Enhancing
Resilience
Annual Report 2019
A member of Frasers Property Group
Waterway Point
Contents
Annual Report 2019 1
Northpoint City North Wing
Overview
About Frasers Centrepoint Trust
Structure of FCT and
Organisation Structure of the Manager
Business Objectives and Growth Strategies
FY2019 Highlights
Key Events
5-Year Performance at a Glance
Unit Price Performance
Letter to Unitholders
Board of Directors
Trust Management Team
Property Management Team
Investor Relations
Business Review
Operations & Financial Review
Capital Resources
Retail Property Market Overview
2
3
4
6
7
8
10
12
16
20
21
22
26
34
36
Asset Portfolio
FCT Portfolio Overview
Causeway Point
Northpoint City North Wing and
Yishun 10 Retail Podium
Waterway Point
Changi City Point
Bedok Point
YewTee Point
Anchorpoint
Mall Directory
Investment in PGIM Real Estate
AsiaRetail Fund Limited
Investment in Hektar REIT
Risk Management, Sustainability Report
& Corporate Governance
Risk Management
Sustainability Report
Corporate Governance Report
Financial Information
Financial Statements
Other Information
Use of Proceeds
Statistics of Unitholdings
Additional Information
Notice of Annual General Meeting
Proxy Form
48
50
52
54
56
58
60
62
64
65
68
70
72
93
124
196
197
201
203
2 Frasers Centrepoint Trust
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$3.06 billion as at
30 September 2019.
FCT’s principal activity is to invest in income-producing
properties used primarily for retail purposes, in Singapore
and overseas. The primary objectives of FCT are to deliver
regular and stable distributions to its unitholders and
to achieve long-term capital growth, through a
combination of its organic, enhancement and acquisition
growth strategies.
FCT’s investment portfolio comprises seven quality
suburban malls in Singapore namely, Causeway Point,
Northpoint City North Wing (including Yishun 10 retail
podium), Waterway Point (40% interest), Changi City
Point, Bedok Point, YewTee Point and Anchorpoint.
FCT’s suburban malls are located in populous residential
precincts with good shopper catchment and connection
to public transport. The malls offer a wide range of
products and services as well as diverse dining options
which cater to the shoppers’ needs and enhance shopper
convenience. The malls enjoy high occupancy and steady
shopper traffic which underpin the stability of FCT’s
portfolio performance.
FCT holds 24.82% stake in PGIM Real Estate AsiaRetail
Fund Limited (“PGIM ARF”) through its wholly owned
subsidiary, FCT Holdings (Sigma) Pte. Ltd. as at 30
September 2019. PGIM ARF owns and manages five retail
malls (Tiong Bahru Plaza, White Sands, Hougang Mall,
Century Square and Tampines 1) and an office property
(Central Plaza) in Singapore and two retail malls in
Malaysia. FCT also owns a 31.15% equity stake in Hektar
Real Estate Investment Trust, which is listed on the Main
Market of Bursa Malaysia Securities Berhad.
FCT is managed by the Manager of FCT, Frasers
Centrepoint Asset Management Ltd., a real estate
management company and a wholly-owned subsidiary of
Frasers Property Limited.
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 the table 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.
Changi City Point
Annual Report 2019 3
Structure of
Frasers Centrepoint Trust
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
HSBC Institutional Trust
Services (Singapore)
Limited
Trustee
Fees
Ownership of Assets
Net Property Income
Property Manager
Frasers Property Retail
Management Pte Ltd.
Property
Management
Services
Property
Management
Fees
FCT Portfolio Properties
Causeway Point
Northpoint City North Wing,
including Yishun 10 retail podium
Waterway Point (40% stake)
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, Risk and Compliance Committee
Chief Executive Officer
Asset Management
Finance
Investments
Investor Relations
4 Frasers Centrepoint Trust
Business Objectives
and Growth Strategies
FCT is a real estate investment trust
set up to own and 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.
FCT’s objectives are to deliver
regular and stable distributions to
unitholders of FCT (“Unitholders”)
and to achieve long-term growth in
its net asset value, so as to provide
Unitholders with competitive rate of
return for their investments.
