 is as follows:
Mr Philip Eng Heng Nee
Dr Chew Tuan Chiong
Dr Cheong Choong Kong
Mr Ho Chee Hwee Simon1
Mr Ho Chai Seng2
Mr Soh Kim Soon
Mr Christopher Tang Kok Kai
Chairman, Non-Executive (Non-Independent)
Chief Executive Officer (Non-Independent)
Non-Executive (Lead Independent Director)
Non-Executive (Independent)
Non-Executive (Independent)
Non-Executive (Independent)
Non-Executive (Non-Independent)
1 Mr Ho Chee Hwee Simon was appointed as a Director of the Manager on 9 February 2017.
2 Mr Ho Chai Seng was appointed as a Director of the Manager on 30 June 2017.
94 ANNUAL REPORT 2017
Corporate GovernanCe report
The Board oversees the business affairs of FCT and the Manager, providing oversight, strategic direction and
entrepreneurial leadership, and sets strategic aims and directions of the Manager. It works closely with Management,
and has oversight of and reviews Management’s performance. The Board sets the values and standards of corporate
governance for the Manager and FCT, with the ultimate aim of safeguarding and enhancing Unitholder value and
achieving sustainable growth for FCT. None of the Directors has entered into any service contract directly with FCT.
Management provides the Board with complete, timely and adequate information to keep the Directors updated on the
operations and financial performance of FCT.
As part of the Manager’s internal controls, the Board has established a Manual of Authority. This sets out the requisite
levels of authorisation required for particular types of transactions to be carried out, and specifies whether Board
approval needs to be sought. The matters reserved to the Board for approval include approval of annual budgets,
financial plans, financial statements, business strategy and material transactions of FCT, namely, major acquisitions,
divestments, funding and investment proposals, and appointment of key executives. To assist the Board to effectively
discharge its oversight and functions, appropriate delegations of authority to Management have been effected to
enhance operational efficiency. To assist the Board in its corporate governance, compliance and risk management
responsibilities, the Audit Committee (‘‘aC”) was established. In addition, the Nominating and Remuneration
Committee (“nrC”) was also established on 16 September 2016 to assist the Board in its nominating and remuneration
responsibilities, as guided by the CG Code.
New Directors are formally appointed by way of a Board resolution. The search for candidates to be appointed as new
Directors is conducted through contacts and recommendations, and/or external search companies. Suitable candidates
are carefully evaluated by the NRC so that recommendations made on proposed candidates are objective and well
supported. In recommending the appointment of new Directors, the Board takes into consideration the current Board
size and composition, including diversity of skills, experience, and knowledge of matters relating to FCT that the new
Director can provide to the Board. Two new Directors, namely Mr Ho Chee Hwee Simon and Mr Ho Chai Seng, were
appointed to the Board during the financial year ended 30 September 2017 (“FY2017”).
Upon joining the Board, new Directors undergo an induction and/or orientation programme to provide them with
information on FCT’s business, strategic directions, governance practices, policies and business activities, including
major new projects. New Directors who join the Board are issued a formal letter of appointment setting out relevant
Directors’ duties and obligations, so as to acquaint them with their responsibilities as Directors of the Manager.
The Manager sees to it that the Board is regularly updated on new developments in laws and regulations or changes
in regulatory requirements and financial reporting standards which are relevant to or may affect the Manager or FCT.
During FY2017, the Board was briefed and updated on sustainability reporting, electronic communications and recent
changes to the Companies Act (Cap. 50) of Singapore.
In addition to talks conducted by relevant professionals, members of the Board are encouraged to attend relevant
courses and seminars so as to keep themselves updated on developments and changes in FCT’s operating environment,
and to be members of the Singapore Institute of Directors (“SID”) and for them to receive journal updates and training
from SID to stay abreast of relevant developments in financial, legal and regulatory requirements, and the business
environment and outlook.
The Board meets regularly, at least once every quarter, to review the key activities, performance, business strategies and
significant operations and/or management matters pertaining to the Manager and/or FCT. In the event Directors are
unable to attend Board meetings physically, the Manager’s Constitution allows for such meetings to be conducted via
telephone, video conference or any other form of electronic or instantaneous communication. At least once a year and
if required, time is set aside after scheduled Board meetings for discussions amongst the members of the Board without
the presence of Management, in line with the guidelines of the CG Code. In addition to the meetings, the members of
the Board have access to Management throughout the financial year, thereby allowing the Board continuous strategic
oversight over the activities of FCT.
FRAsERs CENTREPOiNT TRUsT
95
Corporate GovernanCe report
The number of Board, AC and NRC meetings held during FY2017 and the attendance of Directors at these meetings
are disclosed below:
Meetings held for financial year ended 30 September 2017
Mr Philip Eng Heng Nee
Dr Chew Tuan Chiong
Dr Cheong Choong Kong
Mr Bobby Chin Yoke Choong (1)
Mr Ho Chee Hwee Simon (2)
Mr Ho Chai Seng (3)
Mr Soh Kim Soon
Mr Christopher Tang Kok Kai
Board
Meetings
aC
Meetings
nrC
Meetings
6
6
6
6
4
2
1
6
6
4
4
NA
4
4
1
1
4
NA
3
NA
NA
3
3
–
–
3
3
(1) Resigned from the Board on 31 July 2017. Mr Bobby Chin Yoke Choong was the Chairman of the AC and a member of the NRC prior to his resignation
from the Board.
(2) Appointed as Director on 9 February 2017, and as a member of the AC and NRC on 30 June 2017. Mr Ho Chee Hwee Simon was appointed as the
Chairman of the AC on 31 July 2017.
(3) Appointed as Director and as a member of the AC and NRC on 30 June 2017.
principle 2: Board Composition and Guidance
As at 30 September 2017, the Board comprised seven members, of whom four are independent non-executive Directors.
The CEO is the only Executive Director on the Board. The rest of the Board members are non-executive Directors.
The size of the Board is appropriate and adequate, having regard to the scope and nature of the Manager’s and FCT’s
business and operations. The Board is of the view that the current size and composition of the Board is appropriate for
the scope and nature of the operations of the Manager and FCT and facilitates effective decision-making. In line with
the CG Code, the Board, with the assistance of the NRC, undertook a review of the structure, size and composition
of the Board, and following the review, is of the view that the Board’s present composition and balance between
Executive, Non-Executive and Independent Directors is appropriate and allows for a balanced exchange of views,
robust deliberations and debates among members and effective oversight over Management.
The current composition gives the Board the ability to consider and make decisions objectively and independently
on issues relating to FCT and the Manager. Under the current composition, no one individual or group dominates the
Board’s decisions or its process. With respect to its size, the Board is of the view that the same is not so large as to be
unwieldy, meets the requirements of the business of the Manager and FCT, and is sufficient to avoid undue disruptions
from changes to its composition, especially in the event of exigencies. The composition of the Board shall be reviewed
regularly to ensure that the Board has the appropriate size and mix of expertise and experience. There is a strong and
independent element on the Board.
Directors exercise their judgment independently and objectively in the interests of FCT and the Manager. The Board
reviews and assesses annually the independence of its directors based on the definitions and guidelines of independence
set out in the CG Code and the proposed regulations 13D to 13G of the Securities and Future (Licensing and Conduct
of Business) Regulations (Rg 10), Chapter 289. In its review for FY2017, the NRC has endorsed in its recommendation to
the Board that the following directors are independent for FY2017:
Dr Cheong Choong Kong
Mr Ho Chee Hwee Simon
Mr Ho Chai Seng
Mr Soh Kim Soon
Independent
Independent
Independent
Independent
96 ANNUAL REPORT 2017
Corporate GovernanCe report
As part of its review, the NRC has taken into consideration, inter alia, the following:
(i)
each Independent Director’s declaration of independence, which includes questions relating to his relationship
with FCT, the Manager, the Trustee, and FCT’s sponsor, FCL, whereby, all have declared that there were no
relationships or instances that would otherwise deem him not to be independent; and
(ii)
that Mr Soh Kim Soon had served on the Board for more than 9 years.
Notwithstanding his length of service, the NRC, following its rigorous review, had recommended to the Board that
Mr Soh Kim Soon had continued to demonstrate his ability to exercise strong objective judgement, acting in the best
interests of the Manager and FCT at all times. He had and continues to remain independent in the expression of his
views and in his participation in the deliberations and decision making of the Board, the AC and the NRC.
Having considered the above factors and weighing the need to refresh board membership, the Board (with Mr Soh Kim Soon
abstaining with respect to the assessment of his own independence) determined that Mr Soh Kim Soon is independent,
notwithstanding that he has served on the Board for more than 9 years.
Each of Mr Philip Eng Heng Nee, Dr Chew Tuan Chiong and Mr Christopher Tang Kok Kai are not independent under the
proposed Regulation 13E of the Securities and Futures (Licensing and Conduct of Business) Regulations as (i) Mr Philip
Eng Heng Nee is a director of FCL, which is a substantial unitholder of FCT and the parent company of the Manager,
(ii) Dr Chew Tuan Chiong is employed by the Manager, and (iii) Mr Christopher Tang Kok Kai is employed by a related
corporation of the Manager.
The Board members have core competencies, expertise and experience in various fields ranging from accounting and
finance, to business management. Coupled with relevant industry knowledge and strategic planning experience of
the Board members, the Board is well-placed to drive FCT’s continuous growth and success and deliver sustainable
Unitholder value. Management is able to benefit from the diverse and objective perspectives of the Board members
on issues that are brought before the Board, with a healthy exchange of ideas and views between the Board and
Management, to help shape the strategic process. Directors of the Manager are not subject to periodic retirement by
rotation. The Board reviews its composition to ensure the appropriate size and diversity of skills, expertise and experience.
principle 3: Chairman and Chief executive officer
The positions of Chairman and CEO are held by separate persons. This is so that an appropriate balance of power and
authority, with clear divisions of responsibilities and accountability, can be attained. Such separation of roles between
the Chairman and the CEO promotes robust deliberations by the Board and Management on the business activities of
FCT. The Chairman and CEO are not related to each other, nor is there any other business relationship between them.
The Chairman leads and ensures the effectiveness of the Board. Through the Chairman’s continuing leadership of
the Board, constructive discussions among the Board members as well as between the Board and Management, and
effective contribution by the Directors, are promoted. High standards of corporate governance are upheld as a result.
The CEO has full executive responsibilities over the business direction and operations of the Manager.
FRAsERs CENTREPOiNT TRUsT
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Corporate GovernanCe report
principle 4: Board Membership
The Board established the NRC on 16 September 2016 to assist the Board in its nominating function, responsibilities
and role. Prior to its establishment, the functions of a nominating committee were undertaken by the Board. As
at 30 September 2017, the NRC comprises five Directors, being Mr Soh Kim Soon, Dr Cheong Choong Kong,
Mr Ho Chee Hwee Simon1, Mr Ho Chai Seng2 and Mr Christopher Tang Kok Kai, all of whom are non-executive and
the majority of whom (including its Chairman, Mr Soh Kim Soon) are independent.
The NRC has written terms of reference setting out its scope and authority in performing the functions of a nominating
committee, which include the following:
•
•
•
•
•
•
make recommendations to the Board on all Board appointments, re-appointments and the composition of the
Board and on relevant matters relating to the appointment and re-appointment of directors;
regularly review the Board structure, size, composition and the independence of the Board to ensure that the
Board has the appropriate mix of expertise and experience, and recommend to the Board such adjustments as
it may deem necessary;
ensure that at all times, there should be a strong and independent element on the Board;
put in place board succession plans for the Board’s approval and make recommendations on relevant matters
relating to the review of board succession plans for directors, in particular, the Chairman and for the CEO;
identify candidates, review and approve nominations for directors, alternate directors and membership of
Board committees (including the AC and the NRC), as well as appraise the qualifications and experience of any
proposed new appointments to the Board and to recommend to the Board whether the nomination should be
supported; and
review, on an annual basis and as and when circumstances require, whether or not a director is independent,
bearing in mind the circumstances set forth in the CG Code and any other salient factors.
The composition of the Board is determined using the following principles:
•
•
at least one-third of the Board should comprise independent directors where Unitholders have the right to
vote on the appointment of directors to the Board, and at least half of the Board should comprise independent
directors if the Chairman and the CEO is the same person, the Chairman and the CEO are immediate family
members, the Chairman is part of the management team, the Chairman is not an independent director, or where
Unitholders do not have the right to vote on the appointment of directors to the Board; and
the Board and its committees should comprise directors who as a group provide an appropriate balance and
diversity of skills, experience and knowledge of the Manager, and they should also provide core competencies
such as accounting or finance, business or management experience, industry knowledge, strategic planning
experience and customer-based experience or knowledge.
In respect of the search and nomination process for new directors, the NRC identifies the relevant and/or desirable
skills and experience, and may tap on its network of contacts and/or engage external search companies to identify and
shortlist candidates, to spread its reach for the best person for the role.
1 Mr Ho Chee Hwee Simon was appointed as a member of the NRC on 30 June 2017.
2 Mr Ho Chai Seng was appointed as a member of the NRC on 30 June 2017.
98 ANNUAL REPORT 2017
Corporate GovernanCe report
The CG Code requires listed companies to fix the maximum number of board representations on other listed
companies that their directors may hold and to disclose this in their annual report. Details of such directorships
and other principal commitments of our Directors may be found on pages 18 to 21. In determining whether each
Director is able to devote sufficient time to discharge his duties, the Board has taken cognizance of the CG Code
requirement, but is of the view that its assessment should not be restricted to the number of board representations
of each Director and their respective principal commitments per se. Holistically, the contributions by the Directors to
and during meetings of the Board and the relevant Board committees as well as their attendance at such meetings
should also be taken into account.
All appointments and resignations of Board members are approved by the Board. With the establishment of the NRC, the
NRC shall be instrumental in assisting in the review of all Board appointments, re-appointments and the composition of
the Board, its recommendations of which shall be taken into consideration by the Board in its decision.
principle 5: Board performance
The Board, with the assistance of the NRC, has implemented a process to evaluate and assess the performance
of the Board and the AC and their decision-making processes. The NRC has appointed an independent external
consultant, Ernst & Young Advisory Pte. Ltd., to assist in its evaluation and assessment process. Members of the Board
are required to assess the Board’s performance, which includes areas such as the Board’s composition and processes,
effectiveness in its management of FCT’s performance, and such other areas which the Board is of the view that
improvements are required.
The findings of the evaluation and assessment are reviewed by the Board with a view to improving its overall effectiveness
in fulfilling its role and meeting its responsibility to unitholders. The Board is committed to ensure that collectively as
a Board, and individually its members, both contribute effectively to such improvement, and is of the view that the
evaluation and assessment framework would assist to meet such commitment.
principle 6: access to Information
On an on-going basis, and prior to Board meetings, adequate and timely information is given by Management to
Board members, who have separate and independent access to Management and the Company Secretary. Under the
direction of the Chairman, the Company Secretary ensures that Board procedures, and applicable rules and regulations
are complied with. He attends all Board meetings and acts as a channel of communication for information flow and
dissemination to and within the Board, as well as between senior Management and non-executive Directors.
The annual calendar of Board activities is scheduled in advance. Board papers are dispatched to Directors about a week
before scheduled meetings so that Directors have sufficient time to review and consider matters being tabled and
discussed at the meetings. Senior Executives are requested to attend the Board meetings to provide additional insights
into matters being discussed and to respond to any queries from Directors.
The Directors, either individually or as a group, may seek or obtain independent professional advice, where necessary,
in the furtherance of their duties.
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Corporate GovernanCe report
reMUneratIon MatterS
principle 7: remuneration Matters
principle 8: Level and Mix of remuneration
principle 9: Disclosure on remuneration
FCT, as a REIT, is managed by the Manager which has experienced and well-qualified management personnel to
manage the operational matters of the Manager and FCT. The remuneration of the staff of the Manager and Directors’
fees are paid by the Manager from the fees it receives from FCT, and not by FCT.
On 16 September 2016, the Board established the NRC, to assist the Board in its remuneration function, responsibilities
and role. As at 30 September 2017, the NRC comprises five Directors, being Mr Soh Kim Soon, Dr Cheong Choong
Kong, Mr Ho Chee Hwee Simon1, Mr Ho Chai Seng2 and Mr Christopher Tang Kok Kai, all of whom are non-executive
and the majority of whom (including its Chairman, Mr Soh Kim Soon) are independent.
The NRC has written terms of reference setting out its scope and authority in performing the functions of a remuneration
committee, which include the following matters:
•
•
•
review the remuneration framework for the Board and the key executive officers of the Manager;
review the Manager’s remuneration policies, level and mix of remuneration, and the procedure for setting
remuneration; and
ensure that the remuneration of executive directors of the Manager shall not be linked in any way to FCT’s
gross revenue.
The NRC is responsible for ensuring a formal and transparent procedure for developing policy on executive remuneration
and for determining the remuneration packages of individual Directors and key management personnel of the Manager
(“Key Management personnel”). The NRC assists the Board to ensure that remuneration policies and practices are
sound in that they are able to attract, retain and motivate talents without being excessive, and thereby maximise
Unitholder value. The NRC will recommend a framework of remuneration (which covers all aspects of remuneration
including Directors’ fees, salaries, allowances, bonuses, options and benefits-in-kind) and the specific remuneration
packages for each Director to the Board for endorsement. The NRC will also review the remuneration of the CEO and
Key Management Personnel of the Manager.
The NRC, in performing the functions of a remuneration committee, and in accordance with the NRC’s written terms
of reference, supports the Board in determining and reviewing the remuneration policies and practices of the Manager.
policies in respect of Directors’ remuneration
The remuneration of Non-Executive Directors takes into account their respective responsibilities, including attendance
and time spent at Board meetings and Board Committee meetings. Non-Executive Directors are paid a basic fee
and attendance fees for attending Board meetings. Non-Executive Directors who perform services through Board
Committees are paid additional fees for such services. The CEO, who is the only Executive Director on the Board, does
not receive Directors’ fees. No Director decides his own fees. Non-Executive Directors’ fees are reviewed periodically
to benchmark such fees against the amounts paid by other major listed REITs in Singapore.
1 Mr Ho Chee Hwee Simon was appointed as a member of the NRC on 30 June 2017.
2 Mr Ho Chai Seng was appointed as a member of the NRC on 30 June 2017.
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The Directors’ fees for FY2017 are shown in the table below.
Board Members
Mr Philip Eng Heng Nee (Chairman of the Board and Member of AC)
Dr Chew Tuan Chiong
Dr Cheong Choong Kong (Member of AC and NRC)
Mr Bobby Chin Yoke Choong (1)
Mr Ho Chee Hwee Simon (2) (Chairman of AC and Member of NRC)
Mr Ho Chai Seng (3) (Member of AC and NRC)
Mr Soh Kim Soon (Member of AC and Chairman of NRC)
Mr Christopher Tang Kok Kai (4) (Member of NRC)
Directors’ Fees
S$119,000
–
S$79,500
S$76,492
S$36,117
S$18,167
S$89,000
S$58,500
(1) Resigned from the Board on 31 July 2017. Mr Bobby Chin Yoke Choong was the Chairman of the AC and a member of the NRC prior to his resignation
from the Board.
(2) Appointed as Director on 9 February 2017, and as a member of the AC and NRC on 30 June 2017. Mr Ho Chee Hwee Simon was appointed as the
Chairman of the AC on 31 July 2017.
(3) Appointed as Director and as a member of the AC and NRC on 30 June 2017.
(4) Director’s fees are paid to FCL Management Services Pte. Ltd.
remuneration policy for Management
The Managers’ remuneration framework comprises (i) a fixed component; and (ii) a variable component comprising
short-term and long-term incentives. The variable component is linked to and determined based on both: (a) FCT’s
performance; and (b) an annual appraisal of each individual employee against performance indicators including
adherence to core values, competencies, and key result areas. The potential of the employee is also taken into
consideration. The mix of fixed and variable components is considered appropriate for the Managers and for each
individual employee’s role.
The level and mix of remuneration and the remuneration benefits, policies and practices of the Manager, where
appropriate, will be reviewed by the NRC. The NRC will ensure that competitive remuneration policies and practices
are in place to attract and motivate high-performing executives so as to drive FCT’s businesses to greater growth,
efficiency and profitability.
In its deliberation, the NRC will take into consideration industry practices and benchmarks against relevant industry
players to ensure that its remuneration and employment conditions are competitive and may, if it considers necessary,
engage independent remuneration consultant(s).
The NRC will exercise broad discretion and independent judgement in ensuring that the amount and mix of
compensation are aligned with the interests of Unitholders and promote the long-term success of FCT. The NRC will
ensure that the overall level of remuneration is not considered to be at a level which is likely to promote behaviour
contrary to the Manager’s or FCT’s risk profile.
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performance Indicators for Key Management personnel
As set out above, the Manager’s variable remuneration comprises short-term and long-term incentives which takes
into account individual performance and FCT’s performance.
The Manager has put in place a framework for determining the short-term incentives of the Key Management Personnel,
where both FCT’s financial and non-financial performance will be taken into consideration. The financial performance
indicators in which the Key Management Personnel will be evaluated on comprise (i) FCT’s net portfolio property income,
(ii) Unitholder distribution, (iii) distribution per Unit and (iv) relative REIT unit price performance. These performance
indicators are quantitative and objective measures of the Manager’s performance. The non-financial performance
indicators in which the Key Management Personnel will be evaluated on include (i) FCT’s business initiatives, (ii) strategic
perspective, (iii) corporate sustainability, (iv) branding of FCT and (v) people development. These qualitative performance
indicators will align the Key Management Personnel’s performance with FCT’s strategic objectives for the financial year.
For FY2017, long-term incentives in the form of FCL share awards were granted to Key Management Personnel based
on various performance indicators, including individual performance, and FCT’s performance. The grant of long-term
incentives in the form of FCL share awards falls within the framework of the long-term incentive plans of the FCL
group, which the Manager is part of as it is wholly-owned by FCL. Such incentives allow the Manager to attract and
retain management staff by leveraging on the branding, size and value of FCL, which is one of Singapore’s top property
companies and well-established globally. FCL is also a substantial unitholder of FCT. Nevertheless, with effect from
financial year ending 30 September 2018, long-term incentives in the form of FCT unit awards will be awarded to Key
Management Personnel so as to more closely align their interests with the long-term interest of FCT and Unitholders.
The award of the FCT units will be structured as a Restricted Unit Plan. Eligible participants will receive a contingent
award based on their individual performance from their annual appraisal. The release of the contingent award is
conditional upon meeting performance targets as approved by the NRC. The long-term incentives may be settled in
FCT units, their equivalent cash value or a combination thereof.
From the financial year beginning from 1 October 2016 onwards, the NRC reviews the short-term and long-term
incentives in the Key Management Personnel’s remuneration package to ensure its compliance with the substance and
spirit of the directions and guidelines from the MAS.
Currently, the Manager does not have claw-back provisions which allow it to reclaim incentive components of
remuneration from its key executive personnel in exceptional circumstances of misstatement of financial results or
misconduct resulting in financial loss.
Pursuant to MAS’ “Notice to All Holders of a Capital Markets Services Licence for Real Estate Investment Trust
Management”, REIT managers are required to disclose (i) the remuneration of the CEO and each individual director on
a named basis, and (ii) the remuneration of at least the top five executive officers (which shall not include the CEO and
executive officers who are directors), on a named basis, in bands of S$250,000. The Board has assessed and decided
against the disclosure of the remuneration of the CEO and executive officers on a named basis, whether in exact
quantum or in bands of S$250,000, as well as the disclosure of the total remuneration paid to the top five key executive
officers (who are not directors or the CEO), and believes that the interests of the Unitholders will not be prejudiced as
a result of such non-disclosure, for the following reasons:
(i)
competition for talent in the REIT management industry is very keen and the Manager has, in the interests of
Unitholders, opted not to disclose the remuneration of its CEO and top five executive officers as this may give
rise to recruitment and talent retention issues as well as the risk of unnecessary key management turnover;
(ii)
the composition of the current management team has been quite stable and to ensure the continuity of business and
operations of FCT, it is important that the Manager continues to retain its team of competent and committed staff;
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(iii)
(iv)
due to the confidentiality and sensitivity of staff remuneration matters, the Manager is of the view that such
disclosure could be prejudicial to the interests of Unitholders; and
there is full and frank disclosure of the total amount of fees paid to the Manager set out at pages 125 and 181 of
this Annual Report.