Frasers Centrepoint Asset
Management Ltd. (“FCAM”), the
Manager of FCT, sets the strategic
direction for FCT and this includes
making recommendations to
HSBC Institutional Trust Services
(Singapore) Limited, as the Trustee of
FCT, on acquisitions, divestments and
enhancement of assets. FCAM also
oversees the overall management
of FCT’s portfolio of investment
properties, including the capital and
risk management.
FCT’s growth strategies comprise
three growth drivers - acquisition
growth, enhancement growth and
organic growth.
FCAM adopts prudent capital and risk
management strategies in its course
of business:
Capital Management
FCAM continues to maintain a
prudent financial structure and
adequate financial flexibility to
ensure that it has access to capital
resources at competitive cost.
FCAM proactively manages FCT’s
cash flows, financial position, debt
maturity profile, costs of capital,
interest rates exposure and overall
liquidity position.
Risk Management
Effective risk management is a
fundamental part of FCT’s business
management. Key risks, mitigating
measures and management actions
are continually identified, 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.
Acquisition Growth
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
diversification. The acquisition
opportunities include Sponsor’s
pipeline assets and 3rd party assets,
in Singapore and overseas.
Enhancement Growth
This includes change of configuration
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.
Organic Growth
Active lease management to
achieve positive rental reversions,
maintaining healthy portfolio
occupancy to provide steady rental
growth.
Annual Report 2019 5
Changi City Point
6 Frasers Centrepoint Trust
FY2019
Highlights
Gross Revenue
S$196.4 million
+1.6% year-on-year
FCT reported gross revenue of S$196.4 million in FY2019,
up 1.6% compared with FY2018. This is also a new high
for FCT since its inception in 2006. Excluding non-cash
accounting adjustments , the underlying revenue was
up 2.4% year-on-year to $197.7 million. Northpoint
City North Wing and Changi City Point were the main
contributors to the revenue increase with improved
occupancy. Causeway Point saw a slight dip of 0.3%
in revenue due to the impact from the ongoing asset
enhancement works for the underground pedestrian link.
The remaining malls saw slight increase in revenue year-
on-year.
Net Property Income
$139.3 million
+1.5% year-on-year
Net Asset Value and Net Tangible Asset per Unit
$2.21
+6.3% year-on-year
Despite an enlarged equity base subsequent to new
equity issuance in connection with the equity fund raising
during the year, FCT’s NAV and NTA as at 30 September
2019 of $2.21 per unit2 is 6.3% higher than the $2.08 a
year ago. The increase was attributed to revaluation gain
of the portfolio properties, investments in PGIM Real
Estate AsiaRetail Fund Limited and Sapphire Star Trust
(which owns Waterway Point).
Gearing Level
32.9%
FCT continues to maintain a healthy gearing level at
32.9%3, which is below the average gearing level of 34.8%
for the Singapore REIT sector.
FCT reported Net property income (NPI) of S$139.3
million in FY2019, a new high. The FY2019 NPI was
1.5% higher compared with FY2018. Excluding non-
cash accounting adjustments1, the underlying NPI was
up 2.7% year-on-year to $140.6 million. All properties
except Anchorpoint registered higher NPI compared with
FY2018. Anchorpoint saw a 2.9% decrease in NPI due to
higher property expenses during the year.
Distribution per Unit
12.07 cents
+0.5% year-on-year
Total distribution per unit (DPU) for FY2019 was 12.07
cents, which is 0.5% higher than the 12.015 cents DPU in
FY2018. This is also the thirteen-consecutive year of DPU
growth since FCT’s listing.
Appraised Value
of Investment Properties
S$2.85 billion
+3.5% year-on-year
The aggregate value of FCT’s property portfolio stood at
S$2,846 million as at 30 September 2019, which is $97
million or 3.5% higher compared with S$2,749 million as
at 30 September 2018. The increase was mainly driven
by higher valuation achieved by Causeway Point, which
registered S$80 million in property valuation gain. The
remaining properties maintained or saw marginal increase
in their respective valuations.
DPU Yield
4.4%
Based on the DPU of 12.07 cents for FY2019 and the
closing price of S$2.74 on 30 September 2019, the DPU
yield of FCT stood at 4.4%, which is 266 basis points above
the Singapore Government 10-year bond yield of 1.74%4.
1
2
3
4
Relating to FRS 116 and 109 accounting adjustments.
Included the distribution to be paid for the last quarter of the financial year 2019.
In accordance with the Property Funds Appendix, the gearing ratio included FCT’s proportionate share (40%) of deposited property value and borrowings in
Sapphire Star Trust (which owns Waterway Point).
Source: Bloomberg
Annual Report 2019 7
• 2Q19 results announcement:
• FCT held its EGM on 28 June
Key
Events
2018
October 2018
• FCT announced its FY2018
financial results and its full year
DPU hits new high at 12.015 cents
2019
January 2019
• FCT held its 10th Annual General
Meeting on 21 January 2019 and
all resolutions proposed were
duly passed
• 1Q19 results announcement:
1Q19 DPU up 0.7% year-on-year
to 3.02 cents
• CEO Dr Chew Tuan Chiong
expressed his intention to retire
before the end of 2019
2Q19 DPU up 1.2% year-on-year
to 3.137 cents
• Completion of the acquisition of
shares in the PGIM ARF on 5 and
26 April 2019 pursuant to the
announcements in February and
March 2019
May 2019
• Announced the proposed
acquisition of 331/3% interest in
Waterway Point from a wholly-
owned subsidiary of Frasers
Property Limited for a total outlay
of S$440.6 million
• Launched the Equity Fund
Raising (“EFR”) by way of
private placement (“Private
Placement”) and a pro rata
non-renounceable preferential
offering (“Preferential Offering)
to raise gross proceeds of no
less than approximately S$421.7
million. The Private Placement
drew strong demand from new
and existing institutional and
other accredited investors and
was 2.3 times subscribed at the
top end of the issue price range
of between S$2.30 and S$2.382.
The upsize option was exercised
in full to raise total proceeds of
approximately S$369.6 million
February 2019
• Announced the proposed
acquisition of 17.13% shares in
PGIM Real Estate AsiaRetail Fund
Limited (“PGIM ARF”) for S$342.5
million
• Launch of the Preferential
Offering (issue price at S$2.35 per
Preferential Offer new unit) and
the despatch of the Instruction
Booklet to eligible Unitholders
March 2019
• Announced the proposed
acquisition of a further 1.67%
shares in PGIM ARF for S$33.5
million to bring FCT’s total stake
in PGIM ARF to 18.8%
April 2019
• Mr Richard Ng appointed the CEO-
designate of FCAM, the Manager
of FCT
June 2019
• Announced that the Preferential
Offering was 196.8% subscribed
and it raised gross proceeds of
approximately S$67.7 million.
Together with the gross proceeds
of approximately S$369.6
million raised from the Private
Placement, gross proceeds of a
total of approximately S$437.4
million were raised from
the EFR
2019 and the ordinary resolution
to approve the acquisition of
a 331/3% interest in Waterway
Point from an interested person
(subsidiary of Frasers Property
Limited) was duly passed
July 2019
• Richard Ng took over as CEO of
FCAM on 1 July from Dr Chew
Tuan Chiong who retired as CEO
and Executive Director
• Announced the increase of the
share in PGIM ARF from 18.8%
to 21.13% subsequent to
shareholders’ redemption in PGIM
ARF on 30 June 2019
• 3Q19 results announcement:
3Q19 distributable income up
12.4% year-on-year
September 2019
• Announced and completed the
acquisition of an additional 62/3%
interest in Waterway Point for
a total outlay of S$89.6million
to raise FCT’s total stake in
Waterway Point to 40%
• Announced that FCT will be
included in the FTSE EPRA/NAREIT