There were no employees of the Manager who are immediate family members of a Director or the CEO during FY2017.
aCCoUntaBILItY anD aUDIt
principle 10: accountability
The Board, with the support of Management, is responsible for providing a balanced and understandable assessment
of FCT’s performance, position and prospects, on a quarterly basis. Quarterly and annual financial statements and
other material information are disseminated to Unitholders through announcements to the SGX-ST, and, where
applicable, press releases. Financial statements of FCT are prepared in accordance with the recommendations of the
Statement of Recommended Accounting Practice 7 “Reporting Framework for Unit Trusts” issued by the Institute of
Singapore Chartered Accountants and the applicable requirements of the Code on CIS issued by the MAS and the
provisions of FCT Trust Deed. The Board, with the support of Management, is responsible for providing a balanced
and understandable assessment of FCT’s performance, position and prospects. Financial reports are provided to the
Board on a quarterly basis and monthly accounts are made available to the Directors on request. Quarterly and annual
financial reports and other material information are disseminated to Unitholders through announcements released via
SGXNET, and where applicable, media releases and analysts’ briefings. Such financial reports are reviewed by the Board
before dissemination.
principle 11: risk Management and Internal Controls
The Manager has established a sound system of risk management and internal controls comprising procedures and
processes to safeguard FCT’s assets and Unitholders’ interests. The AC reviews and reports to the Board on the adequacy
and effectiveness of such controls, including financial, compliance, operational and information technology controls,
and risk management procedures and systems, taking into consideration the recommendations of both internal and
external auditors.
Internal Controls
The AC, through the assistance of internal and external auditors, reviews and reports to the Board on the adequacy
and effectiveness of the Manager’s system of controls, including financial, compliance, operational and information
technology controls. In assessing the effectiveness of internal controls, the AC ensures primarily that key objectives
are met, material assets are properly safeguarded, fraud or errors in the accounting records are prevented or detected,
accounting records are accurate and complete, and reliable financial information is prepared in compliance with
applicable internal policies, laws and regulations.
risk Management
The Board, through the AC, reviews the adequacy and effectiveness of the Manager’s risk management framework for
the Manager and FCT to ensure that robust risk management and mitigating controls are in place. The Manager has
adopted an enterprise-wide risk management (“ERM”) framework to enhance its risk management capabilities. Key
risks, control measures and management actions are continually identified, reviewed and monitored as part of the
ERM process. Financial and operational key risk indicators are in place to track key risk exposures. Apart from the ERM
process, key business risks are thoroughly assessed by Management and each significant transaction is comprehensively
analysed so that Management understands the risks involved before it is embarked upon. An outline of the Manager’s
ERM framework and progress report is set out on pages 65 and 66.
Periodic updates are provided to the AC on FCT’s and the Manager’s risk profile. These updates would involve an
assessment of FCT’s and the Manager’s key risks by risk categories, its current status, the effectiveness of mitigating
measures taken, and the action plans undertaken by Management to manage such risks.
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In addition to the ERM framework, a comfort matrix of key risks, by which relevant material financial, compliance and
operational (including information technology) risks of FCT and the Manager have been documented to assist the Board
to assess the adequacy and effectiveness of the existing internal controls. The comfort matrix is prepared with reference
to the strategies, policies, processes, systems and reporting processes connected with the management of such key
risks and presented to the Board and the AC. Risk tolerance statements setting out the nature and extent of significant
risks which the Manager is willing to take in achieving its strategic objectives have been formalised and adopted.
The Board has received assurance from the CEO and the Financial Controller of the Manager that as at 30 September 2017:
(a)
(b)
the financial records of FCT have been properly maintained and the financial statements for FY2017 give a true
and fair view of FCT’s operations and finances;
the system of internal controls in place for FCT is adequate and effective as at 30 September 2017 to address
financial, operational, compliance and information technology risks which the Manager considers relevant and
material to FCT’s operations; and
(c)
the risk management system in place for FCT is adequate and effective as at 30 September 2017 to address risks
which the Manager considers relevant and material to FCT’s operations.
opinion of the Board on Internal Controls and risk Management Framework
Based on the internal controls established and maintained by the Manager, work performed by internal and external
auditors, reviews performed by Management and the AC and assurance from the CEO and the Financial Controller of
the Manager, the Board, with the concurrence of the AC, is of the opinion that the internal controls in place for FCT,
were adequate and effective as at 30 September 2017 to address financial, operational, compliance and information
technology risks, which the Manager considers relevant and material to FCT’s operations.
Based on the risk management framework established and assurance from the CEO and the Financial Controller of the
Manager, the Board is of the view that the risk management system in place for FCT was adequate and effective as at
30 September 2017 to address risks which the Manager considers relevant and material to FCT’s operations.
The Board notes that the system of internal controls and risk management provides reasonable, but not absolute,
assurance that the Manager will not be adversely affected by any event that could be reasonably foreseen as it works
to achieve its business objectives.
In this regard, the Board also notes that no system of internal controls and risk management can provide absolute
assurance against the occurrence of material errors, poor judgment in decision making, human error, losses, fraud or
other irregularities.
principle 12: audit Committee
The AC is governed by written terms of reference, with explicit authority to investigate any matter within its terms
of reference. It has full access to, and the co-operation of Management, and full discretion to invite any Director or
executive officer to attend its meetings. It has reasonable resources to enable it to discharge its functions effectively.
The AC’s responsibilities include:
•
reviewing the effectiveness of the Manager’s internal control processes for the Manager and FCT, including
financial, compliance and risk management controls/framework, reviewing the results of audit findings, and
directing prompt remedial action by Management;
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•
•
•
•
•
•
•
reviewing the financial statements and the audit report for recommendation to the Board for approval;
monitoring Management’s compliance with applicable rules and legislation, such as the listing rules of the SGX-ST,
the Code on CIS and the SFA;
reviewing with the external auditors, the audit plans, audit reports and their evaluation of the system of
internal controls;
reviewing the appointment and re-appointment of the external auditors and their fees and recommending the
same to the Board for approval, as well as reviewing the adequacy and effectiveness of external audits in respect
of cost, scope and performance;
reviewing the independence and objectivity of the external auditors, taking into consideration the non-audit
services provided by the external auditors. For FY2017, audit fees of $148,500 and fees of $112,900 for the
non-audit services were paid/payable to FCT’s external auditors;
reviewing the adequacy and effectiveness of the internal audit function, including its resources, audit plans and
the scope and effectiveness of the internal audit procedures; and
reviewing Interested Person/Party Transactions to ascertain compliance with internal procedures and provisions
of applicable laws and regulations.
In performing its functions, the AC meets with the internal and external auditors and reviews the internal and external
audit plans and reports for FCT and the Manager, and the assistance given by Management to the auditors. All audit
findings and recommendations are presented to the AC for discussion. In addition, updates on changes in accounting
standards and treatment are prepared by external auditors and circulated to members of the AC periodically.
In the review of the financial statements, the AC has discussed with Management the accounting principles that were
applied and their judgement of items that might affect the integrity of the financial statements. The following significant
matter impacting the financial statements was discussed with Management and the external auditor and reviewed by
the AC:
Key audit Matter
How this issue was addressed by the aC
Valuation of investment properties
The AC considered the methodologies and key assumptions applied by the
valuers in arriving at the valuation of the properties.
The AC reviewed the outputs from the financial year-end valuation process
of the Group’s investment properties and discussed the details of the
valuation with Management, focusing on significant changes in fair value
measurements and key drivers of the changes.
The AC considered the findings of the external auditors, including their
assessment of the appropriateness of valuation methodologies and the
underlying key assumptions applied in the valuation of investment properties.
The AC was satisfied with the valuation process, the methodologies used and
the valuation for investment properties as adopted as at 30 September 2017.
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As at 30 September 2017, the AC comprised five non-executive Directors, the majority of whom including the
Chairman, are independent:
name
Mr Ho Chee Hwee Simon (1)
Dr Cheong Choong Kong
Mr Philip Eng Heng Nee
Mr Ho Chai Seng (2)
Mr Soh Kim Soon
role
Chairman
Member
Member
Member
Member
(1) Appointed as a member of the AC on 30 June 2017. Mr Ho Chee Hwee Simon was subsequently appointed as the Chairman of the AC with effect
from 31 July 2017.
(2) Appointed as a member of the AC on 30 June 2017.
The separation of the roles of the Chairman of the Board and the Chairman of the AC ensures greater independence of
the AC in the discharge of its duties. This is also with a view to increasing its effectiveness in assisting the Board in the
discharge of its statutory and other responsibilities in the areas of internal controls, financial and accounting matters,
compliance and risk management.
Members of the AC collectively possess the accounting and related financial management, expertise and experience
required for the AC to discharge its responsibilities and assist the Board in its oversight over Management in the design,
implementation and monitoring of risk management and internal control systems.
external auditors
KPMG LLP (“KpMG”) was re-appointed as the external auditors of FCT pursuant to the approval of the Unitholders on
20 January 2017. The Manager confirms that FCT complies with Rules 712 and 715 of the Listing Manual in relation to
the appointment of KPMG as the external auditors of FCT. The AC has conducted a review of all non-audit services
provided by KPMG during the financial period. The AC is satisfied that given the nature and extent of non-audit
services provided and the fees for such services, neither the independence nor the objectivity of KPMG is put at
risk. KPMG has attended the AC meeting held every quarter for FY2017, and where appropriate, has met with the AC
without the presence of Management to discuss their findings, if any.
It is proposed that at the forthcoming FCT Annual General Meeting, KPMG be re-appointed as the external auditors of
FCT and that the Manager be authorised to fix their remuneration.
WHIStLe-BLoWInG poLICY
A Whistle-Blowing Policy is in place to provide an avenue through which employees and any other persons may
report or communicate, in good faith and in confidence, any concerns relating to financial and other matters, so that
independent investigation of such matters can be conducted and appropriate follow-up action taken.
principle 13: Internal audit
The Manager has in place an internal audit function (“Ia”) established within the FCL Group to independently examine
and evaluate the activities of the Manager, focusing on the adequacy and effectiveness of internal controls, risk
management and corporate governance processes.
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The FCL Group IA is independent of the activities that it audits. The Head of Group IA, who is a Certified Fraud Examiner
and a Fellow of The Institute of Singapore Certified Accountants (ISCA), CPA Australia and ACCA, reports directly to the
Chairman of the AC. The Head of Group IA and the Singapore-based IA staff are members of the Institute of Internal
Auditors, Singapore and FCL Group IA has adopted and complied with the Standards for the Professional Practice of
Internal Auditing set by the Institute of Internal Auditors, Inc. To ensure that the internal audits are effectively performed,
it recruits and employs suitably qualified staff with the requisite skills and experience. Such staff are also given relevant
training and development opportunities to update their technical knowledge and auditing skills. All IA staff received
relevant technical training and attended seminars organised by the Institute of Internal Auditors, Singapore or other
professional bodies.
The FCL Group IA operates within the framework stated in the Terms of Reference as contained in the Internal Audit
Charter approved by the AC. It adopts a risk-based audit methodology to develop its audit plans, and its activities are
aligned to key risks of FCT. Based on risk assessments performed, greater focus and appropriate review intervals are
set for higher risk activities and material internal controls. The audit scope also included review of compliance with the
policies, procedures and regulatory responsibilities of FCT and the Manager.
During the year, Group IA conducted its audit reviews based on the approved Internal Audit Plan. All audit reports
detailing audit findings and recommendations are provided to Management who would respond on the actions to be
taken. Each quarter, IA would submit to the AC a report on the status of the Audit Plan and on audit findings and actions
taken by Management on such findings. Key findings are highlighted at the AC meetings for discussion and follow-up
action. The AC monitors the timely and proper implementation of appropriate follow-up measures to be undertaken
by Management.
The AC is satisfied that for FY2017, the internal audit function is adequately resourced and has appropriate standing
within FCT and the Manager to perform its functions effectively.
UnItHoLDer rIGHtS anD reSponSIBILItIeS
principle 14: Unitholder rights
The Manager believes in treating all Unitholders fairly and equitably. It aspires to keep all Unitholders and other
stakeholders and analysts in Singapore and beyond informed of FCT’s activities, including changes (if any) in FCT’s
business which are likely to materially affect the price or value of its Units, in a timely and consistent manner.
Unitholders are also given the opportunity to participate effectively and vote at general meetings of FCT, where relevant
rules and procedures governing such meetings (for instance, how to vote) are clearly communicated.
principle 15: Communication with Unitholders
The Manager strives to uphold high standards of disclosure and corporate transparency. It aims to provide timely,
effective and fair information relating to FCT’s performance and its developments to its Unitholders and the investment
community through announcements to the SGX-ST and on FCT’s website, to enable them to make informed investment
decisions. The Manager has a dedicated investor relations manager (“Ir manager”) to facilitate communication between
FCT, its Unitholders and the investment community.
The Manager meets and communicates regularly with Unitholders and the investment community to keep them
apprised of FCT’s corporate developments and financial performance. During FY2017, the senior Management and the
IR manager, met or spoke with 235 investors at investment conferences, non-deal road shows as well as one-on-one
and group meetings. The Manager also conducts post-result briefings for analysts and the media, following the release
of its half year and full year results. For its first quarter and third quarter results, this is done by conference calls. The
Manager makes available all its briefing materials, its financial information, its annual reports and all announcements
to the SGX-ST on its website at www.fct.sg, with contact details for investors to channel their comments and queries.
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principle 16: Conduct of Unitholder Meetings
A copy of the FCT Annual Report is sent to all Unitholders. In compliance with the Code on CIS, an Annual General
Meeting (“aGM”) is held after the close of each financial year allowing the Manager to interact with investors. The Board
supports and encourages active Unitholder participation at AGMs. It believes that AGMs serve as an opportune forum
for Unitholders to meet the Board and senior Management, and to interact with them. Board members and appropriate
senior Management are present at each Unitholders’ meeting to respond to any questions from Unitholders. The
external auditors are also present to address queries about the conduct of audit and the preparation and content of
the auditors’ report.
The Manager has implemented electronic poll voting at its AGMs, whereby Unitholders are invited to vote on relevant
resolutions by way of poll (instead of by show of hands), using hand held electronic devices. This allows all Unitholders
present or represented at the meeting to vote on a one vote per Unit basis. The voting results of all votes cast for, or
against, of each resolution are displayed at the meeting and announced to the SGX-ST after the meeting. The Manager
will continue to use the electronic poll voting system at the forthcoming AGM.
DeaLInGS In UnItS
The Manager has adopted a dealing policy (“Dealing policy”) on securities trading which provides guidance with regard
to dealings in FCT units by its Directors, officers and employees. Directors, officers and employees are prohibited from
dealing in FCT units:
•
in line with the Listing Rule 1207(19)(c) on Dealings in Securities, two weeks before the date of announcement of
quarterly financial statements and one month before the date of announcement of full-year results (“prohibition
period”); and
•
at any time while in possession of unpublished material or price sensitive information.
Directors, officers and employees are also directed to refrain from dealing in FCT units on short-term considerations.
Prior to the commencement of the Prohibition Period, Directors, officers and employees will be reminded not to
trade during this period or whenever they are in possession of unpublished price sensitive information. Outside of the
Prohibition Period, any trades must be reported to the Board within 48 hours. Every quarter, each Director, officer or
employee is required to complete and submit a declaration form to the Compliance Officer to report any trades he/
she made in FCT units in the previous quarter and confirm that no trades were made during the Prohibition Period. A
quarterly report will be provided to the AC. Any non-compliance with the Dealing Policy will be reported to the AC for
its review and instructions.
In compliance with the Dealing Policy in relation to the Manager, prior approval from the Board is required before the
Manager deals or trades in FCT units. The Manager has undertaken that it will not deal in FCT units:
(a)
during the period commencing one month before the public announcement of FCT ’s full-year results and
(where applicable) property valuations and two weeks before the public announcement of FCT ’s quarterly
results; or
(b) whenever it is in possession of unpublished material price sensitive information.
The Manager has also given an undertaking to the MAS that it will announce to the SGX-ST the particulars of its holdings
in FCT units and any changes thereto within two business days after the date on which it acquires or disposes of any
FCT units, as the case may be.
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ConFLICtS oF IntereSt
The Manager has put in place procedures to address potential conflicts of interest (including in relation to Directors,
officers and employees) which may arise in managing FCT. These include the following:
•
•
•
•
•
•
The Manager is to be dedicated to managing FCT and will not directly or indirectly manage other REITs;
All executive officers of the Manager will be employed by the Manager;
All resolutions in writing of the Directors in relation to matters concerning FCT must be approved by a majority
of the Directors, including at least one Independent Director;
At least one-third of the Board shall comprise Independent Directors;
On matters where FCL and/or its subsidiaries have an interest (directly or indirectly), Directors nominated by
them shall abstain from voting. In such matters, the quorum must comprise a majority of independent Directors
and must exclude nominee Directors of FCL and/or its subsidiaries; and
An interested Director is required to disclose his interest in any proposed transaction with FCT and is required to
abstain from voting on resolutions approving the transaction.
IntereSteD perSon tranSaCtIonS
The Manager has established internal control procedures to ensure that all interested person transactions (“Ipts”) are
undertaken on normal commercial terms, and will not be prejudicial to the interests of FCT and the Unitholders. This
may entail obtaining (where practicable) quotations from parties unrelated to the Manager, or obtaining one or more
valuations from independent professional valuers (in accordance with the Property Funds Appendix).
All IPTs are entered in a register maintained by the Manager, including any quotations from unrelated parties and
independent valuations supporting the bases on which such transactions are entered into. The Manager incorporates
into its internal audit plan a review of the IPTs recorded in the register to ascertain that internal procedures and
requirements of the Listing Manual and Property Funds Appendix have been complied with. The AC reviews the internal
audit reports twice a year to ascertain that the guidelines and procedures established to monitor IPTs have been
complied with. In addition, the Trustee also has the right to review any such relevant internal audit reports to ascertain
that the Property Fund Appendix have been complied with.
In respect of transactions entered into or to be entered into by the Trustee for and on behalf of FCT with an interested
person, the Trustee is required to satisfy itself that such transactions are conducted on normal commercial terms,
are not prejudicial to the interests of FCT and the Unitholders, and in accordance with all applicable requirements of
the Property Funds Appendix and/or the Listing Manual. The Trustee has the ultimate discretion under the Trust Deed
entered into between the Trustee and the Manager constituting FCT to decide whether or not to enter into such a
transaction involving an interested person.
roLe oF tHe aC For IntereSteD perSon tranSaCtIonS
The AC reviews IPTs periodically to ensure compliance with the internal control procedures and the relevant provisions
of the Listing Manual and Property Funds Appendix. Any member who has an interest in a transaction shall abstain from
participating in the review and approval processes in relation to that transaction.
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aDDItIonaL DISCLoSUre on FeeS paYaBLe to tHe ManaGer
Pursuant to the Trust Deed, the Manager is entitled to receive the following fees:
type of Fee
Computation and Form of payment
rationale and purpose
The base fee compensates the Manager
for the costs incurred in managing
FCT, which includes overheads, day-
to-day operational costs, compliance,
monitoring and reporting costs as well
as administrative expenses.
The base fee is calculated at a fixed
percentage of asset value as the
scope of the Manager’s duties
is
commensurate with the size of FCT’s
asset portfolio.
fee, which
is
The performance
Income,
based on Net Property
aligns the interests of the Manager
with Unitholders as the Manager is
incentivised to proactively focus on
improving rentals and optimising the
operating costs and expenses of FCT’s
properties. Linking the Performance
Fee to Net Property Income will also
motivate
to ensure
the Manager
the long-term sustainability of the
assets instead of taking on excessive
short-term risks to the detriment of
Unitholders.
for
the
The Acquisition Fee and Divestment
Fee seek to motivate and compensate
time, cost
the Manager
and effort spent (in the case of an
acquisition) in sourcing, evaluating and
executing potential opportunities to
acquire new properties to further grow
FCT’s asset portfolio or, (in the case
of a divestment) in rebalancing and
unlocking the underlying value of the
existing properties.
Base Fee
Pursuant to Clause 15.1.1 of the Trust Deed, the
Manager is entitled to receive a Base Fee not
exceeding the rate of 0.3% per annum of the
Value of FCT’s Deposited Property.
The Base Fee is payable quarterly in the form of
cash and/or Units as the Manager may elect.
Performance Fee
Acquisition Fee
Pursuant to Clause 15.1.2 of the Trust Deed, the
Manager is entitled to receive a Performance
Fee equal to a rate of 5.0% per annum of the Net
Property Income (calculated before accounting
for the Performance Fee in that Financial Year)
of FCT or (as the case may be) Special Purpose
Vehicles for each Financial Year accrued to the
Manager and remaining unpaid.
The Performance Fee is payable in the form of
cash and/or Units as the Manager may elect.
from 1 October 2016,
With effect
the
Performance Fee shall be paid annually, in
compliance with the Property Funds Appendix.
Pursuant to Clause 15.2.1(i) of the Trust Deed, the
Manager is entitled to receive an Acquisition Fee
not exceeding the rate of 1.0% of the acquisition
price upon the completion of an acquisition.
Subject to the Property Funds Appendix, the
Acquisition Fee is payable as soon as practicable
after completion of the acquisition in the form
of cash and/or Units as the Manager may elect.
110 ANNUAL REPORT 2017
Corporate GovernanCe report
aDDItIonaL DISCLoSUre on FeeS paYaBLe to tHe ManaGer (Cont’D)
type of Fee
Computation and Form of payment
rationale and purpose
Divestment Fee
Pursuant to Clause 15.2.1(ii) of the Trust Deed,
the Manager is entitled to receive a Divestment
Fee not exceeding the rate of 0.5% of the sale
price upon the completion of a sale or disposal.
Subject to the Property Funds Appendix, the
Divestment Fee is payable as soon as practicable
after completion of the sale or disposal in the form
of cash and/or Units as the Manager may elect.
The Manager provides these services
over and above the provision of
ongoing management services with the
aim of enhancing long-term returns,
income sustainability and achieving the
investment objectives of FCT.
The Acquisition Fee is higher than
the Divestment Fee because there
is additional work required to be
in terms of sourcing,
undertaken
and conducting due
evaluating
for an acquisition, as
diligence
compared to a divestment.
GUIDeLIneS For DISCLoSUre
Guideline
Questions
How has the Company complied
General
(a)
Has the Company complied with all the
principles and guidelines of the Code? If
not, please state the specific deviations
and the alternative corporate governance
practices adopted by the Company in lieu
of the recommendations in the Code.
Please refer to the disclosures and
references in this table for the specific
deviations from the Code.
(b)
In what respect do these alternative
corporate governance practices achieve
the objectives of the principles and
conform to the guidelines in the Code?
The Manager has adopted alternative
corporate governance practices which
reflect the fact that the Manager itself
is not a listed entity but that the entity
which it manages, Frasers Centrepoint
Trust (“FCt”), is listed and managed
externally by the Manager.
Board responsibility
Guideline 1.5
What are the types of material transactions which
require approval from the Board?
Please refer to page 95 of this
Annual Report
FRAsERs CENTREPOiNT TRUsT
111
Corporate GovernanCe report
GUIDeLIneS For DISCLoSUre (Cont’D)
Guideline
Questions
How has the Company complied
Members of the Board
Guideline 2.6
(a) What is the Board’s policy with regard to
diversity in identifying director nominees?
Please refer to pages 96 to 99 of this
Annual Report.
(b)
state whether
the current
Please
composition of
the Board provides
diversity on each of the following –
skills, experience and knowledge of the
Company, and elaborate with numerical
data where appropriate.
(c) What steps has the Board taken to achieve
the balance and diversity necessary to
maximize its effectiveness?
Please describe the board nomination process
for the Company in the last financial year for (i)
selecting and appointing new directors and (ii)
re-electing incumbent directors.
Please refer to pages 96 to 99 of this
Annual Report.
Please refer to pages 96 to 99 of this
Annual Report.
Please refer to pages 98 to 99 of this
Annual Report.
Directors of the Manager are not subject
to periodic retirement by rotation.
Guideline 4.6
Guideline 1.6
(a)
Are new directors given formal training? If
not, please explain why.
Yes. Please refer to page 95 of this
Annual Report.
Guideline 4.4
(b) What are the types of information and
training provided to (i) new directors and (ii)
existing directors to keep them up-to-date?
(a) What is the maximum number of listed
company board representations that the
Company has prescribed for its directors?
What are the reasons for this number?
Please refer to page 95 of this
Annual Report.
No maximum number has been
prescribed.
(b)
If a maximum number has not been
determined, what are the reasons?
Please refer to page 99 of this
Annual Report
(c) What are the specific considerations in
deciding on the capacity of directors?
Please refer to page 99 of this
Annual Report
112 ANNUAL REPORT 2017
Corporate GovernanCe report
GUIDeLIneS For DISCLoSUre (Cont’D)
Guideline
Questions
How has the Company complied
Board evaluation
Guideline 5.1
Independence
of Directors
Guideline 2.1
(a) What was the process upon which the
Board reached the conclusion on its
performance for the financial year?
Please refer to page 99 of this
Annual Report.
(b) Has the Board met
its performance
objectives?
Please refer to page 99 of this
Annual Report.
Does the Company comply with the guideline
on the proportion of independent directors on
the Board? If not, please state the reasons for
the deviation and the remedial action taken by
the Company
Yes. Please refer to pages 96 to 97 of
this Annual Report.
Guideline 2.3
(a)
None.
Is there any director who is deemed to be
independent by the Board, notwithstanding
the existence of a relationship as stated
in the Code that would otherwise deem
him not to be independent? If so, please
identify the director and specify the nature
of such relationship.
b) What are
the Board’s
for
independent? Please
reasons
considering him
provide a detailed explanation.
Not applicable.
Guideline 2.4
(a)
Has any independent director served on
the Board for more than nine years from
the date of his first appointment? If so,
please identify the director and set out
the Board’s reasons for considering him
independent.
Yes. Mr Soh Kim Soon has served on
the Board for more than nine years
from the date of his first appointment.
Please refer to page 97 of this Annual
Report for the Board’s reasons for
considering him independent.
FRAsERs CENTREPOiNT TRUsT
113
Corporate GovernanCe report
GUIDeLIneS For DISCLoSUre (Cont’D)
Guideline
Questions
How has the Company complied
Disclosure on
remuneration
Guideline 9.2
Has the Company disclosed each director’s and
the CEO’s remuneration as well as a breakdown
(in percentage or dollar terms) into base/fixed
salary, variable or performance related income/
bonuses, benefits-in-kind, stock options granted,
share-based incentives and awards, and other
long-term incentives? If not, what are the reasons
for not disclosing so?
Guideline 9.3
(a)
Has the Company disclosed each key
management personnel’s remuneration,
in bands of S$250,000 or in more detail,
as well as a breakdown (in percentage or
dollar terms) into base/fixed salary, variable
or performance-related income/bonuses,
benefits-in-kind, stock options granted,
share-based incentives and awards, and
other long-term incentives? If not, what
are the reasons for not disclosing so?
(b)
the
disclose
Please
aggregate
remuneration paid
top key
management personnel (who are not
directors or the CEO).
the
to
The fees paid to all directors for the
financial year have been disclosed.
Please refer to pages 100 to 103 of this
Annual Report.
Please refer to pages 100 to 103 of this
Annual Report.
Please refer to pages 100 to 103 of this
Annual Report.
Guideline 9.4
Is there any employee who is an immediate
family member of a director or the CEO, and
whose remuneration exceeds S$50,000 during
the year? If so, please identify the employee and
specify the relationship with the relevant director
or the CEO.
No.
Guideline 9.6
(a)
Please describe how the remuneration
received by executive directors and
key management personnel has been
determined by the performance criteria.
Please refer to pages 100 to 103 of this
Annual Report.
(b) What were the performance conditions
used to determine their entitlement under
the short-term and long-term incentive
schemes?
Please refer to pages 100 to 103 of this
Annual Report.
(c) Were all of these performance conditions
met? If not, what were the reasons?
Please refer to pages 100 to 103 of this
Annual Report.
114 ANNUAL REPORT 2017
Corporate GovernanCe report
GUIDeLIneS For DISCLoSUre (Cont’D)
Guideline
Questions
How has the Company complied
risk Management and
Internal Controls
Guideline 6.1
What types of information does the Company
provide to independent directors to enable
them to understand its business, the business
and financial environment as well as the risks
faced by the Company? How frequently is the
information provided?
Please refer to page 99 of this
Annual Report.
Guideline 13.1
Does the Company have an internal audit
function? If not, please explain why
Yes. Please refer to pages 106 to 107
of this Annual Report.
Guideline 11.3
(a)
(b)
Guideline 12.6
(a)
In relation to the major risks faced by the
Company, including financial, operational,
compliance, information technology and
sustainability, please state the bases for
the Board’s view on the adequacy and
effectiveness of the Company’s internal
controls and risk management systems.
In respect of the past 12 months, has the
Board received assurance from the CEO
and the CFO as well as the internal auditor
that: (i) the financial records have been
properly maintained and the financial
statements give true and fair view of the
Company’s operations and finances; and
(ii) the Company’s risk management and
internal control systems are effective? If
not, how does the Board assure itself of
points (i) and (ii) above?
Please provide a breakdown of the fees
paid in total to the external auditors for
audit and non-audit services for the
financial year
(b)
If the external auditors have supplied a
substantial volume of non-audit services
to the Company, please state the bases
for the AC’s view on the independence of
the external auditors
Please refer to page 104 of this
Annual Report.
Please refer to page 104 of this
Annual Report.
Please refer to page 105 of this
Annual Report.
Please refer to page 106 of this
Annual Report.
FRAsERs CENTREPOiNT TRUsT
115
Corporate GovernanCe report
GUIDeLIneS For DISCLoSUre (Cont’D)
Guideline
Questions
How has the Company complied
Communication
With Shareholders
Guideline 15.4
(a)
Does the Company regularly communicate
with shareholders and attend to their
questions? How often does the Company
meet with institutional and retail investors?
Yes. Please refer to pages 107 to 108
of this Annual Report.
Is this done by a dedicated investor relations team
(or equivalent)? If not, who performs this role?
Yes. Please refer to page 107 of this
Annual Report.
Guideline 15.5
If the Company is not paying any dividends for
the financial year, please explain why.
Not applicable. Please refer to the
“Distribution Statements” on page 126
of this Annual Report.
116 ANNUAL REPORT 2017
FInanCIaLS
118
119
120
124
125
126
127
128
131
132
Report of the Trustee
Statement by the Manager
Independent Auditors’ Report to the
Unitholders of Frasers Centrepoint Trust
Balance Sheets
Statements of Total Return
Distribution Statements
Statements of Movements in Unitholders’
Funds and Translation Reserve
Portfolio Statements
Cash Flow Statements
Notes to the Financial Statements
otHerS
177
181
182
Statistics of Unitholdings
Additional Information
Notice of Annual General Meeting
Proxy Form
report oF tHe trUStee
YEAR ENDED 30 SEPTEMBER 2017
HSBC Institutional Trust Services (Singapore) Limited (the “Trustee”) is under a duty to take into custody and hold the
assets of Frasers Centrepoint Trust (the “Trust”) and its subsidiary (collectively, the “Group”) in trust for the holders
(“Unitholders”) of units in the Trust (the “Units”). In accordance with the Securities and Futures Act, Chapter 289 of
Singapore, its subsidiary legislation and the Code on Collective Investment Schemes, the Trustee shall monitor the
activities of Frasers Centrepoint Asset Management Ltd. (the “Manager”) for compliance with the limitations imposed on
the investment and borrowing powers as set out in the trust deed dated 5 June 2006 (as amended by a first supplemental
deed dated 4 October 2006, a first amending and restating deed dated 7 May 2009, a second supplemental deed dated
22 January 2010, a third supplemental deed dated 17 December 2015 and a fourth supplemental deed dated 19 January
2017) (the “Trust Deed”) between the Manager and the Trustee in each annual accounting period and report thereon to
Unitholders in an annual report.
To the best knowledge of the Trustee, the Manager has, in all material respects, managed the Trust during the period
covered by these financial statements set out on pages 124 to 176, in accordance with the limitations imposed on the
investment and borrowing powers set out in the Trust Deed.
For and on behalf of the Trustee,
HSBC Institutional trust Services (Singapore) Limited
esther Fong
Authorised Signatory
Singapore
15 November 2017
118 ANNUAL REPORT 2017
StateMent BY tHe ManaGer
YEAR ENDED 30 SEPTEMBER 2017
In the opinion of the directors of Frasers Centrepoint Asset Management Ltd., the accompanying financial statements set
out on pages 124 to 176, comprising the consolidated balance sheet and consolidated portfolio statement of the Group
and the balance sheet and portfolio statement of the Trust as at 30 September 2017, and the consolidated statement
of total return, consolidated distribution statement, consolidated statement of movement in unitholders’ funds and
consolidated cash flow statement of the Group and the statement of total return, distribution statement, statement of
movements in unitholders’ funds of the Trust for the year then ended, and notes to the financial statements, including
a summary of significant accounting policies are drawn up so as to present fairly, in all material respects, the financial
positions of the Group and the Trust as at 30 September 2017, the total return, distributable income, movements in
unitholders’ funds of the Group and of the Trust and cash flow of the Group for the year then ended, in accordance
with the recommendations of Statement of Recommended Accounting Practice 7 Reporting Framework for Unit Trusts
issued by the Institute of Singapore Chartered Accountants and the provisions of the Trust Deed. At the date of this
statement, there are reasonable grounds to believe that the Group and the Trust will be able to meet their financial
obligations as and when they materialise.
For and on behalf of the Manager,
Frasers Centrepoint asset Management Ltd.
Mr philip eng Heng nee
Director
Dr Chew tuan Chiong
Director and Chief Executive Officer
Singapore
15 November 2017
FRAsERs CENTREPOiNT TRUsT
119
InDepenDent aUDItorS’ report
TO THE UNITHOLDERS
FRASERS CENTREPOINT TRUST
(CONSTITUTED UNDER A TRUST DEED (AS AMENDED) IN THE REPUBLIC OF SINGAPORE)
report on tHe aUDIt oF tHe FInanCIaL StateMentS
Opinion
We have audited the financial statements of Frasers Centrepoint Trust (the “Trust”) and its subsidiary (the “Group”), which
comprise the consolidated balance sheet and consolidated portfolio statement of the Group and the balance sheet
and portfolio statement of the Trust as at 30 September 2017, the consolidated statement of total return, consolidated
distribution statement, consolidated statement of movements in unitholders’ funds and consolidated cash flow
statement of the Group and the statement of total return, distribution statement and statement of movements in
unitholders’ funds of the Trust for the year then ended, and notes to the financial statements, including a summary of
significant accounting policies as set out on pages 124 to 176.
In our opinion, the accompanying consolidated financial statements of the Group and the balance sheet, statement
of total return, distribution statement and statement of movements in unitholders’ funds of the Trust present fairly, in
all material respects, the consolidated financial position of the Group and the financial position of the Trust as at 30
September 2017 and the consolidated total return, consolidated distributable income, consolidated movements in
unitholders’ funds and consolidated cash flows of the Group and the total return, distributable income and movements
in unitholders’ funds of the Trust for the year ended on that date in accordance with the recommendations of Statement
of Recommended Accounting Practice 7 (“RAP 7”) Reporting Framework for Unit Trusts issued by the Institute of
Singapore Chartered Accountants (the “ISCA”).
Basis for opinion
We conducted our audit in accordance with Singapore Standards on Auditing (“SSAs”). Our responsibilities under those
standards are further described in the Auditors’ responsibilities for the audit of the financial statements section of our
report. We are independent of the Group in accordance with the Accounting and Corporate Regulatory Authority
(“ACRA”) Code of Professional Conduct and Ethics for Public Accountants and Accounting Entities (“ACRA Code”)
together with the ethical requirements that are relevant to our audit of the financial statements in Singapore, and we
have fulfilled our other ethical responsibilities in accordance with these requirements and the ACRA Code. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements of the current period. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Valuation of investment properties
(Refer to Portfolio Statement and Note 3 to the financial statements)
Risk
The Group and the Trust own suburban retail malls located all around Singapore. These malls, classified as investment
properties, are all located within close proximity to Mass Rapid Transit stations and bus interchanges in populated
residential areas. As at 30 September 2017, the investment properties, with carrying amount of $2.67 (2016: $2.51)
billion, represent the single largest asset category on the consolidated balance sheet of the Group and the balance
sheet of the Trust.
The investment properties are stated at their fair values based on independent external valuations. The valuation process
is considered a key audit matter because it involves significant judgement in determining the appropriate valuation
methodology to be used, and in estimating the underlying assumptions to be applied. Any changes in the assumptions
will have an impact on the valuation.
120 ANNUAL REPORT 2017
InDepenDent aUDItorS’ report
TO THE UNITHOLDERS
FRASERS CENTREPOINT TRUST
(CONSTITUTED UNDER A TRUST DEED (AS AMENDED) IN THE REPUBLIC OF SINGAPORE)
Our response
We assessed the competence and objectivity of the independent external valuers and held discussions with the valuers
to understand their assumptions and basis used, where appropriate.
We considered the valuation methodologies used against those applied by other valuers for similar property types.
We evaluated the appropriateness of the capitalisation, discount and terminal yield rates applied by comparing them
against historical rates and available industry data, taking into consideration comparability and market factors.
Our findings
The valuers are members of recognised professional bodies for valuers.
The approach to the methodologies and in deriving the assumptions in the valuations is supported by market practices
and data.
Other Information
Frasers Centrepoint Asset Management Ltd., the Manager of the Trust (the “Manager”) is responsible for the other
information contained in the annual report. Other information is defined as all information in the annual report other
than the financial statements and our auditors’ report thereon.
We have obtained About Frasers Centrepoint Trust, Structure of FCT and Organisation Structure of the Manager, FCT
Business Strategy, FY2017 Highlights and Key Events, 5-Year Performance at a Glance and Financial Highlights, Unit Price
Performance, Letter to Unitholders, Board of Directors, Trust Management Team, Property Management Team, Investor
Relations, Operations & Financial Review, Capital Resources, Retail Property Market Overview, FCT Portfolio Overview,
Causeway Point, Northpoint City North Wing and Yishun 10 Retail Podium, Changi City Point, Bedok Point, YewTee
Point, Anchorpoint, Mall Directory, Investment in Hektar REIT, Risk Management, Sustainability Report, Corporate
Governance Report, Report of the Trustee, Statement by the Manager and Additional Information, prior to the date of
this auditors’ report. The Statistics of Unitholdings (the “Report”) is expected to be made available to us after that date.
Our opinion on the financial statements does not cover the other information and we do not and will not express any
form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information identified
above and, in doing so, consider whether the other information is materially inconsistent with the financial statements
or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of this auditors’
report, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
When we read the Reports, if we conclude that there is a material misstatement therein, we are required to communicate
the matter to the Manager and take appropriate actions in accordance with SSAs.
Responsibilities of the Manager for the financial statements
The Manager is responsible for the preparation and fair presentation of these financial statements in accordance with the
recommendations of RAP 7 issued by the ISCA, and for such internal control as the Manager determines is necessary to
enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Manager is responsible for assessing the Group’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
unless the Manager either intends to terminate the Group or to cease operations of the Group, or has no realistic
alternative but to do so.
The responsibilities of the Manager include overseeing the Group’s financial reporting process.
FRAsERs CENTREPOiNT TRUsT
121
InDepenDent aUDItorS’ report
TO THE UNITHOLDERS
FRASERS CENTREPOINT TRUST
(CONSTITUTED UNDER A TRUST DEED (AS AMENDED) IN THE REPUBLIC OF SINGAPORE)
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
SSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with SSAs, we exercise professional judgement and maintain professional scepticism
throughout the audit. We also:
•
•
•
•
•
•
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal controls.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s internal controls.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the Manager.
Conclude on the appropriateness of the Manager’s use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the
financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based
on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may
cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures,
and whether the financial statements represent the underlying transactions and events in a manner that achieves
fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the consolidated financial statements. We are responsible for the
direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the Manager regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal controls that we identify during our audit.
We also provide the Manager with a statement that we have complied with relevant ethical requirements regarding
independence, and communicate with them all relationships and other matters that may reasonably be thought to bear
on our independence, and where applicable, related safeguards.
122 ANNUAL REPORT 2017
InDepenDent aUDItorS’ report
TO THE UNITHOLDERS
FRASERS CENTREPOINT TRUST
(CONSTITUTED UNDER A TRUST DEED (AS AMENDED) IN THE REPUBLIC OF SINGAPORE)
From the matters communicated with the Manager, we determine those matters that were of most significance in
the audit of the financial statements of the current period and are therefore the key audit matter. We describe these
matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
The engagement partner on the audit resulting in this independent auditors’ report is Karen Lee Shu Pei.
KpMG LLp
Public Accountants and
Chartered Accountants
Singapore
15 November 2017
FRAsERs CENTREPOiNT TRUsT
123
BaLanCe SHeetS
AS AT 30 SEPTEMBER 2017
non-current assets
Investment properties
Fixed assets
Intangible assets
Investment in subsidiary
Investment in associate
Investment in joint venture
Current assets
Trade and other receivables
Cash and cash equivalents
total assets
Current liabilities
Trade and other payables
Financial derivatives
Current portion of security deposits
Deferred income
Interest-bearing borrowings
non-current liabilities
Financial derivatives
Interest-bearing borrowings
Non-current portion of security deposits
Deferred income
total liabilities
net assets
Represented by:-
Unitholders’ funds
Translation reserve
Unitholders’ funds and reserve
Units in issue (’000)
net asset value per Unit ($)
* Denotes amount less than $500
Group
trust
note
2017
$’000
2016
$’000
2017
$’000
2016
$’000
3
4
5
6
7
8
9
10
11
12
13
14
12
14
13
15
16
17
2,668,100
80
30
–
64,608
243
2,733,061
2,509,000
86
48
–
59,600
235
2,568,969
2,668,100
80
30
*
64,608
1
2,732,819
2,509,000
86
48
*
63,843
1
2,572,978
4,257
13,547
17,804
6,800
18,708
25,508
4,257
13,547
17,804
6,800
18,708
25,508
2,750,865
2,594,477
2,750,623
2,598,486
32,674
–
17,208
134
152,000
202,016
317
645,540
30,774
15
676,646
39,359
601
20,413
427
218,000
278,800
–
516,000
23,883
149
540,032
32,695
–
17,208
134
152,000
202,037
317
645,540
30,774
15
676,646
39,377
601
20,413
427
218,000
278,818
–
516,000
23,883
149
540,032
878,662
818,832
878,683
818,850
1,872,203
1,775,645
1,871,940
1,779,636
1,892,669
(20,466)
1,872,203
1,794,694
(19,049)
1,775,645
1,871,940
–
1,871,940
1,779,636
–
1,779,636
922,448
919,369
922,448
919,369
2.02
1.93
2.02
1.93
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
124 ANNUAL REPORT 2017
StateMentS oF totaL retUrn
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2017
Gross revenue
Property expenses
net property income
Borrowing costs
Asset management fees
Valuation fees
Trustee’s fees
Audit fees
Other professional fees
Other charges
net income
Distributions from associate
Distributions from joint venture
Share of results of associate
– operations
– revaluation surplus/(deficit)
Share of results of joint venture
– operations
Surplus on revaluation of investment properties
Unrealised gain/(loss) from fair valuation of derivatives
Impairment loss on investment in associate
total return before tax
Taxation
total return for the year
earnings per Unit (cents)
Basic
Diluted
note
18
19
20
21
3
7
22
23
Group
2017
$’000
2016
$’000
trust
2017
$’000
2016
$’000
181,595
(52,037)
129,558
183,816
(53,964)
129,852
181,595
(52,037)
129,558
183,816
(53,964)
129,852
(17,633)
(14,495)
(89)
(414)
(103)
(1,388)
(606)
94,830
–
–
3,577
243
571
94,399
284
–
193,904
–
193,904
(17,187)
(14,209)
(127)
(403)
(104)
(417)
(592)
96,813
–
–
3,679
(4,095)
538
28,407
(1,896)
–
123,446
(17,633)
(14,495)
(89)
(414)
(103)
(1,388)
(609)
94,827
4,173
563
–
–
–
94,399
284
(6,013)
188,233
(17,187)
(14,209)
(127)
(403)
(104)
(417)
(594)
96,811
3,926
458
–
–
–
28,407
(1,896)
–
127,706
–
123,446
–
188,233
–
127,706
21.04
20.96
13.44
13.44
20.43
20.34
13.91
13.91
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
FRAsERs CENTREPOiNT TRUsT
125
DIStrIBUtIon StateMentS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2017
Income available for distribution to Unitholders
at beginning of year
Net income
Net tax adjustments (Note A)
Distributions from associate
Distributions from joint venture
Income available for distribution to Unitholders
Distributions to Unitholders:
Distribution of 2.859 cents per Unit for period
from 1/7/2015 to 30/9/2015
Distribution of 2.870 cents per Unit for period
from 1/10/2015 to 31/12/2015
Distribution of 3.039 cents per Unit for period
from 1/1/2016 to 31/3/2016
Distribution of 3.040 cents per Unit for period
from 1/4/2016 to 30/6/2016
Distribution of 2.815 cents per Unit for period
from 1/7/2016 to 30/9/2016
Distribution of 2.890 cents per Unit for period
from 1/10/2016 to 31/12/2016
Distribution of 3.040 cents per Unit for period
from 1/1/2017 to 31/3/2017
Distribution of 3.000 cents per Unit for period
from 1/4/2017 to 30/6/2017
Group
2017
$’000
2016
$’000
trust
2017
$’000
2016
$’000
26,015
94,830
11,049
4,173
563
110,615
136,630
26,334
96,813
6,904
3,926
458
108,101
134,435
26,012
94,827
11,052
4,173
563
110,615
136,627
26,331
96,811
6,906
3,926
458
108,101
134,432
–
–
–
–
25,904
26,621
28,022
26,223
26,335
27,913
27,949
–
–
–
–
–
–
–
25,904
26,621
28,022
26,223
26,335
27,913
27,949
–
–
–
27,673
108,220
–
108,420
27,673
108,220
–
108,420
Income available for distribution to
Unitholders at end of year
28,410
26,015
28,407
26,012
Distribution per unit (cents) *
11.900
11.764
11.900
11.764
Note A – Net tax adjustments relate to the following items:
– Asset management fees paid/payable in Units
– Trustee’s fees
– Amortisation of loan arrangement fees
– Amortisation of lease incentives
– Deferred income and amortisation of rental deposits
– Other items
Net tax adjustments
10,147
414
781
(2,056)
36
1,727
11,049
6,021
403
888
(537)
11
118
6,904
10,147
414
781
(2,056)
36
1,730
11,052
6,021
403
888
(537)
11
120
6,906
*
The Distribution per unit relates to the distributions in respect of the relevant financial year. The distribution relating to the last quarter of 2017 will
be paid after 30 September 2017.