Global Real Estate Index Series
(Global Developed Index) with
effect from 23 September 2019
• Announced the appointment
of Ms Koh Choon Fah as non-
executive and independent
director, a member of the
Audit, Risk and Compliance
Committee and the Nominating
and Remuneration Committee of
FCAM, with effect from
1 October 2019
Subsequent Events
October 2019
• Announced the increase of the
share in PGIM ARF from 21.13%
to 24.82% subsequent to
shareholders’ redemption in PGIM
ARF on 30 September 2019
• 4Q19 results announcement:
4Q19 DPU up 1.8% year-on-year
to 2.913 cents
8 Frasers Centrepoint Trust
5-Year Performance
At A Glance
Revenue
(S$ Million)
189.2
Net Property Income
(S$ Million)
196.4
193.3
139.3
137.2
183.8
181.6
131.0
129.9
129.6
FY2015
FY2016
FY2017
FY2018
FY2019
FY2015
FY2016
FY2017
FY2018
FY2019
Distribution Per Unit
(S cents)
Net Asset Value per Unit
(S$)
12.015
12.070
11.900
11.764
11.608
2.21
2.08
2.02
1.91
1.93
FY2015
FY2016
FY2017
FY2018
FY2019
FY2015
FY2016
FY2017
FY2018
FY2019
Total Assets
(S$ Million)
Gearing
(%)
3610.9
2548.7
2594.5
2750.9
2840.4
28.2%
28.3%
29.0%
28.6%
32.9%1
FY2015
FY2016
FY2017
FY2018
FY2019
FY2015
FY2016
FY2017
FY2018
FY2019
1
In accordance with Property Funds Appendix, the gearing ratio included FCT’s proportionate share (40%) of deposited property value and borrowings in
Sapphire Star Trust (which owns Waterway Point).
Annual Report 2019 9
Distribution per Unit by Quarters
(S cents)
3.036
3.039
3.04
2.963
2.75
2.859
2.87
2.89
2.815
3.04
3.00
2.97
3.10
3.053
3.00
3.137
3.02
3.00
2.862
2.913
FY2015
Total DPU: 11.608 cents
FY2016
Total DPU: 11.764 cents
FY2017
Total DPU: 11.90 cents
FY2018
Total DPU: 12.015 cents
FY2019
Total DPU: 12.07 cents
n Q1
n Q2
n Q3
n Q4
Group
For the Financial Year ended 30 September
FY2015
FY2016
FY2017
FY2018
FY2019
Selected Income Statement and Distribution Data (S$‘000)
Gross Revenue
Net Property Income
Distributable Income
Selected Balance Sheet Data (S$ Million)
Total Assets
Total Borrowings
Net Assets
Value of Portfolio Properties1
Other Financial Indicators
Distribution per Unit (S cents)
Net Asset Value per Unit (S$)2
Ratio of Total Borrowings to Total Assets (Gearing)
Interest Coverage (Times)
189,242
131,043
106,412
183,816
129,852
108,101
181,595
129,558
110,615
193,347
137,186
111,316
196,386
139,283
118,718
2,548.7
718.0
1,754.5
2,464.0
2,594.5
734.0
1,775.6
2,509.0
11.608
11.764
1.91
28.2%
6.61
1.93
28.3%
7.33
2,750.9
798.0
1,872.2
2,668.1
11.90
2.02
29.0%
6.85
2,840.4
813.0
1,933.8
2,749.0
12.015
2.08
28.6%
6.25
3,610.9
1,042.0
2,471.0
2,846.0
12.070
2.21
32.9%3
5.74
Market Capitalisation (S$ million)
1,746.6
2,021.2
1,946.4
2,102.9
3,058.64
1
2
3
4
The investment properties are: Causeway Point, Northpoint City North Wing (including Yishun 10 retail podium), Anchorpoint, YewTee Point, Bedok Point
and Changi City Point. The 40%-interest in Waterway Point is held as investment in joint venture.
Included the distribution to be paid for the last quarter of the Financial Year.
In accordance with the Property Funds Appendix, the gearing ratio included cludes FCT’s proportionalte share (40%) of deposited property value and assets
and underlying borrowings (40%) in Sapphire Star Trust (which owns holds the retail property Waterway Point).
Based on total outstanding 1,116,284,043 issued units and FCT’s closing price of S$2.74 as at 30 September 2019.