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
126 ANNUAL REPORT 2017
StateMentS oF MoveMentS In UnItHoLDerS’ FUnDS
anD tranSLatIon reServe
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2017
Group
2017
$’000
2016
$’000
trust
2017
$’000
2016
$’000
Net assets at beginning of year
1,775,645
1,754,544
1,779,636
1,755,393
operations
Total return for the year
193,904
123,446
188,233
127,706
Unitholders’ transactions
Creation of Units
– issued/issuable as satisfaction of asset management fees
– issued as satisfaction of acquisition fees
Distributions to Unitholders
Net decrease in net assets resulting from
Unitholders’ transactions
11,913
378
(108,220)
(95,929)
4,957
–
(108,420)
(103,463)
11,913
378
(108,220)
(95,929)
4,957
–
(108,420)
(103,463)
Movement in translation reserve (Note 15)
(1,417)
1,118
–
–
net assets at end of year
1,872,203
1,775,645
1,871,940
1,779,636
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
FRAsERs CENTREPOiNT TRUsT
127
portFoLIo StateMentS
AS AT 30 SEPTEMBER 2017
GroUp
Description
of property
term of
Lease
Location
existing
Use
Investment properties in Singapore
occupancy
rate as at
30 September
2017
%
at valuation
2017
$’000
2016
$’000
percentage of
total assets
2016
%
2017
%
Causeway
Point
Northpoint City
North Wing
99-year
leasehold
from
30 October
1995
99-year
leasehold
from
1 April
1990
Anchorpoint
Freehold
YewTee Point
Bedok Point
Changi City
Point
Yishun 10
Retail Podium
99-year
leasehold
from
3 January
2006
99-year
leasehold
from
15 March
1978
60-year
leasehold
from
30 April
2009
99-year
leasehold
from
1 April
1990
1 Woodlands
Square
930 Yishun
Avenue 2
368 & 370
Alexandra
Road
21 Choa Chu
Kang North 6
799 New
Upper Changi
Road
5 Changi
Business Park
Central 1
51 Yishun
Central 1
Investment properties, at valuation
Investment in associate (Note 7)
Other assets
Total assets attributable to Unitholders
Commercial
99.5
1,190,000
1,143,000
43.3
44.1
Commercial
81.2
733,000
672,000
26.6
25.9
Commercial
96.2
104,600
103,000
3.8
4.0
Commercial
95.7
178,000
172,000
6.5
6.6
Commercial
85.2
105,000
108,000
3.8
4.1
Commercial
88.5
318,000
311,000
11.6
12.0
Commercial
90.8
39,500
–
1.4
–
2,668,100
2,509,000
64,608
2,732,708
59,600
2,568,600
97.0
2.3
99.3
96.7
2.3
99.0
18,157
2,750,865
25,877
2,594,477
0.7
100.0
1.0
100.0
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
128 ANNUAL REPORT 2017
portFoLIo StateMentS
AS AT 30 SEPTEMBER 2017
trUSt
Description
of property
term of
Lease
Location
existing
Use
occupancy
rate as at
30 September
2017
%
at valuation
2017
$’000
2016
$’000
percentage of
total assets
2016
%
2017
%
Investment properties in Singapore
Causeway
Point
Northpoint City
North Wing
99-year
leasehold
from
30 October
1995
99-year
leasehold
from
1 April
1990
Anchorpoint
Freehold
YewTee Point
Bedok Point
99-year
leasehold
from
3 January
2006
99-year
leasehold
from
15 March
1978
1 Woodlands
Square
930 Yishun
Avenue 2
368 & 370
Alexandra
Road
21 Choa Chu
Kang North 6
799 New
Upper Changi
Road
Changi City
Point
60-year
leasehold
from
30 April 2009
5 Changi
Business Park
Central 1
Yishun 10
Retail Podium
51 Yishun
Central 1
99-year
leasehold
from
1 April
1990
Investment properties, at valuation
Investment in associate (Note 7)
Other assets
Total assets attributable to Unitholders
Commercial
99.5
1,190,000
1,143,000
43.3
44.0
Commercial
81.2
733,000
672,000
26.6
25.9
Commercial
96.2
104,600
103,000
3.8
4.0
Commercial
95.7
178,000
172,000
6.5
6.6
Commercial
85.2
105,000
108,000
3.8
4.1
Commercial
88.5
318,000
311,000
11.6
12.0
Commercial
90.8
39,500
–
1.4
–
2,668,100
2,509,000
64,608
2,732,708
63,843
2,572,843
97.0
2.3
99.3
96.6
2.4
99.0
17,915
2,750,623
25,643
2,598,486
0.7
100.0
1.0
100.0
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
FRAsERs CENTREPOiNT TRUsT
129
portFoLIo StateMentS
AS AT 30 SEPTEMBER 2017
On 30 September 2017, independent valuations of the investment properties were undertaken by Knight Frank Pte Ltd
(“Knight Frank”), Savills Valuation and Professional Services (S) Pte Ltd (“Savills”), and Colliers International Consultancy
& Valuation (Singapore) Pte Ltd (“Colliers”). The Manager believes that these independent valuers possess appropriate
professional qualifications and recent experience in the location and category of the investment properties being
valued. The valuations were performed based on the following methods:
Description
of property
valuer
valuation Method
Causeway Point
Knight Frank
(2016: Edmund Tie)
Northpoint City
North Wing
Savills
(2016: Knight Frank)
Anchorpoint
Savills
(2016: Savills)
YewTee Point
Savills
(2016: Savills)
Bedok Point
Savills
(2016: Savills)
Changi City Point Colliers
(2016: Colliers)
Capitalisation approach and discounted cash
flow analysis (2016: Capitalisation approach
and discounted cash flow analysis)
Capitalisation approach, discounted cash flow
analysis and direct comparison method (2016:
Capitalisation approach and discounted cash
flow analysis)
Capitalisation approach, discounted cash flow
analysis and direct comparison method (2016:
Capitalisation approach, discounted cash flow
analysis and direct comparison method)
Capitalisation approach, discounted cash flow
analysis and direct comparison method (2016:
Capitalisation approach, discounted cash flow
analysis and direct comparison method)
Capitalisation approach, discounted cash flow
analysis and direct comparison method (2016:
Capitalisation approach, discounted cash flow
analysis and direct comparison method)
Capitalisation approach, discounted cash flow
analysis and direct comparison method (2016:
Capitalisation approach and discounted cash
flow analysis)
valuation
2017
$’000
2016
$’000
1,190,000
1,143,000
733,000
672,000
104,600
103,000
178,000
172,000
105,000
108,000
318,000
311,000
Yishun 10 Retail
Podium
Colliers
(2016: Not Applicable)
Capitalisation approach, discounted cash flow
analysis and direct comparison method (2016:
Not Applicable)
39,500
–
On 16 November 2016, the Group completed the acquisition of 10 strata-titled retail units at Yishun 10 for an aggregate
purchase consideration of $39.33 million from third party vendor.
The net changes in fair values of these investment properties have been recognised in the Statements of Total Return
in accordance with the Group’s accounting policies.
The investment properties are leased to third party tenants. Generally, these leases contain an initial non-cancellable period
of three years. Subsequent renewals are negotiated with individual lessees. Contingent rent, which comprises gross turnover
rent, recognised in the Statements of Total Return of the Group and the Trust amounted to $8,694,000 (2016: $9,141,000).
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
130 ANNUAL REPORT 2017
CaSH FLoW StateMentS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2017
operating activities
Total return before tax
Adjustments for:
Allowance for doubtful receivables
Write back of allowance for doubtful receivables
Borrowing costs
Asset management fees paid/payable in Units
Depreciation of fixed assets
Amortisation of intangible assets
Share of associate’s results (including revaluation surplus/deficit)
Share of joint venture’s results
Surplus on revaluation of investment properties
Unrealised (gain)/loss from fair valuation of derivatives
Amortisation of lease incentives
Deferred income recognised
Written off of fixed assets
operating income before working capital changes
Changes in working capital:
Trade and other receivables
Trade and other payables
Cash flows generated from operating activities
Investing activities
Distributions received from associate
Distributions received from joint venture
Acquisition of investment properties
Capital expenditure on investment properties
Acquisition of fixed assets
Investment in associate
Cash flows used in investing activities
Financing activities
Proceeds from borrowings
Repayment of borrowings
Borrowing costs paid
Distributions to Unitholders
Payment of transaction costs
Cash flows used in financing activities
net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year (note 10)
Significant non-Cash transactions
Group
2017
$’000
2016
$’000
193,904
123,446
118
(96)
17,633
10,147
29
18
(3,820)
(571)
(94,399)
(284)
(2,056)
(427)
1
120,197
1,862
143
122,202
4,173
563
(38,377)
(27,761)
(24)
(6,778)
(68,204)
278,000
(214,000)
(14,357)
(108,220)
(582)
(59,159)
(5,161)
18,708
13,547
38
(36)
17,187
6,021
41
18
416
(538)
(28,407)
1,896
(537)
(732)
–
118,813
(594)
7,768
125,987
3,926
458
–
(17,540)
(23)
–
(13,179)
315,500
(299,500)
(16,182)
(108,420)
(1,695)
(110,297)
2,511
16,197
18,708
During the financial years, 4,874,255 (2016: 2,986,994) Units were issued and issuable in satisfaction of asset management
fees payable in Units, amounting to a value of $10,146,554 (2016: $6,021,088) in respect of the financial year.
189,631 units were issued in November 2016 in satisfaction of acquisition fees of $377,500 in connection with the
acquisition of 10 strata-titled retail units at Yishun 10 completed on 16 November 2016.
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
FRAsERs CENTREPOiNT TRUsT
131
noteS to tHe FInanCIaL StateMentS
30 SEPTEMBER 2017
The following notes form an integral part of the financial statements.
1.
GeneraL
Frasers Centrepoint Trust (the “Trust”) is a Singapore-domiciled unit trust constituted pursuant to a trust deed
dated 5 June 2006, and any amendment or modification thereof (the “Trust Deed”), between Frasers Centrepoint
Asset Management Ltd. (the “Manager”) and HSBC Institutional Trust Services (Singapore) Limited (the “Trustee”).
The Trust Deed is governed by the laws of the Republic of Singapore. The Trustee is under a duty to take into
custody and hold the assets of the Trust and its subsidiary (collectively, the “Group”) in trust for the holders
(“Unitholders”) of units in the Trust (the “Units”). The address of the Trustee’s registered office is 21 Collyer Quay
#13-02 HSBC Building Singapore 049320.
The Trust was formally admitted to the Official List of the Singapore Exchange Securities Trading Limited (“SGX-ST”)
on 5 July 2006 and was included in the Central Provident Fund Investment Scheme (“CPFIS”) on 5 July 2006.
The principal activity of the Trust is to invest in income-producing properties used primarily for retail purposes,
in Singapore and overseas, with the primary objective of delivering regular and stable distributions to Unitholders
and to achieve long-term capital growth. The principal activity of the subsidiary is set out in Note 6.
The financial statements were authorised for issue by the Manager and the Trustee on 15 November 2017.
The Trust has entered into several service agreements in relation to management of the Trust and its property
operations. The fee structures of these services are as follows:
1.1
property management fees
Under the property management agreements, fees are charged as follows:
(i)
2.0% per annum of the gross revenue of the properties;
(ii)
(iii)
2.0% per annum of the net property income of the properties (calculated before accounting for the
property management fees); and
0.5% per annum of the net property income of the properties (calculated before accounting for the
property management fees), in lieu of leasing commissions.
The property management fees are payable monthly in arrears.
1.2
asset management fees
Pursuant to the Trust Deed, asset management fees comprise the following:
(i)
(ii)
a base fee equal to a rate of 0.3% per annum of the value of Deposited Property (being all assets, as
stipulated in the Trust Deed) of the Trust; and
an annual performance fee equal to a rate of 5.0% per annum of the Net Property Income (as defined
in the Trust Deed) of the Trust and any Special Purpose Vehicles (as defined in the Trust Deed) for each
financial year.
Any increase in the rate or any change in the structure of the asset management fees must be approved by an
Extraordinary Resolution of Unitholders passed at a Unitholders’ meeting duly convened and held in accordance
with the provisions of the Trust Deed.
132 ANNUAL REPORT 2017
noteS to tHe FInanCIaL StateMentS
30 SEPTEMBER 2017
1.
GeneraL (Cont’D)
1.2
asset management fees (cont’d)
The Manager may elect to receive the fees in cash or Units or a combination of cash and Units (as it may in
its sole discretion determine). For the year ended 30 September 2017, the Manager has opted to receive 70%
(2016: 20% - 50%) of the asset management fees in the form of Units with the balance in cash. With effect from
1 October 2016, the portion of the base management is payable on a quarterly basis in arrears and the portion
of the performance management fees is payable on an annually basis in arrears.
The Manager is also entitled to receive acquisition fee at the rate of 1% of the acquisition price and a divestment
fee of 0.5% of the sale price on all future acquisitions or disposals of properties or investments.
1.3
trustee’s fees
Pursuant to the Trust Deed, the Trustee’s fees shall not exceed 0.1% per annum of the value of Deposited
Property of the Trust, subject to a minimum of $9,000 per month, excluding out-of-pocket expenses and GST.
Any increase in the maximum permitted or any change in the structure of the Trustee’s fee must be approved
by an Extraordinary Resolution of Unitholders passed at a Unitholders’ meeting duly convened and held in
accordance with the provisions of the Trust Deed.
The Trustee’s fees are payable monthly in arrears.
2.
SUMMarY oF SIGnIFICant aCCoUntInG poLICIeS
2.1
Basis of preparation
The financial statements have been prepared in accordance with the recommendations of Statement of
Recommended Accounting Practice (“RAP”) 7 Reporting Framework for Unit Trusts issued by the Institute of
Singapore Chartered Accountants (“ISCA”), the applicable requirements of the Code on Collective Investment
Schemes (the “CIS Code”) issued by the Monetary Authority of Singapore (“MAS”) and the provisions of the Trust
Deed. RAP 7 requires the accounting policies to generally comply with the principles relating to recognition and
measurement under the Financial Reporting Standards in Singapore (“FRS”).
The financial statements, which are presented in Singapore dollars and rounded to the nearest thousand,
unless otherwise stated, have been prepared on the historical cost basis except as disclosed in the accounting
policies below.
The preparation of the financial statements in conformity with RAP 7 requires the Manager to make judgements,
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets,
liabilities, income and expenses. The estimates and associated assumptions are based on historical experience
and relevant factors, including expectations of future events that are believed to be reasonable under the
circumstances. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Financial impact arising from
revisions to accounting estimates are recognised in the period in which the estimates are revised and in any
future periods affected.
FRAsERs CENTREPOiNT TRUsT
133
noteS to tHe FInanCIaL StateMentS
30 SEPTEMBER 2017
2.
SUMMarY oF SIGnIFICant aCCoUntInG poLICIeS (Cont’D)
2.1
Basis of preparation (cont’d)
Information about critical judgements in applying accounting policies that have the most significant effect on
the amounts recognised in the financial statements is included in the following note:
(i)
Note 7 – Accounting for investment in associate.
Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material
adjustment within the next financial year are included in the following notes:
(i)
Note 3 – Valuation of investment properties; and
(ii)
Note 12 – Valuation of interest rate swaps.
2.2 new standards and interpretations not adopted
A number of new standards and amendments to standards are effective for annual periods beginning after
1 October 2016, and have not been applied in preparing these financial statements. For those new standards
and amendments to standards that are expected to have an effect on the financial statements of the Group and
the Trust in future financial periods, the Group will assess the transition options and the potential impact on its
financial statements, and to implement these standards. The Group does not plan to adopt these standards early.
applicable to financial statements for the year ended 30 September 2017
Revision to RAP 7
RAP 7 was revised in June 2016 and March 2017 to take into account, amongst others, the changes made to
FRS 32 Financial Instruments: Presentation and FRS 107 Financial Instruments: Disclosures in relation to the
offsetting of financial assets and liabilities; and new standards issued after 2012 including FRS 110 Consolidated
Financial Statements, FRS 112 Disclosure of Interest in Other Entities and FRS 113 Fair Value Measurement. RAP
7 (Revised June 2016) is applicable to unit trusts with annual periods beginning on or after 1 July 2016. The
additional disclosure required by the Revised RAP 7 that is relevant to the Group has been adopted by the Group.
applicable to financial statements for the year ending 30 September 2019
(i)
FRS 115 Revenue from Contracts with Customers
FRS 115 establishes a comprehensive framework for determining whether, how much and when revenue
is recognised. It also introduces new cost guidance which requires certain costs of obtaining and fulfilling
contracts to be recognised as separate assets when specified criteria are met.
When effective, FRS 115 replaces existing revenue recognition guidance, including FRS 18 Revenue,
FRS 11 Construction Contracts, INT FRS 113 Customer Loyalty Programmes, INT FRS 115 Agreements
for the Construction of Real Estate, INT FRS 118 Transfers of Assets from Customers and INT FRS 31
Revenue – Barter Transactions Involving Advertising Services.
FRS 115 is effective for annual periods beginning on or after 1 January 2018, with early adoption permitted.
FRS 115 offers a range of transition options including full retrospective adoption where an entity can
choose to apply the standard to its historical transactions and retrospectively adjust each comparative
period presented in its financial statements for the year ending 30 September 2019. When applying the
full retrospective method, an entity may also elect to use a series of practical expedients to ease transition.
134 ANNUAL REPORT 2017
noteS to tHe FInanCIaL StateMentS
30 SEPTEMBER 2017
2.
SUMMarY oF SIGnIFICant aCCoUntInG poLICIeS (Cont’D)
2.2 new standards and interpretations not adopted (cont’d)
(i)
FRS 115 Revenue from Contracts with Customers (cont’d)
Potential impact on the financial statements
During the financial year, the Group completed its initial assessment of the impact on the Group’s
financial statements. Based on its initial assessment, the Group does not expect the impact on the
financial statements from the adoption of this standard to be significant.
The Group plans to adopt the standard when it becomes effective for the Group on 1 October 2018 using
the full retrospective approach.
(ii)
FRS 109 Financial instruments
FRS 109 replaces most of the existing guidance in FRS 39 Financial Instruments: Recognition and
Measurement. It includes revised guidance on the classification and measurement of financial instruments,
a new expected credit loss model for calculating impairment on financial assets, and new general hedge
accounting requirements. It also carries forward the guidance on recognition and derecognition of
financial instruments from FRS 39.
Retrospective application is generally required. Restatement of comparative information is not mandatory.
If comparative information is not restated, the cumulative effect is recorded in opening equity as at
1 October 2018.
Potential impact on the financial statements
The Group does not expect a significant change to the measurement basis arising from the new
classification and measurement model under FRS 109.
Loans and receivables currently accounted for at amortised cost will continue to be accounted for using
amortised cost model under FRS 109.
For financial assets and liabilities currently held at fair value, the Group expects to continue measuring
these assets and liabilities at fair value under FRS 109.
The Group is evaluating the approach to adopt in respect of recording expected impairment losses on
trade receivables, which involves the Group reviewing its impairment loss estimation methodology to
quantify the impact on the financial statements. Based on preliminary assessment, the Group does not
expect a significant increase to the impairment allowance.
FRAsERs CENTREPOiNT TRUsT
135
noteS to tHe FInanCIaL StateMentS
30 SEPTEMBER 2017
2.
SUMMarY oF SIGnIFICant aCCoUntInG poLICIeS (Cont’D)
2.2 new standards and interpretations not adopted (cont’d)
The Group plans to adopt the standard when it becomes effective for the Group as at 1 October 2018 without
restating comparative information.
applicable to financial statements for the year ending 30 September 2020
(i)
FRS 116 Leases
FRS 116 eliminates the lessee’s classification of leases as either operating leases or finance leases and
introduces a single lessee accounting model. Applying the new model, a lessee is required to recognise
right-of-use (“ROU”) assets and lease liabilities for all leases with a term of more than 12 months, unless
the underlying asset is of low value.
FRS 116 substantially carries forward the lessor accounting requirements in FRS 17 Leases. Accordingly,
a lessor continues to classify its leases as operating leases or finance leases, and to account for these
two types of leases using the FRS 17 operating lease and finance lease accounting models respectively.
However, FRS 116 requires more extensive disclosures to be provided by a lessor.
When effective, FRS 116 replaces existing lease accounting guidance, including FRS 17, INT FRS 104
Determining whether an Arrangement contains a Lease; INT FRS 15 Operating Leases – incentives; and
INT FRS 27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease.
Potential impact on the financial statements
The Group does not expect the impact on the financial statements to be significant.
The Group plans to adopt the standard when it becomes effective for the Group as at 1 October 2019.
The Group will perform a detailed analysis of the standard, including the transition options and practical
expedients in the coming financial year.
2.3
Foreign currency
Transactions in foreign currencies are measured and recorded on initial recognition in Singapore dollars, the
functional currency of the Trust and subsidiary, at exchange rates approximating those ruling at the transaction
dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange
ruling at the balance sheet date. Non-monetary items that are measured in terms of historical cost in a foreign
currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items
measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value
was determined.
Exchange differences arising on the settlement of monetary items or on translating monetary items at the
balance sheet date are recognised in the Statements of Total Return except for exchange differences arising
on monetary items that form part of the Group’s net investment in foreign operations, which are recognised
initially in equity as translation reserve in the Balance Sheets and recognised in the Statements of Total Return
on disposal of the foreign operation.
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2.3
Foreign currency (cont’d)
For consolidation purposes, the assets and liabilities of foreign operations are translated into Singapore dollars at
the rate of exchange ruling at the balance sheet date and their profit or loss are translated at the exchange rates
prevailing at the date of the transactions. The exchange differences arising on translation are taken directly to a
separate component of equity as translation reserve. On disposal of a foreign operation, the cumulative amount
recognised in translation reserve relating to that particular foreign operation is recognised in the Statements of
Total Return.
When associates that are foreign operations are partially disposed, the proportionate share of the accumulated
exchange differences is reclassified to the Statements of Total Return.
2.4
Investment properties
Investment properties are stated at initial cost on acquisition, including transaction costs, and at valuation
thereafter. Valuation is determined in accordance with the Trust Deed, which requires the investment properties
to be valued by independent registered valuers.
•
•
In such manner and frequency required under the CIS Code issued by the MAS; and
At least once in each period of 12 months following the acquisition of each parcel of real estate property.
Any increase or decrease on revaluation is credited or charged to the Statements of Total Return as a net
revaluation surplus or deficit in the value of the investment properties.
Subsequent expenditure relating to investment properties that have already been recognised is added to the
carrying amount of the asset when it is probable that future economic benefits, in excess of originally assessed
standard of performance of the existing asset, will flow to the Group and the Trust. All other subsequent
expenditure is recognised as an expense in the period in which it is incurred.
Investment properties are derecognised when either they have been disposed of or when the investment
property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any
gains or losses on the retirement or disposal of an investment property are recognised in the Statements of Total
Return in the year of retirement or disposal.
Investment properties are not depreciated. Investment properties are subject to continual maintenance and
regularly revalued on the basis set out above. For taxation purposes, the Group and the Trust may claim capital
allowances on assets that qualify as plant and machinery under the Singapore Income Tax Act.
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2.5
Basis of consolidation and investment in subsidiary
A subsidiary is an entity controlled by the Group. The Group controls an entity when it is exposed to, or has rights
to, variable returns from its involvement with the entity and has the ability to affect those returns through its power
over the entity. The financial statements of a subsidiary are included in the consolidated financial statements
from the date that control commences until the date that control ceases. All intra-group balances, income and
expenses and unrealised gains and losses resulting from intra-group transactions are eliminated in full.
In the Trust’s balance sheet, investment in subsidiary is accounted for at cost less any accumulated
impairment losses.
The consolidated financial statements incorporate the financial statements of the Trust and its subsidiary as of the
balance sheet date. The financial statements of the subsidiary used in the preparation of the consolidated financial
statements are prepared for the same reporting date and using consistent accounting policies as the Trust.
Business combinations are accounted for by applying the acquisition method. Identifiable assets acquired and
liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.
Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred and the
services are received.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic circumstances and pertinent
conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by
the acquiree.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition
date. Subsequent changes to the fair value of the contingent consideration, if deemed to be an asset or liability
within the scope of FRS 39, will be recognised in the Statements of Total Return. If the contingent consideration
is classified as equity, it is not remeasured until it is finally settled within equity.
In business combinations achieved in stages, previously held equity interests in the acquiree are remeasured to fair
value at the acquisition date and any corresponding gain or loss is recognised in the Statements of Total Return.
The Group elects for each individual business combination whether non-controlling interest in the acquiree
(if any), that are present ownership interests and entitle their holders to a proportionate share of net assets in
the event of liquidation, is recognised on the acquisition date at fair value, or at the non-controlling interest’s
proportionate share of the acquiree’s identifiable net assets. Other components of non-controlling interests
are measured at their acquisition date fair value, unless another measurement basis is required by another FRS.
Any excess of the sum of the fair value of the consideration transferred in the business combination, the amount
of non-controlling interest in the acquiree (if any), and the fair value of the Group’s previously held equity interest
in the acquiree (if any), over the net fair value of the acquiree’s identifiable assets and liabilities is recorded as
goodwill. In instances where the latter amount exceeds the former, the excess is recognised as gain on bargain
purchase in the Statements of Total Return on the acquisition date.
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2.6
Investment in associate and joint venture
An associate is an entity over which the Group has significant influence over the financial and operating policy
decisions of the investee but does not have control or joint control of those policies. Significant influence is
presumed to exist when the Group has 20% or more of the voting power of another entity.
A joint venture is an arrangement in which the Group has joint control, whereby the Group has rights to the net
assets of the arrangement, rather than rights to its assets and obligations for its liabilities.
The Group accounts for its investments in associates and joint ventures using the equity method from the date
on which it becomes an associate or joint venture.
On acquisition of the investment, any excess of the cost of the investment over the Group’s share of the net fair
value of the investee’s identifiable assets and liabilities is accounted as goodwill and is included in the carrying
amount of the investment. Any excess of the Group’s share of the net fair value of the investee’s identifiable
assets and liabilities over the cost of the investment is included as income in the determination of the entity’s
share of the associate or joint venture’s profit or loss in the period in which the investment is acquired.
Under the equity method, the investment in associates or joint ventures are carried in the balance sheets at cost
plus post-acquisition changes in the Group’s share of net assets of the associates or joint ventures. The profit or loss
reflects the share of results of the operations of the associates or joint ventures. Distributions received from joint
ventures or associates reduce the carrying amount of the investment. Where there has been a change recognised
in other comprehensive income by the associates or joint venture, the Group recognises its share of such changes
in other comprehensive income. Unrealised gains and losses resulting from transactions between the Group and
associate or joint venture are eliminated to the extent of the interest in the associates or joint ventures.
When the Group’s share of losses in an associate or joint venture equals or exceeds its interest in the associate or
joint venture, the Group does not recognise further losses, unless it has incurred obligations or made payments
on behalf of the associate or joint venture.
After application of the equity method, the Group determines whether it is necessary to recognise an additional
impairment loss on the Group’s investment in associate or joint ventures. The Group determines at the end
of each reporting period whether there is any objective evidence that the investment in the associate or joint
venture is impaired. If this is the case, the Group calculates the amount of impairment as the difference between
the recoverable amount of the associate or joint venture and its carrying value and recognises the amount in
the Statements of Total Return.
The financial statements of the associates and joint ventures are prepared as the same reporting date as the
Company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.
In the Trust’s separate financial statements, interests in joint ventures and associates are carried at cost less
accumulated impairment losses.
A list of the associate and joint venture is shown in Notes 7 and 8, respectively.
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2.7
Fixed assets
Fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses. The cost of an
asset comprises its purchase price and any directly attributable costs of bringing the asset to working condition
for its intended use. The cost of a fixed asset is recognised as an asset if, and only if, it is probable that future
economic benefits associated with the asset will flow to the Group and the cost of the asset can be measured
reliably. Expenditure for additions, improvements and renewals are capitalised and expenditure for maintenance
and repair are charged to the Statements of Total Return. When assets are derecognised upon disposal or when
no future economic benefits are expected from their use or disposal, their cost and accumulated depreciation
are removed from the financial statements and any gain or loss on derecognition of the assets is included in the
Statements of Total Return.
Fixed assets are depreciated on the straight line method so as to write off the cost of the fixed assets over their
estimated useful lives of 5 years to 10 years.
The carrying values of fixed assets are reviewed for impairment when events or changes in circumstances
indicate that the carrying value may not be recoverable.
The residual value, useful life and depreciation method are reviewed at each financial year-end, and adjusted
prospectively, if appropriate.
2.8
Intangible assets
Software is initially recognised at cost and subsequently carried at cost less accumulated amortisation.
Software is amortised over the estimated useful life of 5 years and assessed for impairment whenever there is an
indication that the intangible asset may be impaired.
Changes in the expected useful life or the expected pattern of consumption of future economic benefits
embodies in the asset is accounted for by changing the amortisation period or method, as appropriate, and are
treated as changes in accounting estimates. The amortisation expense on intangible assets with finite useful
lives is recognised in the Statements of Total Return in the expense category consistent with the function of the
intangible asset.
Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the
net disposal proceeds and the carrying amount of the asset and are recognised in the Statements of Total Return
when the asset is derecognised.
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2.9
Financial assets
The Group determines the classification of its financial assets at initial recognition. When financial assets are
recognised initially, they are measured at fair value, plus, in the case of financial assets not at fair value through
profit or loss, directly attributable transaction costs.
Non-derivative financial assets with fixed or determinable payments that are not quoted in an active market
are classified as loans and receivables. Subsequent to initial recognition, loans and receivables are carried at
amortised cost using the effective interest method, less any impairment losses. Gains or losses are recognised in
the Statements of Total Return when the loans and receivables are derecognised or impaired, as well as through
the amortisation process.
Financial assets at fair value through profit or loss include financial assets held for trading and financial assets
designated upon initial recognition at fair value through profit or loss. Financial assets classified as held for
trading include derivative financial instruments entered into by the Group that are not designated as hedging
instruments in hedge relationships as defined by FRS 39. Derivatives, including separated embedded derivatives,
are also classified as held for trading unless they are designated as effective hedging instruments.
Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value.
Any gains or losses arising from changes in fair value of the financial assets are recognised in the Statements of
Total Return.
Financial assets are recognised on the Balance Sheets when, and only when, the Group becomes a party to
the contractual provisions of the instruments. Financial assets are derecognised when the contractual rights to
receive cash flows from the assets have expired. On derecognition, the difference between the carrying amount
and the consideration received is recognised in the Statements of Total Return.
Financial assets and liabilities are offset and the net amount presented in the Balance Sheets when, and only
when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise
the asset and settle the liability simultaneously.
All regular way purchases and sales of financial assets are recognised or derecognised on the trade date (i.e., the
date that the Group commits to purchase or sell the asset). Regular way purchases or sales are purchases or sales
of financial assets that require delivery of assets within the period generally established by regulation or convention
in the marketplace concerned.
2.10 Cash and cash equivalents
Cash and cash equivalents comprise cash balances and bank deposits.
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2.11 Financial liabilities
Financial liabilities are recognised on the Balance Sheets when, and only when, the Group becomes a party to
the contractual provisions of the financial instrument. The Group determines the classification of its financial
liabilities at initial recognition. Financial liabilities are initially recognised at the fair value of consideration received,
and in the case of financial liabilities other than those designated at fair value through profit or loss, less directly
attributable transaction costs.
Financial liabilities that are designated at fair value through profit or loss include financial liabilities held for
trading. Financial liabilities are classified as held for trading if they are acquired for the purpose of selling in the
near term. This category includes derivative financial instruments such as interest rate swaps entered into by the
Group to hedge its risks associated with interest rate fluctuations.
Subsequent to initial recognition, financial liabilities at fair value through profit or loss are measured at fair value.
Any gains or losses arising from changes in fair value of the financial liabilities are recognised in the Statements
of Total Return.
After initial recognition, financial liabilities that are not carried at fair value through profit or loss are subsequently
measured at amortised cost using the effective interest rate method. Gains and losses are recognised in the
Statements of Total Return when the liabilities are derecognised and through the amortisation process.
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or has expired.
2.12 provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and the amount of the obligation can be estimated reliably.
Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate.
If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the
provision is reversed. If the effect of the time value of money is material, provisions are discounted using a
current pre-tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used,
the increase in the provision due to the passage of time is recognised as finance cost.
2.13
Impairment
(i)
Impairment of non-financial assets
The Group assesses at each reporting date whether there is any indication that an asset may be impaired.
If any such indication exists, or when annual impairment testing for an asset is required, the Group makes
an estimate of the asset’s recoverable amount.
An impairment loss is recognised in the Statements of Total Return whenever the carrying amount of an
asset or its cash-generating unit exceeds its recoverable amount.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair
value less costs to sell and is determined for an individual asset, unless the asset does not generate cash
inflows that are largely independent of those from other assets or group of assets. In assessing value in
use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the asset.
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2.13
Impairment (cont’d)
(i)
Impairment of non-financial assets (cont’d)
Impairment losses recognised in prior periods are assessed at each reporting date for any indication that
the loss has decreased or no longer exists. If such indication exists, the recoverable amount is estimated.
An impairment loss is reversed only if there has been a change in the estimates used to determine the
asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying
amount of the asset is increased to its recoverable amount. An impairment loss is reversed only to the
extent that the asset’s carrying amount does not exceed the carrying amount that would have been
determined, net of depreciation, had no impairment loss been recognised for the asset in prior years.
Reversal of an impairment loss is recognised in the Statements of Total Return. After such a reversal, the
depreciation charge, if any, is adjusted in future periods to allocate the asset’s revised carrying amount,
less any residual value, on a systematic basis over its remaining useful life.
(ii)
Impairment of financial assets
The Group assesses at each reporting date whether there is any objective evidence that a financial asset
is impaired.
For financial assets carried at amortised cost, the Group first assesses individually whether objective
evidence of impairment exists individually for financial assets that are individually significant, or collectively
for financial assets that are not individually significant. If the Group determines that no objective evidence
of impairment exists for an individually assessed financial asset, whether significant or not, it includes the
asset in a group of financial assets with similar credit risk characteristics and collectively assesses them
for impairment. Assets that are individually assessed for impairment and for which an impairment loss is
or continues to be recognised are not included in a collective assessment of impairment.
If there is objective evidence that an impairment loss on financial assets carried at amortised cost has
been incurred, the amount of impairment loss is calculated as the difference between its carrying amount,
and the present value of estimated future cash flows discounted at the financial asset’s original effective
interest rate (i.e., the effective interest rate computed at initial recognition). The carrying amount of the
asset is reduced through the use of an allowance account. The amount of the loss and any subsequent
write-back is recognised in the Statements of Total Return.
When the asset becomes uncollectible, the carrying amount of impaired financial assets is reduced
directly or if an amount was charged to the allowance account, the amounts charged to the allowance
account are written off against the carrying value of the financial asset.
To determine whether there is objective evidence that an impairment loss on financial assets has incurred,
the Group considers factors such as the probability of insolvency or significant financial difficulties of the
debtor and default or significant delay in payments.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related
objectively to an event occurring after the impairment loss was recognised, the previously recognised
impairment loss is reversed. Any subsequent reversal of an impairment loss is recognised in the Statements
of Total Return to the extent that the carrying value of the asset does not exceed its amortised cost at
the reversal date.
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2.14 Security deposits and deferred income
Security deposits relate to rental deposits received from tenants at the Group’s investment properties. The
accounting policy for security deposits as a financial liability is set out in Note 2.11.
Deferred income relates to the difference between consideration received for security deposits and its fair value
at initial recognition, and is credited to the Statements of Total Return as gross rental income on a straight line
basis over individual lease term.
2.15 Leases
The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement
at inception date: whether fulfilment of the arrangement is dependent on the use of a specific asset or assets or
the arrangement conveys a right to use the asset even if that right is not explicitly specified in an arrangement.
Leases where the Group retains substantially all the risks and rewards of ownership of the asset are classified as
operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount
of the leased asset and recognised over the lease term on the same bases as rental income. The accounting
policy for rental income is set out in Note 2.16(i).
2.16 revenue recognition
Revenue is recognised to the extent it is probable that the economic benefits will flow to the Group and the
revenue can be reliably measured. Revenue is measured at the fair value of consideration received or receivable,
excluding discounts, rebates, and sales taxes or duty. The following specific recognition criteria must also be
met before revenue is recognised:
(i)
Rental income
Rental income receivable under operating leases is recognised in the Statements of Total Return on a
straight-line basis over the term of the lease, except where an alternative basis is more representative of
the pattern of benefits to be derived from the leased assets. Lease incentives granted are recognised as
an integral part of the total rental to be received. The aggregate cost of incentives provided to lessees is
recognised as a reduction of rental income over the lease term on a straight-line basis. Contingent rent,
which comprises gross turnover rental, is recognised as income in the period in which it is earned.
(ii)
Interest income
Interest income is recognised in the Statements of Total Return using the effective interest method.
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2.17 expenses
(i)
Property expenses
Property expenses are recognised on an accrual basis. Included in property expenses are property
management fees which are based on the applicable formula stipulated in Note 1.1.
(ii)
Asset management fees
Asset management fees are recognised on an accrual basis based on the applicable formula stipulated
in Note 1.2.
(iii)
Trust expenses
Trust expenses are recognised on an accrual basis. Included in trust expenses are Trustee’s fees which are
based on the applicable formula stipulated in Note 1.3.
2.18 taxation
(i)
Current income tax
Current income tax is the expected tax payable on the taxable income for the period, using tax rates and
tax laws enacted or substantively enacted at the balance sheet date.
(ii)
Deferred tax
Deferred tax is provided using the liability method on temporary differences at the balance sheet date
between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax is not recognised for temporary differences that:
–
–
arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a
business combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss; and
are associated with investments in subsidiary, associate and joint venture where the timing of
the reversal of the temporary differences can be controlled and it is probable that the temporary
differences will not reverse in the foreseeable future.
The measurement of deferred taxes reflects the tax consequences that would follow the manner in
which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets
and liabilities. For investment property that is measured at fair value, the presumption that the carrying
amount of the investment property will be recovered through sale has not been rebutted. Deferred tax
is measured at the tax rates that are expected to be applied to temporary differences when they reverse,
based on the laws that have been enacted or substantively enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax
liabilities and assets, and they relate to taxes levied by the same tax authority on the same taxable entity.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences,
to the extent that it is probable that future taxable profits will be available against which they can be
utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no
longer probable that the related tax benefit will be realised.
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2.18 taxation (cont’d)
(iii)
Tax transparency
The Inland Revenue Authority of Singapore (“IRAS”) has issued a tax ruling on the income tax treatment
of the Trust. Subject to meeting the terms and conditions of the tax ruling which includes a distribution
of at least 90% of the taxable income of the Trust, the Trustee will not be assessed to tax on the taxable
income of the Trust. Instead, the distributions made by the Trust out of such taxable income are subject
to tax in the hands of Unitholders, unless they are exempt from tax on the Trust’s distributions (the “tax
transparency ruling”). Accordingly, the Trustee and the Manager will deduct income tax at the prevailing
corporate tax rate from the distributions made to Unitholders that are made out of the taxable income
of the Trust, except:
–
–
where the beneficial owners are individuals or Qualifying Unitholders, who are not acting in the
capacity of a trustee, the Trustee and the Manager will make the distributions to such Unitholders
without deducting any income tax; and
where the beneficial owners are foreign non-individual investors or where the Units are held by
nominee Unitholders who can demonstrate that the Units are held for beneficial owners who
are foreign non-individual investors, the Trustee and the Manager will deduct/withhold tax at a
reduced rate of 10% from the distributions.
A Qualifying Unitholder is a Unitholder who is:
(i)
a tax resident Singapore-incorporated company;
(ii)
a non-corporate Singapore constituted or registered entity (e.g. town council, statutory board,
charitable organisation, management corporation, club and trade and industry association
constituted, incorporated, registered or organised in Singapore);
(iii)
a Singapore branch of a foreign company;
(iv)
(v)
(vi)
an international organisation that is exempt from tax on such distributions by reason of an order
made under the International Organisations (Immunities and Privileges) Act (Cap. 145);
an agent bank or a Supplementary Retirement Scheme (“SRS”) operator acting as nominee for
individuals who have purchased Units in the Trust within the CPFIS or the SRS respectively; or
a nominee who can demonstrate that the Units are held for beneficial owners who are individuals
or who fall within the classes of Unitholders listed in (i) to (iv) above.
The above tax transparency ruling does not apply to gains from the sale of real properties. Such gains,
when determined by the IRAS to be trading gains, are assessable to tax on the Trustee. Where the gains
are capital gains, the Trustee will not be assessed to tax and may distribute the capital gains without tax
being deducted at source.
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2.18 taxation (cont’d)
(iv)
Sales tax
Revenue, expenses and assets are recognised net of the amount of sales tax except:
–
where the sales tax incurred on a purchase of assets or services is not recoverable from the
taxation authority, in which case the sales tax is recognised as part of the cost of acquisition of the
asset or as part of the expense item as applicable; and
–
receivables and payables that are stated with the amount of sales tax included.
The net amount of sales tax recoverable from, or payable to, the IRAS is included as part of receivables
or payables on the Balance Sheets.
2.19 Borrowing costs
Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying
asset are recognised in the Statements of Total Return using the effective interest method.
2.20 Segment reporting
For management purposes, the Group is organised into operating segments based on individual investment
property within the Group’s portfolio. The Manager regularly reviews the segment results in order to allocate
resources to the segments and to assess the segments’ performance. Additional disclosures on each of
these segments are shown in Note 27, including the factors used to identify the reportable segments and the
measurement basis of segment information.
2.21 Units and unit issuance expenses
Proceeds from issuance of Units are recognised as Unitholders’ funds. Incremental costs directly attributable to
the issuance of Units are deducted against Unitholders’ funds.
2.22 earnings per unit
The Group and the Trust present basic and diluted earnings per unit data for its units. Basic earnings per unit is
calculated by dividing the total return by the weighted-average number of units outstanding during the year.
Diluted earnings per unit is determined by adjusting the total return and the weighted-average number of
ordinary units outstanding, for the effects of all dilutive potential units.
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2.
SUMMarY oF SIGnIFICant aCCoUntInG poLICIeS (Cont’D)
2.23 Contingencies
A contingent liability is:
–
A possible obligation that arises from past events and whose existence will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not wholly within the control of
the Group or the Trust; or
–
A present obligation that arises from past events but is not recognised because:
(i)
it is not probable that an outflow of resources embodying economic benefits will be required to
settle the obligation; or
(ii)
the amount of the obligation cannot be measured with sufficient reliability.
A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only
by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of
the Group or the Trust.
Contingent liabilities and assets are not recognised on the Balance Sheets, except for contingent liabilities assumed
in a business combination that are present obligations and which the fair values can be reliably determined.
3.
InveStMent propertIeS
At beginning
Acquisition of investment property
Capital expenditure
Surplus on revaluation taken to Statements of Total Return
At end
Group and trust
2017
$’000
2016
$’000
2,509,000
39,328
23,317
2,571,645
2,464,000
–
16,056
2,480,056
96,455
2,668,100
28,944
2,509,000
The investment properties owned by the Group and the Trust are set out in the Portfolio Statements on pages
128 to 130.
During the current financial year, the Trust completed the acquisition of 10 strata-titled retail units at Yishun 10
for a total consideration of $39,328,456 (including transaction costs and stamp duties of $1,200,956 directly
attributable to the acquisition and acquisition fees paid to the Manager in units of $377,500, representing 1% of
the purchase consideration paid of $37,750,000).
Bedok Point has been mortgaged as security for a $70 million secured five-year term loan from DBS Bank Ltd
(Note 14ai).
Anchorpoint has been mortgaged as security for a $80 million secured five-year term loan from DBS Bank Ltd
(Note 14aii).
YewTee Point has been mortgaged as security for a $136 million secured five-year term loan from Oversea-Chinese
Banking Corporation Limited and DBS Bank Ltd (Note 14aiii).
148 ANNUAL REPORT 2017
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3.
InveStMent propertIeS (Cont’D)
Valuation processes
Investment properties are stated at fair value based on valuations performed by external independent valuers who
possess appropriate recognised professional qualifications and relevant experience in the location and property
being valued. In accordance with the CIS code, the Group rotates the independent valuers every two years.
In determining the fair value, the valuers have used valuation methods which involve certain estimates. The
key assumptions used to determine the fair value of investment properties include market-corroborated
capitalisation yields, discount rates and terminal yields. The Manager reviews the appropriateness of the valuation
methodologies, assumptions and estimates adopted and is of the view that they are reflective of the market
conditions as at 30 September 2017.
Fair value hierarchy
•
•
•
Level 1:
quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group
can access at the measurement date;
Level 2:
inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
Level 3:
inputs for the asset or
(unobservable inputs).
liability that are not based on observable market data
Fair value measurements that use inputs of different hierarchy levels are categorised in its entirety in the same
level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.
at 30 September 2017
Non-financial assets
Investment properties
at 30 September 2016
Non-financial assets
Investment properties
Level 1
$’000
Level 2
$’000
Level 3
$’000
total
$’000
–
–
–
2,668,100
2,668,100
–
2,509,000
2,509,000
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3.
InveStMent propertIeS (Cont’D)
Level 3 fair value measurements
The following table shows the information about fair value measurements using significant unobservable
inputs (Level 3):
Description
Investment
properties
Fair value at
30 September 2017
$’000
valuation
techniques
Key
unobservable
inputs
range of
unobservable
inputs
relationship of
unobservable
inputs to
fair value
2,668,100 Capitalisation
approach
Capitalisation
rate
4.00% – 5.25%
(2016: 5.25% – 5.75%)
Discounted
cash flow
analysis
Discount
rate
7.25% – 8.00%
(2016: 7.50% – 8.00%)
Terminal
yield
4.25% – 5.75%
(2016: 5.50% – 6.00%)
Direct
comparison
method
Transacted
prices
Nil (2016: Nil)
The higher
the rate,
the lower
the fair value.
The higher
the rate,
the lower
the fair value.
The higher
the rate,
the lower
the fair value.
The higher
the comparable
value,
the higher the
fair value.
A significant reduction in the capitalisation rate and/or discount rate in isolation would result in a significantly
higher fair value of the investment properties.
The key unobservable inputs correspond to:
•
•
•
discount rate, based on the risk-free rate for 10-year bonds issued by the government in Singapore,
adjusted for a risk premium to reflect the increased risk of investing in the asset class;
terminal yield reflects the uncertainty, functional/economic obsolescence and the risk associated with
the investment properties; and
capitalisation rate which corresponds to a rate of return on investment properties based on the expected
income that the property will generate.
150 ANNUAL REPORT 2017
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3.
InveStMent propertIeS (Cont’D)
Level 3 fair value measurements (cont’d)
The net change in fair value of the properties recognised in the Statements of Total Return has been adjusted for
amortisation of lease incentives as follows:
Surplus on revaluation
Amortisation of lease incentives
Surplus on revaluation recognised in Statements of Total Return
Group and trust
2017
$’000
2016
$’000
96,455
(2,056)
94,399
28,944
(537)
28,407
Direct operating expenses (including repairs and maintenance) arising from rental generating properties are
disclosed on Note 19 to the financial statements.
The Group has no restrictions on the realisability of its investment properties and no contractual obligations to
purchase, construct or develop investment property or for repairs, maintenance or enhancements.
4.
FIXeD aSSetS
Cost
At beginning
Additions
Disposals
At end
accumulated depreciation
At beginning
Charge for the year
Disposals
At end
Carrying amount
At beginning
At end
equipment,
furniture and fittings
Group and trust
2017
$’000
2016
$’000
357
24
(90)
291
271
29
(89)
211
86
80
360
23
(26)
357
255
41
(25)
271
105
86
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5
IntanGIBLe aSSetS
Cost
At beginning
Additions
At end
accumulated depreciation
At beginning
Charge for the year
At end
Carrying amount
At beginning
At end
6.
InveStMent In SUBSIDIarY
Unquoted equity investment, at cost
* Denotes amount less than $500.
Details of the subsidiary are as follows:
name of subsidiary
place of incorporation/ business
FCT MTN Pte. Ltd. (1)
Singapore
(1) Audited by KPMG LLP, Singapore
Software
Group and trust
2017
$’000
2016
$’000
90
–
90
42
18
60
48
30
90
–
90
24
18
42
66
48
trust
2017
$’000
2016
$’000
*
*
effective equity
interest held by
the trust
2017
%
100
2016
%
100
FCT MTN Pte. Ltd. (“FCT MTN”) is a wholly-owned subsidiary with share capital of $2 comprising 2 ordinary
shares. The principal activity of the subsidiary is the provision of treasury services, including lending to the Trust
the proceeds from issuance of notes under an unsecured multicurrency medium term note programme.
152 ANNUAL REPORT 2017
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7.
InveStMent In aSSoCIate
Quoted units, at cost
Share of post-acquisition reserves
– operations
– revaluation surplus
Translation difference
Allowance for impairment
Fair value of investment based on
published price quotation
Details of the associate are as follows:
Group
trust
2017
$’000
2016
$’000
2017
$’000
2016
$’000
74,584
67,806
74,584
67,806
3,002
14,247
(20,466)
71,367
(6,759)
64,608
3,598
14,004
(19,049)
66,359
(6,759)
59,600
–
–
–
74,584
(9,976) (1)
64,608
–
–
–
67,806
(3,963)
63,843
58,846
64,511
58,846
64,511
name of associate
place of incorporation / business
effective equity
interest held by the
Group and trust
2016
%
2017
%
Hektar Real Estate Investment Trust
Malaysia
31.15 (2)
31.17 (3)
(1) As at 30 September 2017, as a result of change in fair value of the investment properties held by H-REIT, the Manager has assessed the
recoverable amount of the Trust’s interest in H-REIT for impairment. The allowance for impairment loss amounting to $6,013,000 (2016:
Nil) was recognised in respect of the Trust’s investment in H-REIT taking into consideration the fair value of the underlying properties held
by H-REIT and the liabilities to be settled. The recoverable amount was assessed based on net assets less costs to sell using the net asset
value of H-REIT as at 30 September 2017.
(2) To be audited by BDO, Malaysia.
(3) Audited by SJ Grant Thornton, Malaysia.
Hektar Real Estate Investment Trust (“H-REIT”) is a real estate investment trust constituted in Malaysia by a trust
deed dated 5 October 2006. H-REIT units are listed on the Main Board of Bursa Malaysia Securities Berhad. The
principal investment objective of H-REIT is to invest in income-producing real estate in Malaysia used primarily
for retail purposes.
In August 2017, the Trust subscribed its entitlement of 19,005,448 units in H-REIT for RM21.1 million. In September
2017, as part of the acquisition fee, H-REIT issued 360,000 new units to its manager, resulting in dilution of the
Trust Unitholding to 31.15%.
As the results of H-REIT are not expected to be announced in sufficient time to be included in the Group’s
results for the quarter ended 30 September 2017, the Group has estimated the results of H-REIT for the quarter
ended 30 September 2017 based on its results for the preceding quarter, adjusted for significant transactions
and events occurring up to the reporting date of the Group, if any.