10 Frasers Centrepoint Trust
Unit Price
Performance
Weaker regional equity markets amidst trade war;
slowing global economy and heightened geopolitical
risks
The regional equity markets in Asia saw weaker year-
on-year performance during the financial year in review
(between 1 October 2018 and 30 September 2019) as
the escalating trade war between the United States and
China; slowing global economy growth outlook; and
heightened geopolitical risks in the Middle East and in the
Korean Peninsula continued to exert negative pressure
on the markets. Japan’s Nikkei 225 index was down
9.8%, Hong Kong’s Hang Seng Index was down 6.1% and
Singapore’s FTSE Straits Times Index was down 4.2%. On
the other hand, bond yields and interest rates continued
to decline - the U.S. Federal Reserve cut interest rates
in October for the third time in 2019 and the European
Central Bank cut its benchmark interest rates to negative
territory in September 2019 in its attempt to further
stimulate the ailing eurozone economy.
Low interest rates benefitted REITs
The low interest rate environment and outlook has
benefitted yield-centric asset class such as REITs as
lower interest rates imply lower cost of debt to fund
property acquisitions for growth. It also saw increase in
share prices of REITs as yields compressed. In Singapore,
the benchmark FTSE REIT Index has delivered calendar
year-to-date total returns of 21.76%, much higher than
the Straits Times Index of negative 0.49% amidst strong
investor demand for SREITs.
FCT total returns outperformed the benchmark indices
Based on the closing price of S$2.74 on 30 September
2019, FCT delivered 20.8% in capital appreciation and a
total return of 27.2% during the year under review, which
outperformed both the FTSE REIT Index (total return:
+21.8%) and the FTSE Straits Times Index (total return:
-0.49%). FCT closing unit price reached an all-time high of
S$2.85 on 5 September 2019, when FCT announced that
it will be included in the FTSE EPRA/NAREIT Global Real
Estate Index Series (Global Developed Index), a leading
global benchmark index for real estate investors, from
23 September 2019.
FCT’s total and free-float market capitalisation improved
significantly
FCT’s total market capitalisation as at 30 September 2019
stood at S$3.06 billion, an increase of 45.7% year-on-year.
The increase in total market capitalisation was the result
of increase in FCT’s unit price and larger total issued unit
base following the Equity Fund Raising (“EFR“). FCT raised
approximately S$437.4 million from the EFR. Post the EFR,
the sponsor’s holding in FCT decreased to about 36% from
42% previously. Correspondingly, FCT’s free float market
capitalisation rose to approximately S$1.95 billion, up
60% from about S$1.22 billion a year ago.
Over longer time horizon, FCT delivered total return
of 46.56% and 91.96% over 3-year and 5-year periods,
respectively, outperforming both the FTSE Straits Times
Index and the FTSE REIT index.
Table: 1 Year FCT Unit price performance versus FTSE REIT Index and FTSE Straits Times index
Base=100
130
125
120
115
110
105
100
95
90
Oct’18
Nov’18
Dec’18
Jan’19
Feb’19 Mar’19
Apr’19 May’19
Jun’19
Jul’19
Aug’19
Sep’19
Source: Bloomberg
FCT Unit Price
120.7048
FTSE REIT Index
115.2197
Strait Times Index
95.7919
Annual Report 2019 11
1 Year
3 years
5 years
1 October 2018 to
30 September 2019
1 October 2016 to
30 September 2019
1 October 2014 to
30 September 2019
Price Change
%
Total Return1
%
Price Change
%
Total Return1
%
Price Change
%
Total Return1
%
FCT
FTSE REIT Index
FTSE Straits Times Index
20.81%
15.22%
-4.21%
27.20%
21.76%
-0.49%
24.66%
19.98%
8.73%
46.56%
43.28%
21.12%
45.49%
23.36%
-4.78%
91.96%
67.56%
13.99%
Source: Bloomberg
1 Assumes the distributions are reinvested.
FCT Monthly Trading Performance in FY2019
FCT’s trading volume and the unit closing price for each month in FY2019 is shown in the chart “Trading Performance
in FY2019”. The unit price increased from S$2.16 at the end of October 2018 to S$2.74 at the end of September 2019.
The highest closing price during this period was S$2.85 (on 5 September 2019) and the lowest closing price was S$2.14
(on 12 and 14 November 2018). The average daily trading volume in FY2019 was about 1.916 million units, which is a
substantial improvement from the 1.085 million units during same period in the previous year.