The result for H-REIT was equity accounted for at the Group level, net of 10% (2016: 10%) withholding tax in Malaysia.
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7.
InveStMent In aSSoCIate (Cont’D)
The following summarised financial information relating to the associate has not been adjusted for the
percentage of ownership interest held by the Group:
assets and liabilities (4)
Non-current assets
Current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
results (5)
Revenue
Expenses
Revaluation surplus/(deficit)
Total return for year
2017
$’000
2016
$’000
353,057
11,170
364,227
12,843
163,421
176,264
364,872
12,651
377,523
12,661
169,186
181,847
39,805
(27,056)
779
13,528
42,340
(27,982)
(13,374)
984
(4) The “Assets and liabilities” is based on the latest available unaudited management accounts as at 30 June 2017 and 30 June 2016 respectively.
(5) The “Results” is for six months ended 30 June 2017 and 30 June 2016 respectively and pro-rated six month results from the audited financial
statements for the period ended 31 December 2016 and 31 December 2015 respectively.
As at 30 September 2017, the associate’s property portfolio comprises Subang Parade in Selangor, Mahkota
Parade in Melaka, Wetex Parade and Segamat Central in Johor, Central Square and Landmark Central in Kedah.
8.
InveStMent In JoInt ventUre
Unquoted equity investment, at cost
Share of post-acquisition reserves
– operations
Details of the joint venture are as follows:
Group
2017
$’000
1
242
243
2016
$’000
1
234
235
trust
2017
$’000
2016
$’000
1
–
1
1
–
1
name of joint venture
place of incorporation / business
Changi City Carpark Operations LLP
Singapore
effective equity
interest held by the
Group and trust
2017
%
2016
%
43.68
43.68
The Group has 43.68% interest in the ownership and voting rights in a joint venture, Changi City Carpark
Operations LLP. This joint venture is incorporated in Singapore and is a strategic venture in the management
and operation of car park in Changi City Point. The Group jointly controls the venture with other partner under
the contractual agreement and requires unanimous consent for all major decisions over the relevant activities.
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9.
traDe anD otHer reCeIvaBLeS
Trade receivables
Allowance for doubtful receivables
Net trade receivables
Deposits
Prepayments
Amount due from related party (non-trade)
Amount due from joint venture (non-trade)
Loan arrangement fees
Group and trust
2017
$’000
2016
$’000
2,480
(79)
2,401
59
250
3
–
1,544
4,257
3,963
(62)
3,901
443
166
–
87
2,203
6,800
Trade receivables are recognised at their original invoiced amounts which represent their fair values on
initial recognition.
(i)
Trade receivables that are past due but not impaired
The Group and the Trust have trade receivables amounting to $2,401,000 (2016: $3,901,000) that are
past due at the balance sheet date but not impaired. The aging of receivables at the balance sheet date
is as follows:
trade receivables past due but not impaired:
Less than 30 days
30 to 60 days
61 to 90 days
91 to 120 days
More than 120 days
(ii)
Trade receivables that are impaired
Group and trust
2017
$’000
2016
$’000
1,651
344
104
128
174
2,401
2,776
539
76
205
305
3,901
Trade receivables of the Group and the Trust that are impaired at the balance sheet date and the
movements of the allowance account used to record the impairment are as follows:
Trade receivables
Allowance for doubtful receivables
Group and trust
2017
$’000
2016
$’000
79
(79)
–
62
(62)
–
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9.
traDe anD otHer reCeIvaBLeS (Cont’D)
(ii)
Trade receivables that are impaired (cont’d)
Movement in allowance account:
At beginning
Allowance for doubtful receivables recognised
Write back of allowance for doubtful receivables
Allowance utilised
At end
Group and trust
2017
$’000
2016
$’000
62
118
(96)
(5)
79
61
38
(36)
(1)
62
Trade receivables that are individually determined to be impaired at the balance sheet date relate to
debtors that are in significant difficulties and have defaulted on payments. The allowance for impairment
recorded in relation to these receivables represents the amount in excess of the security deposits held
as collateral.
Based on the Group’s historical experience of the collection of trade receivables, the Manager believes
that there is no additional credit risk beyond those which have been provided for.
10.
CaSH anD CaSH eQUIvaLentS
For purpose of the consolidated cash flow statement, cash and cash equivalents comprise the following at the
balance sheet date:
Cash at bank and on hand
Group and trust
2017
$’000
2016
$’000
13,547
18,708
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11.
traDe anD otHer paYaBLeS
Trade payables and accrued operating expenses
Amounts due to related parties (trade)
Deposits and advances
Interest payable
Other payables
Withholding tax
Group
trust
2017
$’000
15,467
5,486
5,917
4,627
59
1,118
32,674
2016
$’000
24,405
9,005
2,342
2,571
36
1,000
39,359
2017
$’000
15,488
5,486
5,917
4,627
59
1,118
32,695
2016
$’000
24,423
9,005
2,342
2,571
36
1,000
39,377
Included in trade payables and accrued operating expenses is an amount due to the Trustee of $70,231
(2016: $67,487).
Included in amounts due to related parties are amounts due to the Manager of $2,740,277 (2016: $3,788,620)
and the Property Manager of $2,645,864 (2016: $5,205,879) respectively. The amounts due to related parties are
unsecured, interest free and payable within the next 3 months.
12.
FInanCIaL DerIvatIveS
Derivative liabilities
Interest rate swaps used for hedging
– Non-current
– Current
Group and trust
2017
$’000
2016
$’000
317
–
317
–
601
601
Financial derivatives as a percentage of net assets
(0.02%)
(0.03%)
The Trust entered into contracts to exchange, at specified intervals, the difference between floating rate and
fixed rate interest amounts calculated by reference to agreed notional amounts.
As at 30 September 2017, the Group has an interest rate swap contract with a total notional amount of $80 million
(2016: $160 million). Under the contract, the Group pays fixed interest rate of 1.33% (2016: 1.08% to 1.78%).
The fair value of the interest rate swaps is determined using valuation technique as disclosed in Note 25(b). The
Group does not apply hedge accounting.
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Group and trust
2017
$’000
2016
$’000
1,978
–
(1,616)
362
1,402
427
(1,616)
213
2,888
–
(910)
1,978
1,580
732
(910)
1,402
149
576
134
15
149
427
149
576
Group
2017
$’000
2016
$’000
trust
2017
$’000
2016
$’000
–
–
60,000
–
92,000
152,000
285,769
60,000
–
299,771
645,540
70,000
90,000
30,000
–
28,000
218,000
216,000
60,000
–
240,000
516,000
–
–
–
60,000
92,000
152,000
285,769
60,000
299,771
–
645,540
70,000
90,000
–
30,000
28,000
218,000
216,000
60,000
240,000
–
516,000
13.
DeFerreD InCoMe
Cost
At beginning
Additions
Fully amortised
At end
accumulated amortisation
At beginning
Charge for the year
Fully amortised
At end
net deferred income
This comprises:
Current portion
Non-current portion
14.
IntereSt-BearInG BorroWInGS
Current liabilities
Term loan (secured)
Term loan (unsecured)
Medium Term Notes (unsecured)
Loan from subsidiary (unsecured)
Short term loans (unsecured)
non-current liabilities
Term loan (secured)
Term loan (unsecured)
Loan from subsidiary (unsecured)
Medium Term Notes (unsecured)
158 ANNUAL REPORT 2017
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14.
IntereSt-BearInG BorroWInGS (Cont’D)
(a)
term loans (secured)
(i)
In December 2016, the Trust entered into a facility agreement with DBS Bank Ltd to refinance the
secured term loan of $70 million (the “$70 million Secured Term Loan”) for a tenure of three years.
The $70 million Secured Term Loan is principally secured by the following:
•
•
•
a mortgage over Bedok Point;
an assignment of the rights, benefits, title and interest of the Trust in, under and arising out
of the insurances effected in respect of Bedok Point; and
an assignment and charge of the rights, benefits, title and interest of the Trust in, under and
arising out of the tenancy agreements, the sale agreements, the performance guarantees
(including sale proceeds and rental proceeds) and the bank accounts arising from, relating
to or in connection with Bedok Point.
(ii)
In March 2016, the Trust entered into a facility agreement with DBS Bank Ltd for a secured five-
year term loan of $80 million (the “$80 million Secured Term Loan”).
The $80 million Secured Term Loan is principally secured by the following:
•
•
•
a mortgage over Anchorpoint;
an assignment of the rights, benefits, title and interest of the Trust in, under and arising out
of the insurances effected in respect of Anchorpoint; and
an assignment and charge of the rights, benefits, title and interest of the Trust in, under and
arising out of the tenancy agreements, the sale agreements, the performance guarantees
(including sale proceeds and rental proceeds) and the bank accounts arising from, relating
to or in connection with Anchorpoint.
(iii)
In June 2016, the Trust entered into a facility agreement with Oversea-Chinese Banking
Corporation Limited and DBS Bank Ltd for a secured five-year term loan of $136 million (the “$136
million Secured Term Loan”).
The $136 million Secured Term Loan is principally secured by the following:
•
•
•
a mortgage over YewTee Point;
an assignment of the rights, benefits, title and interest of the Trust in, under and arising out
of the insurances effected in respect of YewTee Point; and
an assignment and charge of the rights, benefits, title and interest of the Trust in, under and
arising out of the tenancy agreements, the sale agreements, the performance guarantees
(including sale proceeds and rental proceeds) and the bank accounts arising from, relating
to or in connection with YewTee Point.
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14.
IntereSt-BearInG BorroWInGS (Cont’D)
(b)
term loan (unsecured)
In June 2014, the Trust entered into a facility agreement with DBS Bank Ltd and Citibank N.A., Singapore
branch for an unsecured term loan of $150 million of which $90 million had been repaid in April 2017.
The outstanding unsecured term loan is repayable in June 2019.
(c) Medium term notes (unsecured) programme
On 7 May 2009, the Group through its subsidiary, FCT MTN Pte Ltd (“FCT MTN”), established a
$500,000,000 Multicurrency Medium Term Note Programme (“FCT MTN Programme”). With effect from
14 August 2013, the maximum aggregate principal amount of notes that may be issued under the FCT
MTN Programme is increased from $500,000,000 to $1,000,000,000. Under the FCT MTN Programme,
FCT MTN may, subject to compliance with all relevant laws, regulations and directives, from time to time
issue notes (the “Notes”) in Singapore dollars or any other currency. The Notes may be issued in various
amounts and tenors, and may bear interest at fixed, floating, hybrid or variable rates of interest. Hybrid
notes or zero coupon notes may also be issued under the FCT MTN Programme.
The Notes shall constitute direct, unconditional, unsubordinated and unsecured obligations of FCT MTN
ranking pari passu, without any preference or priority among themselves, and pari passu with all other
present and future unsecured obligations (other than subordinated obligations and priorities created by
law) of FCT MTN. All sums payable in respect of the Notes are unconditionally and irrevocably guaranteed
by the Trustee.
As at 30 September 2017, the aggregate balance of the Notes issued by the Group under the FCT MTN
Programme amounted to $360 million (2016: $270 million), consisting of:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
$Nil (2016: $30 million) Fixed Rate Notes which matured on 12 June 2017 and bear a fixed interest
rate of 2.850% per annum paid semi-annually in arrear;
$70 million (2016: $70 million) Fixed Rate Notes which mature on 21 January 2020 and bear a
fixed interest rate of 3.000% per annum payable semi-annually in arrear;
$60 million (2016: $60 million) Fixed Rate Notes which mature on 12 December 2017 and bear a
fixed interest rate of 2.535% per annum payable semi-annually in arrear;
$60 million (2016: $60 million) Fixed Rate Notes which mature on 10 April 2019 and bear a fixed
interest rate of 2.900% per annum payable semi-annually in arrear;
$50 million (2016: $50 million) Fixed Rate Notes which mature on 21 June 2021 and bear a fixed
interest rate of 2.760% per annum payable semi-annually in arrear;
$90 million (2016: $ Nil) Fixed Rate Notes which mature on 3 April 2020 and bear a fixed interest
rate of 2.365% per annum payable semi-annually in arrear; and
(vii)
$30 million (2016: $ Nil) Fixed Rate Notes which mature on 6 June 2022 and bear a fixed interest
rate of 2.645% per annum payable semi-annually in arrear.
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14.
IntereSt-BearInG BorroWInGS (Cont’D)
(d) Multicurrency Debt (unsecured) Issuance programme
On 8 February 2017, the Group established a $3 billion Multicurrency Debt Issuance Programme (“Debt
Issuance Programme”). Under the Debt Issuance Programme, the Issuers may, subject to compliance
with all relevant laws, regulations and directives from time to time, issue notes (the “Notes”) and perpetual
securities (the “Perpetual Securities”, and together with the Notes, the “Securities”) in Singapore dollars
or any other currency as may be agreed between the relevant dealers of the Programme and the Issuers.
Each series or tranche of Notes may be issued in various amounts and tenors, and may bear interest
at fixed, floating, hybrid or variable rates as may be agreed between the relevant dealers of the Debt
Issuance Programme and the relevant Issuer or may not bear interest. The Notes and the coupons of all
series shall constitute direct, unconditional, unsubordinated and unsecured obligations of the relevant
Issuer and shall at all times rank pari passu, without any preference or priority among themselves, and pari
passu with all other present and future unsecured obligations (other than subordinated obligations and
priorities created by law) of the relevant Issuer.
As at 30 September 2017, no Note has been issued under this programme.
(e)
Short term loans (unsecured)
The Trust has obtained unsecured credit facilities totalling $140 million (2016: $90 million). As at
30 September 2017, total borrowings drawn down by the Trust on these facilities amounted to $92
million (2016: $28 million).
15.
tranSLatIon reServe
The translation reserve represents exchange differences arising from the translation of the financial statements
of foreign operations whose functional currency is different from that of the Group’s presentation currency.
At beginning
Net effect of exchange loss/(gain) arising from
translation of financial statements of foreign operations
At end
Group
2017
$’000
2016
$’000
19,049
20,167
1,417
20,466
(1,118)
19,049
FRAsERs CENTREPOiNT TRUsT
161
noteS to tHe FInanCIaL StateMentS
30 SEPTEMBER 2017
16.
UnItS In ISSUe
Group and trust
2017
2016
no. of Units no. of Units
’000
’000
Units in issue
At beginning
Issue of Units
– issued as satisfaction of asset management fees
– issued as satisfaction of acquisition fee
At end
919,369
916,840
2,889
190
922,448
2,529
–
919,369
Group and trust
2017
2016
no. of Units no. of Units
’000
’000
Units to be issued
– as asset management fees payable in Units
Total issued and issuable Units at end
2,814
925,262
829
920,198
Each Unit represents an undivided interest in the Trust. The rights and interests of Unitholders are contained in
the Trust Deed and include the rights to:
•
•
•
receive income and other distributions attributable to the Units held;
participate in the termination of the Trust by receiving a share of all net cash proceeds derived from the
realisation of the assets of the Trust less any liabilities, in accordance with their proportionate interests in
the Trust. However, a Unitholder has no equitable or proprietary interest in the underlying assets of the
Trust and is not entitled to the transfer to it of any assets (or part thereof) or of any estate or interest in
any assets (or part thereof) of the Trust;
attend all Unitholders’ meetings. The Trustee or the Manager may (and the Manager shall at the request
in writing of not less than 50 Unitholders or one-tenth number of the Unitholders, whichever is lesser) at
any time convene a meeting of Unitholders in accordance with the provisions of the Trust Deed; and
•
one vote per Unit.
The restrictions of a Unitholder include the following:
•
•
•
a Unitholder’s right is limited to the right to require due administration of the Trust in accordance with the
provisions of the Trust Deed; and
a Unitholder has no right to request the Manager to redeem his Units while the Units are listed on SGX-ST.
A Unitholder’s liability is limited to the amount paid or payable for any Units in the Trust. The provisions
of the Trust Deed provide that no Unitholders will be personally liable to indemnify the Trustee or any
creditor of the Trustee in the event that liabilities of the Trust exceed its assets.
162 ANNUAL REPORT 2017
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30 SEPTEMBER 2017
17.
net aSSet vaLUe per UnIt
Group
trust
2017
$’000
2016
$’000
2017
$’000
2016
$’000
Net asset value per Unit is based on:
Net assets
1,872,203
1,775,645
1,871,940
1,779,636
Total issued and issuable Units (Note 16)
925,262
920,198
925,262
920,198
’000
’000
’000
’000
18.
GroSS revenUe
Gross rental income
Turnover rental income
Carpark income
Others
19.
propertY eXpenSeS
Property tax
Utilities
Maintenance
Property management fees
Marketing expenses
Allowance for doubtful receivables
Write back of allowance for doubtful receivables
Depreciation of fixed assets
Amortisation of intangible assets
Staff costs (1)
Carpark expenses
Others
(1) Relates to reimbursement of staff costs paid/payable to the Property Manager.
The Group and the Trust do not have any employees.
Group and trust
2016
2017
$’000
$’000
161,587
8,694
4,168
7,146
181,595
162,969
9,141
4,484
7,222
183,816
Group and trust
2017
$’000
2016
$’000
15,623
1,455
15,605
7,027
6,299
118
(96)
29
18
4,072
1,208
679
52,037
15,707
2,447
15,923
7,100
6,697
38
(36)
41
18
4,134
1,236
659
53,964
FRAsERs CENTREPOiNT TRUsT
163
noteS to tHe FInanCIaL StateMentS
30 SEPTEMBER 2017
20.
BorroWInG CoStS
Interest expense
Amortisation of loan arrangement fees
21.
aSSet ManaGeMent FeeS
Group and trust
2017
$’000
2016
$’000
16,852
781
17,633
16,299
888
17,187
Asset management fees comprise $8,017,214 (2016: $7,716,381) of base fee and $6,477,863 (2016: $6,492,582) of
performance fee computed in accordance with the fee structure as disclosed in Note 1.2 to the financial statements.
An aggregate of 4,874,255 (2016: 2,986,994) Units were issued or are issuable to the Manager as satisfaction of
the asset management fees payable for the financial year ended 30 September 2017.
22.
taXatIon
reconciliation of effective tax
Net income
Income tax using Singapore tax rate of 17%
(2016: 17%)
Non-tax deductible items
Income not subject to tax
Income exempt from tax
Group
trust
2017
$’000
2016
$’000
2017
$’000
2016
$’000
94,830
96,813
94,827
96,811
16,121
1,878
709
(18,708)
–
16,458
1,174
667
(18,299)
–
16,121
1,879
709
(18,709)
–
16,458
1,174
667
(18,299)
–
164 ANNUAL REPORT 2017
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30 SEPTEMBER 2017
23.
earnInGS per UnIt
(i)
Basic earnings per Unit
The calculation of basic earnings per Unit is based on the weighted average number of Units during the
year and total return for the year.
Group
trust
2017
$’000
2016
$’000
2017
$’000
2016
$’000
Total return for year after tax
193,904
123,446
188,233
127,706
Weighted average number of Units in issue
921,429
918,181
921,429
918,181
(ii)
Diluted earnings per Unit
In calculating diluted earnings per unit, the total return for the year and weighted average number of
Units outstanding are adjusted for the effect of all dilutive potential units, as set out below:
Group
2017
$’000
2016
$’000
trust
2017
$’000
2016
$’000
Total return for year after tax
193,904
123,446
188,233
127,706
Weighted average number of Units in issue
925,238
918,181
925,238
918,181
24.
SIGnIFICant reLateD partY tranSaCtIonS
During the financial year, other than the transactions disclosed in the financial statements, the following related
party transactions were carried out in the normal course of business on arm’s length commercial terms:
Property management fees and reimbursement of
expenses paid/payable to the Property Manager (1)
Reimbursement of expenses paid/payable to the Manager
Reimbursement of expenses/capital expenditure paid/payable to
related companies of the Manager
Recovery of expenses paid on behalf of a related company of the Manager
Recovery of net income receivable from related companies of the Manager
Income from related companies of the Manager
Car park expenses paid/payable to the Joint Venture
(1)
In accordance with service agreements in relation to management of the Trust and its property operations.
Group and trust
2017
$’000
2016
$’000
17,419
52
17,933
43
136
–
–
(62)
33
33
(14)
(8)
(3)
32
FRAsERs CENTREPOiNT TRUsT
165
noteS to tHe FInanCIaL StateMentS
30 SEPTEMBER 2017
25.
FaIr vaLUe oF aSSetS anD LIaBILItIeS
(a)
assets and liabilities measured at fair value
Group and trust
at 30 September 2017
Financial liabilities
Interest rate swaps
at 30 September 2016
Financial liabilities
Interest rate swaps
Level 1
$’000
Level 2
$’000
Level 3
$’000
total
$’000
–
–
317
601
–
–
317
601
During the financial years ended 30 September 2017 and 2016, there have been no transfers between
the respective levels.
(b)
Level 2 fair value measurements
Interest rate swap contracts are valued using present value calculations by applying market observable
inputs existing at each balance sheet date into swap models. The models incorporate various inputs
including the credit quality of counterparties and interest rate curves.
(c)
Fair value of financial liabilities that are not carried at fair value and whose carrying amounts are not
reasonable approximation of fair values
The following fair values, which are determined for disclosure purposes, are estimated by discounting
expected future cash flows at market incremental lending rates for similar types of lending or borrowing
arrangements at the balance sheet date:
Group and trust
Financial liabilities
Interest-bearing borrowings (non-current)
Security deposits (non-current)
2017
$’000
2016
$’000
Carrying
amount
Fair value
Carrying
amount
Fair value
645,540
30,774
676,314
656,450
29,552
686,002
516,000
23,883
539,883
521,788
23,131
544,919
(d)
Fair value of financial assets and liabilities that are not carried at fair value and whose carrying amounts
are reasonable approximation of fair values
The carrying amounts of financial assets and liabilities with maturity of less than one year (including trade
and other receivables, cash and cash equivalents, trade and other payables, current portion of security
deposits and current portion of interest-bearing borrowings) are reasonable approximation of fair values,
either due to their short-term nature or that they are floating rate instruments that are re-priced to
market interest rates on or near the balance sheet date.
166 ANNUAL REPORT 2017
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30 SEPTEMBER 2017
26.
FInanCIaL rISK ManaGeMent
(a)
Capital risk management
The primary objective of the Group’s capital management is to ensure that it maintains a strong and
healthy capital structure in order to support its business and maximise Unitholder value.
The Group is subject to the aggregate leverage limit as defined in the Property Fund Guidelines of the
CIS Code. The CIS Code stipulates that borrowings and deferred payments (together the “Aggregate
Leverage”) of a property fund should not exceed 45.0% of the fund’s depository property.
As at 30 September 2017, the Group’s Aggregate Leverage stood at 29.0% (2016: 28.3%) of its depository
property, which is within the limit set by the Property Fund Guidelines and externally imposed capital
requirements. The Trust has maintained its corporate ratings of “BBB+” from S&P Global Ratings and
“Baa1” from Moody’s Investors Service.
(b)
Financial risk management objectives and policies
Exposure to credit, interest rate and liquidity risks arises in the normal course of the Group’s business.
The Manager continually monitors the Group’s exposure to the above risks. There has been no change
to the Group’s exposure to these financial risks or the manner in which it manages and measures risks.
(i)
Credit risk
Credit risk is the potential financial loss resulting from the failure of a customer or counterparty to
settle its financial and contractual obligations to the Group as and when they fall due.
The Group’s objective is to seek continual revenue growth while minimising losses incurred due to
increased credit risk exposure. The Manager has established credit limits for tenants and monitors
their balances on an ongoing basis. Credit evaluations are performed by the Manager before lease
agreements are entered into with tenants. Credit risk is also mitigated by the rental deposits held
for each of the tenants. In addition, receivables are monitored on an ongoing basis with the result
that the Group’s exposure to bad debts is not significant.
The Manager has established an allowance account for impairment that represents its estimate
of losses in respect of trade receivables due from specific customers. Subsequently when the
Group is satisfied that no recovery of such losses is possible, the financial asset is considered
irrecoverable and the amount charged to the allowance account is written off against the carrying
amount of the impaired financial asset.
The maximum exposure to credit risk is represented by the carrying value of each financial asset
on the Balance Sheets. At the balance sheet date, approximately 17.0% (2016: 14.0%) of the Group’s
trade receivables were due from 5 tenants who are reputable companies located in Singapore.
Trade and other receivables that are neither past due nor impaired represent creditworthy debtors
with good payment record with the Group. Cash and fixed deposits are placed with local banks
regulated by the MAS.
Information regarding financial assets that are either past due or impaired is disclosed in Note 9.
FRAsERs CENTREPOiNT TRUsT
167
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30 SEPTEMBER 2017
26.
FInanCIaL rISK ManaGeMent (Cont’D)
(b)
Financial risk management objectives and policies (cont’d)
(ii)
Interest rate risk
The Group’s exposure to changes in interest rates relates primarily to its interest-earning financial
assets and interest-bearing financial liabilities. Interest rate risk is managed by the Manager on
an ongoing basis with the primary objective of limiting the extent to which net interest expense
could be affected by adverse movements in interest rates. The Manager adopts a policy of fixing
the interest rates for a portion of its outstanding borrowings using financial derivatives or other
suitable financial products.
Sensitivity analysis for interest rate risk
It is estimated that a twenty five basis points increase in interest rate at the balance sheet date,
with all other variables held constant, would decrease the Group’s total return for the year and
Unitholders’ funds by approximately $229,000 (2016: $451,000) and a twenty five basis points
decrease in interest rate, with all other variables held constant, would increase the Group’s total
return for the year and Unitholders’ funds by approximately $230,000 (2016: $451,000), arising
mainly as a result of change in the fair value of interest rate swap instruments. On outstanding
borrowings not covered by financial derivatives at the balance sheet date, it is estimated that
a twenty five basis points increase in interest rate, with all other variables held constant, would
decrease the Group’s total return for the year and Unitholders’ funds by approximately $665,000
(2016: $690,000) and a twenty five basis points decrease in interest rate, with all other variables
held constant, would increase the Group’s total return for the year and Unitholders’ funds by
approximately $665,000 (2016: $690,000), arising mainly as a result of lower/higher interest
expense on floating rate loans and borrowings. The assumed movement in basis points for interest
rate sensitivity analysis is based on current observable market environment.
168 ANNUAL REPORT 2017
noteS to tHe FInanCIaL StateMentS
30 SEPTEMBER 2017
26.
FInanCIaL rISK ManaGeMent (Cont’D)
(b)
Financial risk management objectives and policies (cont’d)
(iii)
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting financial obligations
due to shortage of funds. The Group’s objective is to maintain sufficient cash on demand to
meet expected operational expenses for a reasonable period, including the servicing of financial
obligations. The Manager monitors and maintains a level of cash and cash equivalents deemed
adequate to finance the Group’s operations and to mitigate the effects of fluctuations in cash
flows. In addition, the Manager monitors and observes the CIS Code issued by the MAS concerning
limits on total borrowings.
The table below summarises the maturity profile of the Group’s and the Trust’s financial liabilities
at the balance sheet date based on contractual undiscounted payments.
Within 1 year
$’000
1 to 5 years
$’000
More than
5 years
$’000
total
$’000
as at 30 September 2017
Group
Trade and other payables
Derivative financial instruments
Security deposits
Interest-bearing borrowings
trust
Trade and other payables
Derivative financial instruments
Security deposits
Interest-bearing borrowings
as at 30 September 2016
Group
Trade and other payables
Derivative financial instruments
Security deposits
Interest-bearing borrowings
trust
Trade and other payables
Derivative financial instruments
Security deposits
Interest-bearing borrowings
31,556
289
17,366
166,791
216,002
31,577
289
17,366
166,791
216,023
39,359
601
21,010
229,973
290,943
39,377
601
21,010
229,973
290,961
–
30
30,750
672,055
702,835
–
30
30,750
672,055
702,835
–
–
23,873
538,368
562,241
–
–
23,873
538,368
562,241
–
–
24
–
24
–
–
24
–
24
–
–
10
–
10
–
–
10
–
10
31,556
319
48,140
838,846
918,861
31,577
319
48,140
838,846
918,882
39,359
601
44,893
768,341
853,194
39,377
601
44,893
768,341
853,212
FRAsERs CENTREPOiNT TRUsT
169
noteS to tHe FInanCIaL StateMentS
30 SEPTEMBER 2017
27.
SeGMent reportInG
Business segments
The Group is in the business of investing in the following shopping malls, which are considered to be the main
business segments: Causeway Point, Northpoint City North Wing and Yishun 10 Retail Podium, Anchorpoint,
YewTee Point, Bedok Point and Changi City Point. All these properties are located in Singapore.
Management monitors the operating results of the business segments separately for the purpose of making
decisions about resource allocation and performance assessment. Segment information is presented in respect
of the Group’s business segments, based on its management and internal reporting structure.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can
be allocated on a reasonable basis. Unallocated items comprise mainly income-earning assets, interest-bearing
borrowings and their related revenue and expenses.
Segment capital expenditure is the total costs incurred during the year to acquire segment assets that are
expected to be used for more than one year.
Geographical segments
The Group’s operations are primarily in Singapore except for its associate, for which operations are in Malaysia.
170 ANNUAL REPORT 2017
noteS to tHe FInanCIaL StateMentS
30 SEPTEMBER 2017
27.
SeGMent reportInG (Cont’D)
(a)
Business segments
northpoint City
north Wing
and Yishun 10
retail podium
$’000
Causeway
point
$’000
anchor-
point
$’000
Yewtee
point
$’000
Bedok
point
$’000
Changi
City point
$’000
Group
$’000
75,238
9,485
84,723
38,064
3,965
42,029
7,654
867
8,521
12,690
1,758
14,448
6,508
830
7,338
21,433 161,587
20,008
24,536 181,595
3,103
2017
Revenue and expenses
Gross rental income
Others
Gross revenue
Segment net property
income
65,539
29,742
4,633
10,049
3,663
15,932 129,558
Unallocated expenses *
Net income
Unrealised gain from
fair valuation of
derivatives
Share of results of
associate
Share of results of
joint venture
Surplus on revaluation
of investment
properties
Total return for the year
(34,728)
94,830
284
3,820
571
94,399
193,904
46,447
38,419
1,278
5,921
(2,904)
5,238
* Unallocated expenses include borrowing costs and asset management fees as disclosed in the Statement of Total Return.
FRAsERs CENTREPOiNT TRUsT
171
noteS to tHe FInanCIaL StateMentS
30 SEPTEMBER 2017
27.
SeGMent reportInG (Cont’D)
(a)
Business segments (cont’d)
Causeway
point
$’000
northpoint City
north Wing
$’000
anchor-
point
$’000
Yewtee
point
$’000
Bedok
point
$’000
Changi
City point
$’000
Group
$’000
72,889
10,133
83,022
40,788
4,174
44,962
7,853
875
8,728
12,640
1,703
14,343
7,450
884
8,334
21,349 162,969
20,847
24,427 183,816
3,078
2016
Revenue and expenses
Gross rental income
Others
Gross revenue
Segment net property
income
62,031
33,333
4,698
10,206
4,226
15,358 129,852
Unallocated expenses *
Net income
Unrealised loss from
fair valuation of
derivatives
Share of results of
associate
Share of results of
joint venture
Surplus on revaluation
of investment
properties
Total return for the year
(33,039)
96,813
(1,896)
(416)
538
28,407
123,446
32,408
(8,463)
3,031
2,019
(201)
(387)
* Unallocated expenses include borrowing costs and asset management fees as disclosed in the Statements of Total Return.
172 ANNUAL REPORT 2017
noteS to tHe FInanCIaL StateMentS
30 SEPTEMBER 2017
27.
SeGMent reportInG (Cont’D)
(a)
Business segments (cont’d)
as at 30 September
2017
Assets and liabilities
Segment assets
Investment in
associate
Investment in
joint venture
Unallocated assets
Total assets
Segment liabilities
Unallocated liabilities
– Trade and other
payables
– Financial derivatives
– Interest-bearing
borrowings
Total liabilities
Other segmental
information
Allowance for
doubtful
receivables
Write back of
allowance
for doubtful
receivables
Amortisation of
lease incentives
Depreciation of
fixed assets
Amortisation of
intangible assets
Fixed assets
written off
Capital expenditure
– Investment
properties
– Fixed assets
northpoint City
north Wing
and Yishun 10
retail podium
$’000
Causeway
point
$’000
anchor-
point
$’000
Yewtee
point
$’000
Bedok
point
$’000
Changi
City point
$’000
Group
$’000
1,193,153
775,139 106,112 179,612 106,946
322,735 2,683,697
28,643
18,063
3,462
5,414
3,450
12,477
71,509
64,608
243
2,317
2,750,865
9,296
317
797,540
878,662
–
–
5
–
15
84
118
(5)
(2)
(5)
(49)
(96)
(1,801)
(64)
12
125
(583)
(2,056)
14
(35)
255
9
3
–
5
3
–
3
3
–
807
–
60,280
10
258
5
4
3
–
91
4
4
3
1
4
3
–
29
18
1
29
1
1,180
4
62,645
24
FRAsERs CENTREPOiNT TRUsT
173
noteS to tHe FInanCIaL StateMentS
30 SEPTEMBER 2017
27.
SeGMent reportInG (Cont’D)
(a)
Business segments (cont’d)
Causeway
point
$’000
northpoint City
north Wing
$’000
anchor-
point
$’000
Yewtee
point
$’000
Bedok
point
$’000
Changi
City point
$’000
Group
$’000
1,147,132
675,130 104,611 173,850 109,916
314,786 2,525,425
59,600
235
9,217
2,594,477
30,064
21,012
3,847
5,693
4,526
11,382
76,524
8,308
734,000
818,832
12
–
19
–
5
2
38
(13)
417
15
3
–
(19)
(955)
56
6
3
4
3
25
2
–
26
5
3
7
–
–
30
6
3
(4)
(36)
(111)
(537)
5
3
41
18
230
6
276
2
16,056
23
1,009
11
14,509
2
as at 30 September
2016
Assets and liabilities
Segment assets
Investment in
associate
Investment in
joint venture
Unallocated assets
Total assets
Segment liabilities
Unallocated liabilities
– Trade and other
payables
– Interest-bearing
borrowings
Total liabilities
Other segmental
information
Allowance for
doubtful
receivables
Write back of
allowance
for doubtful
receivables
Amortisation of
lease incentives
Depreciation of
fixed assets
Amortisation of
intangible assets
Capital expenditure
– Investment
properties
– Fixed assets
174 ANNUAL REPORT 2017
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30 SEPTEMBER 2017
28.
CoMMItMentS
Capital expenditure contracted but not provided for
Group and trust
2017
$’000
2016
$’000
12,617
33,016
The Group leases out its investment properties. Non-cancellable operating lease rentals receivable are as follows:
Receivable:
Within 1 year
After 1 year but within 5 years
After 5 years
29.
ContInGent LIaBILItY
Group and trust
2017
$’000
2016
$’000
156,572
204,917
1,091
362,580
129,906
132,673
163
262,742
Pursuant to the tax transparency ruling from the IRAS, the Trustee and the Manager have provided a tax indemnity
for certain types of tax losses, including unrecovered late payment penalties, that may be suffered by the IRAS
should the IRAS fail to recover from Unitholders tax due or payable on distributions made to them without
deduction of tax, subject to the indemnity amount agreed with the IRAS. The amount of indemnity, as agreed
with the IRAS, is limited to the higher of $500,000 or 1.0% of the taxable income of the Trust each year. Each
yearly indemnity has a validity period of the earlier of seven years from the relevant year of assessment and three
years from the termination of the Trust.
30.
SUBSeQUent eventS
On 25 October 2017, the Manager declared a distribution of $27,480,000 to Unitholders in respect of the period
from 1 July 2017 to 30 September 2017.
On 27 October 2017, the Trust issued 2,813,931 new Units at a price of $2.1289 per Unit in payment of 70% of
its Manager’s base management fees for the quarter ended 30 September 2017 and performance management
fees for the year ended 30 September 2017.
On 8 November 2017, FCT MTN Pte. Ltd., a wholly-owned subsidiary of the Trust, issued 7-year fixed rate notes
in aggregate principal amount of $70.0 million at 2.77 per cent, under the FCT MTN Programme.
FRAsERs CENTREPOiNT TRUsT
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30 SEPTEMBER 2017
31.
FInanCIaL ratIoS
The following financial ratios are presented as required by RAP 7:
Expenses to weighted average net assets (1):
– including performance component of asset management fees
– excluding performance component of asset management fees
Portfolio turnover rate (2)
Group
2017
%
0.96
0.60
–
2016
%
0.90
0.53
–
(1) The annualised ratios are computed in accordance with the guidelines of Investment Management Association of Singapore. The expenses
used in the computation relate to expenses of the Trust, excluding property expenses, interest expense and taxation.
(2) The annualised ratios are computed based on the lesser of purchases or sales of underlying investment properties of the Group expressed
as a percentage of daily average net asset value.
176 ANNUAL REPORT 2017
StatIStICS oF UnItHoLDInGS
ISSUeD anD FULLY paID-Up UnItS
There were 925,262,216 Units (voting rights: one vote per Unit) outstanding as at 24 November 2017.
There is only one class of Units.
The market capitalisation was S$2,045 million based on closing unit price of S$2.21 on 24 November 2017.
top tWentY UnItHoLDerS aS at 24 noveMBer 2017
As shown in the Register of Unitholders
S/no Unitholders
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
FCL TRUST HOLDINGS PTE. LTD.
CITIBANK NOMINEES SINGAPORE PTE LTD
HSBC (SINGAPORE) NOMINEES PTE LTD
DBS NOMINEES (PRIVATE) LIMITED
FRASERS CENTREPOINT ASSET MANAGEMENT LTD
RAFFLES NOMINEES (PTE) LIMITED
DBSN SERVICES PTE. LTD.
UNITED OVERSEAS BANK NOMINEES (PRIVATE) LIMITED
NTUC FAIRPRICE CO-OPERATIVE LTD
CIMB SECURITIES (SINGAPORE) PTE. LTD.
BPSS NOMINEES SINGAPORE (PTE.) LTD.
DB NOMINEES (SINGAPORE) PTE LTD
MAYBANK KIM ENG SECURITIES PTE. LTD.
CHAN WAI KHEONG
OCBC NOMINEES SINGAPORE PRIVATE LIMITED
YAP CHONG HIN GABRIEL
BNP PARIBAS NOMINEES SINGAPORE PTE LTD
UOB KAY HIAN PRIVATE LIMITED
DBS VICKERS SECURITIES (SINGAPORE) PTE LTD
NG SAY BAN
total
number of Units
% of total
Units in Issue
349,671,000
136,544,813
104,970,143
99,054,337
37,632,216
35,477,304
28,359,095
13,576,100
7,695,000
5,568,471
5,119,852
4,452,815
2,251,849
1,924,000
1,845,300
1,740,000
1,532,500
1,372,000
1,369,500
1,350,000
841,506,295
37.79
14.76
11.34
10.71
4.07
3.83
3.06
1.47
0.83
0.60
0.55
0.48
0.24
0.21
0.20
0.19
0.17
0.15
0.15
0.15
90.95
UnItHoLDInGS oF DIreCtorS oF tHe ManaGer aS at 21 oCtoBer 2017
name of Director
Mr Soh Kim Soon
Mr Christopher Tang Kok Kai
Dr Cheong Choong Kong
number of FCt Units held
Direct Interest
Deemed Interest
100,000
50,000
140,300
–
620,000
–
FRAsERs CENTREPOiNT TRUsT
177
StatIStICS oF UnItHoLDInGS
SUBStantIaL UnItHoLDerS aS at 24 noveMBer 2017
Substantial Unitholders
number of Units
% number of Units
Direct Interest
Deemed Interest
349,671,000
37.79%
–
total number
of Units Held
%
349,671,000
37.79%
%
–
FCL Trust Holdings
Pte. Ltd.
Frasers Centrepoint
Limited (1)
Thai Beverage Public
Company Limited (2)
International Beverage
Holdings Limited (3)
InterBev Investment
Limited (4)
Siriwana Company
Limited (5)
Maxtop Management
Corp. (6)
Risen Mark Enterprise Ltd. (7)
Golden Capital (Singapore)
Limited (8)
MM Group Limited (9)
TCC Assets Limited (10)
Charoen
Sirivadhanabhakdi (11)
Khunying Wanna
Sirivadhanabhakdi (12)
Schroder Investment
Management Group (13)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
387,303,216
41.86%
387,303,216
41.86%
387,303,216
41.86%
387,303,216
41.86%
387,303,216
41.86%
387,303,216
41.86%
387,303,216
41.86%
387,303,216
41.86%
387,303,216
41.86%
387,303,216
41.86%
387,303,216
387,303,216
41.86%
41.86%
387,303,216
387,303,216
41.86%
41.86%
387,303,216
387,303,216
387,303,216
41.86%
41.86%
41.86%
387,303,216
387,303,216
387,303,216
41.86%
41.86%
41.86%
387,303,216
41.86%
387,303,216
41.86%
387,303,216
41.86%
387,303,216
41.86%
54,385,200
5.88%
54,385,200
5.88%
notes:
(1) Frasers Centrepoint Limited (“FCL”) holds a 100% direct interest in each of Frasers Centrepoint Asset Management Ltd (“FCaM”) and FCL Trust
Holdings Pte. Ltd. (“FCLt”); and FCAM and FCLT hold units in FCT. FCL therefore has a deemed interest in the units in FCT in which each of FCAM
and FCLT has an interest, by virtue of Section 4 of the Securities and Futures Act (Chapter 289 of Singapore).
(2) Thai Beverage Public Company Limited (“thaiBev”) holds a 100% direct interest in International Beverage Holdings Limited (“IBHL”);
IBHL holds a 100% direct interest in InterBev Investment Limited (“IBIL”);
IBIL holds a greater than 20% interest in FCL;
FCL holds a 100% direct interest in each of FCAM and FCLT; and
FCAM and FCLT hold units in FCT.
−
−
−
−
ThaiBev therefore has a deemed interest in the units in FCT in which FCL has an interest, by virtue of Section 4 of the Securities and Futures Act
(Chapter 289 of Singapore).
IBHL holds a 100% direct interest in InterBev Investment Limited;
−
−
−
IBHL therefore has a deemed interest in the units in FCT in which FCL has an interest, by virtue of Section 4 of the Securities and Futures Act
(Chapter 289 of Singapore).
IBIL holds a greater than 20% interest in FCL;
−
−
IBIL therefore has a deemed interest in the units in FCT in which FCL has an interest, by virtue of Section 4 of the Securities and Futures Act
(Chapter 289 of Singapore).
IBIL holds a greater than 20% interest in FCL;
FCL holds a 100% direct interest in each of FCAM and FCLT; and
FCAM and FCLT hold units in FCT.
FCL holds a 100% direct interest in each of FCAM and FCLT; and
FCAM and FCLT hold units in FCT.
(3)
(4)
178 ANNUAL REPORT 2017
StatIStICS oF UnItHoLDInGS
SUBStantIaL UnItHoLDerS aS at 24 noveMBer 2017 (Cont’D)
(5) Siriwana Company Limited (“SCL”) holds a greater than 20% interest in ThaiBev;
– ThaiBev holds a 100% direct interest in IBHL;
–
IBHL holds a 100% direct interest in IBIL;
IBIL holds a greater than 20% interest in FCL;
–
−
FCL holds a 100% direct interest in each of FCAM and FCLT; and
–
FCAM and FCLT hold units in FCT.
SCL therefore has a deemed interest in the units in FCT in which FCL has an interest, by virtue of Section 4 of the Securities and Futures Act
(Chapter 289 of Singapore).
(6) Maxtop Management Corp. (“MMC”) together with Risen Mark Enterprise Ltd. (“rM”) and Golden Capital (Singapore) Limited (“GC”) collectively holds
a greater than 20% interest in ThaiBev;
– ThaiBev holds a 100% direct interest in IBHL;
–
IBHL holds a 100% direct interest in IBIL;
IBIL holds a greater than 20% interest in FCL;
–
FCL holds a 100% direct interest in each of FCAM and FCLT; and
–
–
FCAM and FCLT hold units in FCT.
MMC therefore has a deemed interest in the units in FCT in which FCL has an interest, by virtue of Section 4 of the Securities and Futures Act (Chapter
289 of Singapore).
(7) RM together with MMC and GC collectively holds a greater than 20% interest in ThaiBev;
– ThaiBev holds a 100% direct interest in IBHL;
IBHL holds a 100% direct interest in IBIL;
–
IBIL holds a greater than 20% interest in FCL;
–
–
FCL holds a 100% direct interest in each of FCAM and FCLT; and
–
FCAM and FCLT hold units in FCT.
RM therefore has a deemed interest in the units in FCT in which FCL has an interest, by virtue of Section 4 of the Securities and Futures Act
(Chapter 289 of Singapore).
(8) GC together with MMC and RM collectively holds a greater than 20% interest in ThaiBev;
– ThaiBev holds a 100% direct interest in IBHL;
IBHL holds a 100% direct interest in IBIL;
–
–
IBIL holds a greater than 20% interest in FCL;
FCL holds a 100% direct interest in each of FCAM and FCLT; and
–
FCAM and FCLT hold units in FCT.
–
GC therefore has a deemed interest in the units in FCT in which FCL has an interest, by virtue of Section 4 of the Securities and Futures Act
(Chapter 289 of Singapore).
(9) MM Group Limited (“MM”) holds a 100% direct interest in each of MMC, RM and GC;
– MMC, RM and GC collectively holds a greater than 20% interest in ThaiBev;
– ThaiBev holds a 100% direct interest in IBHL;
IBHL holds a 100% direct interest in IBIL;
–
IBIL holds a greater than 20% interest in FCL;
–
FCL holds a 100% direct interest in each of FCAM and FCLT; and
–
–
FCAM and FCLT hold units in FCT.
MM therefore has a deemed interest in the units in FCT in which FCL has an interest, by virtue of Section 4 of the Securities and Futures Act
(Chapter 289 of Singapore).
(10) TCC Assets Limited (“tCCa”) holds a majority interest in FCL;
FCL holds a 100% direct interest in each of FCAM and FCLT; and
FCAM and FCLT hold units in FCT.
−
−
TCCA therefore has a deemed interest in the units in FCT in which FCL has an interest, by virtue of Section 4 of the Securities and Futures Act
(Chapter 289 of Singapore).
(11) Charoen Sirivadhanabhakdi and his spouse, Khunying Wanna Sirivadhanabhakdi, each owns 50% of the issued and paid-up share capital of TCCA;
FCL holds a 100% direct interest in each of FCAM and FCLT; and
FCAM and FCLT hold units in FCT.
− TCCA holds a majority interest in FCL;
−
−
Charoen Sirivadhanabhakdi therefore has a deemed interest in the units in FCT in which FCL has an interest, by virtue of Section 4 of the Securities
and Futures Act (Chapter 289 of Singapore).
(12) Khunying Wanna Sirivadhanabhakdi and her spouse, Charoen Sirivadhanabhakdi, each owns 50% of the issued and paid-up share capital of TCCA;
FCL holds a 100% direct interest in each of FCAM and FCLT; and
FCAM and FCLT hold units in FCT.
− TCCA holds a majority interest in FCL;
−
−
Khunying Wanna Sirivadhanabhakdi therefore has a deemed interest in the units in FCT in which FCL has an interest, by virtue of Section 4 of the
Securities and Futures Act (Chapter 289 of Singapore).
(13) Based on information provided by Schroder Investment (Singapore) Ltd. on 27 November 2017.
FRAsERs CENTREPOiNT TRUsT
179
StatIStICS oF UnItHoLDInGS
DIStrIBUtIon oF HoLDInGS
Size of Holdings
1 – 99
100 – 1,000
1,001 – 10,000
10,001 – 1,000,000
1,000,001 and above
total
LoCatIon oF UnItHoLDerS
Country
Singapore
Malaysia
Others
total
Free FLoat
number of
Unitholders
%
number of Units
%
16
776
4,195
1,350
20
6,357
0.25
12.21
65.99
21.24
0.31
100.00
226
666,805
20,596,930
62,491,960
841,506,295
925,262,216
0.00
0.07
2.23
6.75
90.95
100.00
number of
Unitholders
%
number of Units
%
6,059
207
91
6,357
95.31
3.26
1.43
100.00
920,866,613
3,452,200
943,403
925,262,216
99.53
0.37
0.10
100.00
Based on information made available to the Manager as at 27 November 2017, approximately 58.1% of the Units are
held in the hands of the public. Rule 723 of the Listing Manual of the Singapore Exchange Securities Trading Limited
has accordingly been complied with.
180 ANNUAL REPORT 2017
aDDItIonaL InForMatIon
IntereSteD perSon tranSaCtIonS
The transactions entered into with interested persons during the financial year, which fall within the Listing Manual
of the Singapore Exchange Securities Trading Limited (“SGX-ST”) and the Property Funds Appendix of the Code on
Collective Investment Schemes (excluding transactions of less than $100,000 each) are as follows:
aggregate value of all
Interested person transactions
during the financial year under
review (excluding transactions
less than $100,000 and
transactions conducted under
shareholders’ mandate
pursuant to rule 920)
$’000
aggregate value of all
Interested person
transactions during the
financial year under review
under shareholders’ mandate
pursuant to rule 920
(excluding transactions less
than $100,000)
$’000
14,495
378
4,743
1,322
414
–
–
–
–
–
name of Interested person
Frasers Centrepoint Limited and its
subsidiaries or associate
– Asset management fees
– Acquisition fees
– Property management fees *
– Reimbursement of expenses *
HSBC Institutional trust Services
(Singapore) Limited
– Trustee’s fees
* During the year, a property management agreement with Frasers Centrepoint Property Management Services Pte Ltd (the “Property Manager”) for
Yishun 10 Retail Podium has been entered for a tenure of 5 years into commencing 16 November 2016. The fees and expenses reimbursable to the
Property Manager pursuant to the property management agreement are estimated at $270,000.
Saved as disclosed above, there were no additional interested person transactions (excluding transactions of less than
$100,000 each) entered into during the financial year under review nor any material contracts entered into by the Trust
that involved the interests of the CEO, any Director or any controlling shareholder of the Trust.
Please also see Significant Related Party Transactions in Note 24 to the Financial Statements.
Fees payable to the Manager and the Property Manager on the basis of, and in accordance with, the terms and conditions
set out in the Trust deed dated 5 June 2006 (as amended) and/or the prospectus dated 27 June 2006 are not subject
to Rules 905 and 906 of the SGX-ST’s Listing Manual. Accordingly, such fees are not subject to aggregation and other
requirements under Rules 905 and 906 of the SGX-ST’s Listing Manual.
SUBSCrIptIon oF tHe trUSt UnItS
As at 30 September 2017, an aggregate of 922,448,285 Units were in issue. On 27 October 2017, the Trust issued
2,813,931 new Units to the Manager as Manager’s base management fees for the quarter ended 30 September 2017
and performance management fees for the year ended 30 September 2017.
non-DeaL roaDSHoW eXpenSeS
Non-deal roadshow expenses of $44,657 (2016: $37,020) were incurred during the year ended 30 September 2017.
FRAsERs CENTREPOiNT TRUsT
181
notICe oF annUaL GeneraL MeetInG
(CONSTITUTED IN THE REPUBLIC OF SINGAPORE PURSUANT TO A TRUST DEED DATED 5 JUNE 2006
(AS AMENDED AND RESTATED))
notICe IS HereBY GIven that the 9th Annual General Meeting of the unitholders of FRASERS CENTREPOINT TRUST
(“FCt”, and the unitholders of FCT, “Unitholders”) will be held at Level 2, Alexandra Point, 438 Alexandra Road, Singapore
119958 on Tuesday, 23 January 2018 at 10.00 a.m. for the following purposes:
roUtIne BUSIneSS
resolution (1)
1.
To receive and adopt the Report of the Trustee issued by HSBC Institutional Trust Services (Singapore) Limited, as
trustee of FCT (the “trustee”), the Statement by the Manager issued by Frasers Centrepoint Asset Management
Ltd., as manager of FCT (the “Manager”) and the Audited Financial Statements of FCT for the financial year ended
30 September 2017.
resolution (2)
2.
To re-appoint KPMG LLP (“KpMG”) as Auditors of FCT to hold office until the conclusion of the next Annual
General Meeting of FCT, and to authorise the Manager to fix their remuneration.
SpeCIaL BUSIneSS
To consider and, if thought fit, to pass the following Ordinary Resolution, with or without any modifications:
resolution (3)
3.
That authority be and is hereby given to the Manager, to:
(a)
(i)
issue units in FCT (“Units”) whether by way of rights, bonus or otherwise; and/or
(ii)
make or grant offers, agreements or options (collectively, “Instruments”) that might or would
require Units to be issued, including but not limited to the creation and issue of (as well as
adjustments to) securities, warrants, debentures or other instruments convertible into Units,
at any time and upon such terms and conditions and for such purposes and to such persons as the
Manager may in its absolute discretion deem fit; and
(b)
issue Units in pursuance of any Instrument made or granted by the Manager while this Resolution was in
force (notwithstanding that the authority conferred by this Resolution may have ceased to be in force at
the time such Units are issued),
182 ANNUAL REPORT 2017
notICe oF annUaL GeneraL MeetInG
provided that:
(1)
(2)
(3)
(4)
(5)
(6)
the aggregate number of Units to be issued pursuant to this Resolution (including Units to be issued in
pursuance of Instruments made or granted pursuant to this Resolution) shall not exceed fifty per cent.
(50%) of the total number of issued Units (excluding treasury Units, if any) (as calculated in accordance
with sub-paragraph (2) below), of which the aggregate number of Units to be issued other than on a
pro rata basis to Unitholders shall not exceed twenty per cent (20%) of the total number of issued Units
(excluding treasury Units, if any) (as calculated in accordance with sub-paragraph (2) below);
subject to such manner of calculation as may be prescribed by Singapore Exchange Securities Trading
Limited (the “SGX-St”) for the purpose of determining the aggregate number of Units that may be issued
under sub-paragraph (1) above, the total number of issued Units (excluding treasury Units, if any) shall be
based on the number of issued Units (excluding treasury Units, if any) at the time this Resolution is passed,
after adjusting for:
(a)
any new Units arising from the conversion or exercise of any Instruments which are outstanding
at the time this Resolution is passed; and
(b)
any subsequent bonus issue, consolidation or subdivision of Units;
in exercising the authority conferred by this Resolution, the Manager shall comply with the provisions of
the Listing Manual of the SGX-ST for the time being in force (unless such compliance has been waived by
the SGX-ST) and the deed of trust constituting FCT (as amended) (the “trust Deed”) for the time being in
force (unless otherwise exempted or waived by the Monetary Authority of Singapore);
unless revoked or varied by Unitholders in a general meeting, the authority conferred by this Resolution
shall continue in force until (i) the conclusion of the next Annual General Meeting of FCT or (ii) the date
by which the next Annual General Meeting of FCT is required by the applicable law or regulations to be
held, whichever is earlier;
where the terms of the issue of the Instruments provide for adjustment to the number of Instruments or
Units into which the Instruments may be converted in the event of rights, bonus or other capitalisation
issues or any other events, the Manager is authorised to issue additional Instruments or Units pursuant to
such adjustment notwithstanding that the authority conferred by this Resolution may have ceased to be
in force at the time the Instruments or Units are issued; and
the Manager, any director of the Manager (“Director”) and the Trustee, be and are hereby severally
authorised to complete and do all such acts and things (including executing all such documents as may
be required) as the Manager, such Director, or, as the case may be, the Trustee may consider expedient
or necessary or in the interest of FCT to give effect to the authority conferred by this Resolution.
FRAsERs CENTREPOiNT TRUsT
183
notICe oF annUaL GeneraL MeetInG
To consider and, if thought fit, to pass the following Extraordinary Resolution, with or without any modifications:
resolution (4)
4.
That:
(a)
(b)
approval be and is hereby given to amend the Trust Deed to include provisions regarding electronic
communications of notices and documents to Unitholders in the manner set out in Annex A of the
appendix to the Notice of Annual General Meeting (the “appendix”) dated 22 December 2017 (the
“proposed electronic Communications trust Deed Supplement”); and
the Manager and the Trustee be and are hereby severally authorised to complete and do all such acts
and things (including executing all such documents as may be required) as the Manager or, as the case
may be, the Trustee, may consider expedient or necessary or in the interests of FCT to give effect to the
Proposed Electronic Communications Trust Deed Supplement.
Frasers Centrepoint asset Management Ltd.
(Company Registration No: 200601347G)
As manager of Frasers Centrepoint Trust
Catherine Yeo
Company Secretary
Singapore, 22 December 2017
noteS:
(1)
(2)
A Unitholder who is not a relevant intermediary entitled to attend and vote at the meeting is entitled to appoint
not more than two proxies to attend and vote in the Unitholder’ stead. A proxy need not be a Unitholder. Where
a Unitholder appoints more than one proxy, the appointments shall be invalid unless the Unitholder specifies the
proportion of the Unitholder’s holdings (expressed as a percentage of the whole) to be represented by each proxy.
A Unitholder who is a relevant intermediary entitled to attend and vote at the meeting is entitled to appoint more
than two proxies to attend and vote instead of the Unitholder, but each proxy must be appointed to exercise the
rights attached to a different Unit or Units held by such Unitholder. Where such Unitholder appoints more than
two proxies, the appointments shall be invalid unless the Unitholder specifies in the proxy form the number of
Units in relation to which each proxy has been appointed.
“Relevant intermediary” means:
(a)
(b)
(c)
a banking corporation licensed under the Banking Act, Chapter 19 of Singapore or a wholly-owned
subsidiary of such a banking corporation, whose business includes the provision of nominee services and
who holds Units in that capacity;
a person holding a capital markets services licence to provide custodial services for securities under the
Securities and Futures Act, Chapter 289 of Singapore and who holds Units in that capacity; or
the Central Provident Fund Board (“CpF Board”) established by the Central Provident Fund Act, Chapter 36
of Singapore, in respect of Units purchased under the subsidiary legislation made under that Act providing
for the making of investments from the contributions and interest standing to the credit of members of
the Central Provident Fund, if the CPF Board holds those Units in the capacity of an intermediary pursuant
to or in accordance with that subsidiary legislation.
184 ANNUAL REPORT 2017
notICe oF annUaL GeneraL MeetInG
(3)
The instrument appointing a proxy or proxies (a form is enclosed) must be deposited with the company secretary
of the Manager at the office of FCT’s Unit Registrar, Boardroom Corporate & Advisory Services Pte Ltd, 50 Raffles
Place #32-01, Singapore Land Tower, Singapore 048623, not less than 72 hours before the time appointed for
holding the meeting.
eXpLanatorY note:
Resolution 3
The Ordinary Resolution 3 above, if passed, will empower the Manager from the date of this Annual General Meeting
until the earliest of (i) the conclusion of the next Annual General Meeting of FCT or (ii) the date by which the next Annual
General Meeting of FCT is required by the applicable laws and regulations or the Trust Deed to be held, whichever is
earlier, or (iii) the date on which such authority is revoked or varied by the Unitholders in a general meeting, to issue
Units and to make or grant instruments (such as securities, warrants or debentures) convertible into Units and issue
Units pursuant to such instruments, up to a number not exceeding 50% of the total number of issued Units (excluding
treasury Units, if any), with a sub-limit of 20% for issues other than on a pro rata basis to Unitholders.
For the purpose of determining the aggregate number of Units that may be issued, the percentage of issued Units
will be calculated based on the total number of issued Units at the time Ordinary Resolution 3 above is passed, after
adjusting for new Units arising from the conversion or exercise of any Instruments which are outstanding at the time
this Resolution is passed and any subsequent bonus issue, consolidation or subdivision of Units.
Fund raising by issuance of new Units may be required in instances of property acquisitions or debt repayments. In
any event, if the approval of Unitholders is required under the Listing Manual of the SGX-ST and the Trust Deed or any
applicable laws and regulations in such instances, the Manager will then obtain the approval of Unitholders accordingly.
Resolution 4
In connection with the amendments to the Companies Act, Chapter 50 of Singapore (the “Companies act”), companies
are allowed to send notices and documents electronically to their shareholders with the express, deemed or implied
consent (the “Deemed Consent regime” and the “Implied Consent regime”, respectively) of the shareholders if the
constitution of the company provides for it and the specified modes of electronic communications are set out in
the constitution of the company (the “Companies act electronic Communications amendments”). The SGX-ST has
recently amended the listing rules of the SGX-ST (the “Listing rules”) to align the Listing Rules with the Companies Act
Electronic Communications Amendments, with issuers allowed to transmit certain types of notices and documents
to shareholders (or Unitholders, in the case of a listed real estate investment trust (“reIt”) like FCT) electronically with
express, deemed or implied consent of shareholders.
Although FCT is not bound by the Companies Act, it is nonetheless bound by the Listing Rules as a listed REIT. Accordingly,
the Manager proposes to amend the Trust Deed to adopt certain provisions of the Listing Rules to implement the
Implied Consent Regime and the Deemed Consent Regime and allow for such electronic transmission of notices and
documents in relation to FCT.
(See the Appendix in relation to the Proposed Electronic Communications Trust Deed Supplement for further details.)
FRAsERs CENTREPOiNT TRUsT
185
notICe oF annUaL GeneraL MeetInG
perSonaL Data prIvaCY:
By submitting an instrument appointing a proxy(ies) and/or representative(s) to attend, speak and vote at the Annual
General Meeting (“aGM”) and/or any adjournment thereof, a Unitholder (i) consents to the collection, use and disclosure
of the Unitholder’s personal data by the Manager and the Trustee (or their agents) for the purpose of the processing
and administration by the Manager and the Trustee (or their agents) of proxies and representatives appointed for the
AGM (including any adjournment thereof) and the preparation and compilation of the attendance lists, minutes and
other documents relating to the AGM (including any adjournment thereof), and in order for the Manager and the
Trustee (or their agents) to comply with any applicable laws, listing rules, regulations and/or guidelines (collectively,
the “purposes”), (ii) warrants that where the Unitholder discloses the personal data of the Unitholder’s proxy(ies) and/
or representative(s) to the Manager and the Trustee (or their agents), the Unitholder has obtained the prior consent
of such proxy(ies) and/or representative(s) for the collection, use and disclosure by the Manager and the Trustee (or
their agents) of the personal data of such proxy(ies) and/or representative(s) for the Purposes, and (iii) agrees that the
Unitholder will indemnify the Manager and the Trustee (or their agents) in respect of any penalties, liabilities, claims,
demands, losses and damages as a result of the Unitholder’s breach of warranty.
Important notice
the value of Units and the income derived from them, if any, may fall or rise. Units are not obligations of, deposits in,
or guaranteed by, the Manager or any of its affiliates. an investment in Units is subject to investment risks, including
the possible loss of the principal amount invested.
Investors should note that they have no right to request the Manager to redeem or purchase their Units for so long
as the Units are listed on the SGX-St. It is intended that Unitholders may only deal in their Units through trading on
the SGX-St. the listing of the Units on the SGX-St does not guarantee a liquid market for the Units.
the past performance of FCt is not necessarily indicative of the future performance of FCt.
186 ANNUAL REPORT 2017
FraSerS CentrepoInt trUSt
(CONSTITUTED IN THE REPUBLIC OF SINGAPORE
PURSUANT TO A TRUST DEED DATED 5 JUNE 2006
(AS AMENDED AND RESTATED))
proXY ForM
annUaL GeneraL MeetInG
IMportant
1. A relevant intermediary may appoint more than two proxies
to attend the Annual General Meeting and vote (please see
Note 2 for the definition of “relevant intermediary”).
2. This Proxy Form is not valid for use by CPF Investors and
shall be ineffective for all intents and purposes if used or is
purported to be used by them.
3. pLeaSe reaD tHe noteS to tHe proXY ForM.
perSonaL Data prIvaCY
By submitting an instrument appointing a proxy(ies) and/or
representative(s), the unitholder accepts and agrees to the
personal data privacy terms set out in the Notice of Annual
General Meeting dated 22 December 2017.
I/We
(Name)
(NRIC/Passport Number)
of
being a unitholder/unitholders of Frasers Centrepoint Trust (“FCt”), hereby appoint:
(Address)
name
address
nrIC/passport
number
proportion of
Unitholdings (note 2)
no. of Units
%
and/or (delete as appropriate)
name
address
nrIC/passport
number
proportion of
Unitholdings (note 2)
no. of Units
%
or failing the person, or either or both of the persons, referred to above, the Chairman of the Annual General Meeting as
my/our proxy/proxies to attend and to vote for me/us on my/our behalf at the Annual General Meeting of FCT to be held
at 10.00 a.m. on Tuesday, 23 January 2018 at Level 2, Alexandra Point, 438 Alexandra Road, Singapore 119958, and any
adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the resolutions to be proposed at the Annual
General Meeting as indicated hereunder. If no specific direction as to voting is given, the proxy/proxies may vote or abstain
from voting at his/her/their discretion, as he/she/they may on any other matter arising at the Annual General Meeting.
no. reSoLUtIonS reLatInG to:
roUtIne BUSIneSS
To receive and adopt the Trustee’s Report, the Statement by the Manager and the
Audited Financial Statements of FCT for the financial year ended 30 September 2017
To re-appoint KPMG LLP as Auditors of FCT to hold office until the conclusion of the
next Annual General Meeting, and to authorise the Manager to fix their remuneration
SpeCIaL BUSIneSS
To authorise the Manager to issue Units and to make or grant convertible instruments
To approve the Proposed Electronic Communications Trust Deed Supplement.
1.
2.
3.
4.
no. of votes
For*
no. of votes
against*
*
Voting will be conducted by poll. If you wish to exercise all your votes “For” or “Against” the relevant resolution, please tick (ü) within the relevant box provided.
Alternatively, if you wish to exercise your votes for both “For” and “Against” the relevant resolution, please indicate the number of Units in the boxes provided.
Dated this
day of
2017/2018
Signature(s) of Unitholder(s)/Common Seal
IMportant: pLeaSe reaD noteS to tHe proXY ForM
total number of Units held (note 5)
fold and seal here
IMportant: pLeaSe reaD tHe noteS to proXY ForM BeLoW
notes to proxy Form
1. A Unitholder who is not a relevant intermediary entitled to attend and vote at the meeting is entitled to appoint not more than two proxies to attend and vote
instead of the Unitholder. A proxy need not be a Unitholder. Where a Unitholder appoints more than one proxy, the appointments shall be invalid unless the
Unitholder specifies the proportion of the Unitholder’s holdings (expressed as a percentage of the whole) to be represented by each proxy.
2. A Unitholder who is a relevant intermediary entitled to attend and vote at the meeting is entitled to appoint more than two proxies to attend and vote
instead of the Unitholder, but each proxy must be appointed to exercise the rights attached to a different Unit or Units held by such Unitholder. Where such
Unitholder appoints more than two proxies, the appointments shall be invalid unless the Unitholder specifies the number of Units in relation to which each
proxy has been appointed.
“Relevant intermediary” means:
(a) a banking corporation licensed under the Banking Act, Chapter 19 of Singapore or a wholly-owned subsidiary of such a banking corporation, whose
business includes the provision of nominee services and who holds Units in that capacity;
(b) a person holding a capital markets services licence to provide custodial services for securities under the Securities and Futures Act, Chapter 289 of
Singapore and who holds Units in that capacity; or
(c) the Central Provident Fund Board (“CpF Board”) established by the Central Provident Fund Act, Chapter 36 of Singapore, in respect of Units purchased
under the subsidiary legislation made under that Act providing for the making of investments from the contributions and interest standing to the credit
of members of the Central Provident Fund, if the CPF Board holds those Units in the capacity of an intermediary pursuant to or in accordance with that
subsidiary legislation.
3. The instrument appointing a proxy or proxies (a form is enclosed) must be deposited with the company secretary of the Manager at the office of FCT’s Unit
Registrar, Boardroom Corporate & Advisory Services Pte Ltd, 50 Raffles Place #32-01, Singapore Land Tower, Singapore 048623, not less than 72 hours before
the time appointed for holding the meeting.
4. Completion and return of this instrument appointing a proxy or proxies shall not preclude a Unitholder from attending and voting at the meeting. Any
appointment of a proxy or proxies shall be deemed to be revoked if a Unitholder attends the meeting in person, and in such event, the Manager reserves the
right to refuse to admit any person or persons appointed under this instrument of proxy, to the meeting.
5. A Unitholder should insert the total number of Units held. If the Unitholder has Units entered against the Unitholder’s name in the Depository Register
maintained by the Central Depository (Pte) Limited (“CDp”), the Unitholder should insert that number of Units. If the Unitholder has Units registered in the
Unitholder’s name in the Register of Unitholders of FCT, he should insert that number of Units. If the Unitholder has Units entered against his name in the said
Depository Register and registered in the Unitholder’s name in the Register of Unitholders, the Unitholder should insert the aggregate number of Units. If no
number is inserted, this form of proxy will be deemed to relate to all the Units held by the Unitholder.
6. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where the instrument
appointing a proxy or proxies is executed by a corporation, it must be executed either under its common seal or under the hand of its attorney or a duly
authorised officer. A corporation which is a Unitholder may authorise by resolution of its directors or other governing body such person as it thinks fit to act as
its representative at the Meeting and the person so authorised shall upon production of a copy of such resolution certified by a director of the corporation to be
a true copy, be entitled to exercise the powers on behalf of the corporation so represented as the corporation could exercise in person if it were an individual.
7. Where an instrument appointing a proxy or proxies is signed on behalf of the appointor by an attorney, the power of attorney or a duly certified copy thereof
must (failing previous registration with the Manager) be lodged with the instrument of proxy, failing which the instrument may be treated as invalid.
8. The Manager shall be entitled to reject a Proxy Form which is incomplete, improperly completed or illegible or where the true intentions of the appointor
are not ascertainable from the instructions of the appointor specified on and/or attached to the Proxy Form. In addition, in the case of Units entered in the
Depository Register, the Manager may reject a Proxy Form if the Unitholder, being the appointor, is not shown to have Units entered against the Unitholder’s
name in the Depository Register as at 72 hours before the time appointed for holding the meeting, as certified by CDP to the Manager.
fold here
Affix
Postage
Stamp
The Company Secretary
Frasers Centrepoint Asset Management Ltd.
(as manager of Frasers Centrepoint Trust)
c/o Boardroom Corporate & Advisory Services Pte Ltd
50 Raffles Place #32-01
Singapore Land Tower
Singapore 048623
Corporate InformatIon
fraSerS CentrepoInt trUSt
registered address
HSBC Institutional Trust Services (Singapore) Limited
21 Collyer Quay #13-02, HSBC Building
Singapore 049320
Website address: www.fct.sg
trUStee
HSBC Institutional Trust Services (Singapore) Limited
21 Collyer Quay #03-01, HSBC Building
Singapore 049320
Phone: (65) 6658-6667
aUDItor
KPMG LLP
Partner-in-charge: Ms Karen Lee Shu Pei
Appointed 21 January 2016
16 Raffles Quay, #22-00 Hong Leong Building
Singapore 048581
Phone: (65) 6213-3388
Fax: (65) 6225-0984
Website address: www.kpmg.com.sg
BanKerS
Citibank N.A.
DBS Bank Ltd
Oversea-Chinese Banking Corporation Ltd
UnIt reGIStrar
Boardroom Corporate & Advisory Services Pte Ltd
50 Raffles Place, #32-01 Singapore Land Tower
Singapore 048623
Phone: (65) 6536-5355
Fax: (65) 6536-1360
tHe manaGer
registered address
Frasers Centrepoint Asset Management Ltd
438 Alexandra Road, #21-00 Alexandra Point
Singapore 119958
Phone: (65) 6276-4882
Fax: (65) 6272-8776
DIreCtorS of tHe manaGer
mr philip eng Heng nee
Chairman, Non-Executive (Non-Independent)
Dr Chew tuan Chiong
Chief Executive Office (Non-Independent)
Dr Cheong Choong Kong
Non-Executive (Lead Independent Director)
mr Ho Chai Seng
Non-Executive (Independent)
mr Simon Ho Chee Hwee
Non-Executive (Independent)
mr Soh Kim Soon
Non-Executive (Independent)
mr Christopher tang Kok Kai
Non-Executive (Non-Independent)
aUDIt CommIttee
Mr Ho Chee Hwee, Simon (Chairman)
Dr Cheong Choong Kong
Mr Philip Eng Heng Nee
Mr Ho Chai Seng
Mr Soh Kim Soon
nomInatInG anD remUneratIon CommIttee
Mr Soh Kim Soon (Chairman)
Dr Cheong Choong Kong
Mr Ho Chai Seng
Mr Ho Chee Hwee, Simon
Mr Christopher Tang Kok Kai
CompanY SeCretarY
Ms Catherine Yeo
FRASERS CENTREPOINT ASSET MANAGEMENT LTD.
As Manager of Frasers Centrepoint Trust
Company Registration Number: 200601347G
438 Alexandra Road
#21-00 Alexandra Point
Singapore 119958
Phone: +65 6276 4882
+65 6272 8776
Fax:
ir@fraserscentrepointtrust.com
Email:
w w w.fct.sg
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