Trading Performance in FY2019
Closing Price as at the last trading day of the month
(S$)
n Total volume traded in the month
(million of units)
150
125
100
75
50
25
0
2.16
2.16
2.17
2.29
2.29
2.38
2.39
2.42
2.60
2.61
2.75
2.74
111.06
18.42
16.55
14.18
26.86
22.87
27.87
29.99
66.68
54.65
52.44
36.93
3.0
2.5
2.0
1.5
1.0
0.5
0.0
Oct’18
Nov’18
Dec’18
Jan’19
Feb’19
Mar’19
Apr’19 May’19
Jun’19
Jul’19
Aug’19
Sep’19
The table below shows the historical trading information of FCT units in the past five financial years.
Opening price (S$)
Closing price (S$)1
Highest closing price (S$)
Lowest closing price (S$)
Total volume traded (million Units)
Average daily trading volume (million units)
Market capitalisation2 (S$ billion)
FY2015
FY2016
FY2017
FY2018
FY2019
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
2.110
2.270
2.360
2.120
271.2
1.085
2.103
2.270
2.740
2.850
2.140
478.5
1.916
3.059
Source: Bloomberg
1
2
Based on the closing price as at the last trading day for the respective financial year.
Based on the closing price and issued Units as at the last trading day for the respective financial year.
Comparative Yields - FCT offers attractive yield return
compared to other investments
FCT’s distribution per unit (DPU) yield stood at 4.40%1
as at 30 September 2019, this is higher compared to
the yields of the FTSE Straits Times Index, CPF Ordinary
Account interest rate, the 12-month fixed deposit rate and
the 5 & 10-year Singapore Government Bond yields. FCT’s
DPU yield spread over the 10-year Government bond yield
is 276 basis points (FY2018: 280 basis points).
FCT Offers Attractive Yield Compared to Other Investments
4.50%
4.00%
2.50%
Yield spread of
276 basis points
1.74%
1.66%
0.57%
FCT
DPU Yield1
Straits
Times
Index
12-month
yield
CPF
Ordinary
Account
Interest
Rate
10-year
Singapore
Govern-
ment Bond
Yield
5-year
Singapore
Govern-
ment Bond
Yield
12-month
Singapore
Bank Fixed
Deposit
Rate
Sources: Bloomberg, Central Provident Fund (CPF) website
1
Based on the distribution per unit (DPU) of 12.07 cents for the period 1 October 2018 to 30 September 2019 and the closing Unit price of S$2.74
on 30 September 2019.
12 Frasers Centrepoint Trust
Letter to
Unitholders
Chairman Dr Cheong Choong Kong (right) and
Chief Executive Officer Mr Richard Ng (left)
Annual Report 2019 13
“
FCT’s consistent performance and stable
growth through economic cycles underscored
the resilience of its portfolio of suburban retail
properties, and our focus to deliver stable returns
and long-term growth to our Unitholders.
”
Dear Unitholders,
We are pleased to present Frasers Centrepoint Trust (“FCT” and the “Trust”)’s
Annual Report and Sustainability Report for the financial year ended
30 September 2019 (“FY2019”).
Strong FY2019 results, thirteenth consecutive year of DPU growth
FCT delivered a strong set of results in FY2019 underpinned by improved
performance across its portfolio properties, higher appraised valuation of
its portfolio and maiden contributions from investments in associates made
during the year.
Gross revenue rose 1.6% year-on-year to S$196.4 million and net property
income (“NPI”) was up 1.5% to S$139.3 million. Excluding non-cash
accounting adjustments1, the revenue and NPI year-on-year growth were
higher at 2.4% and 2.7%, respectively. The growth was achieved on improved
portfolio occupancy, higher rental income from step-up rent increases and,
improved performance led by Northpoint City North Wing and
Changi City Point.
Overall property expenses increased 1.7% to S$57.1 million, due mainly to
higher property tax expenses from Northpoint City North Wing and marketing
expenses, but partially offset by lower professional fees.
Total distributable income for FY2019 was up 6.6% to S$118.7 million, driven
by maiden contributions from FCT’s investments in associates PGIM Real Estate
AsiaRetail Fund (“PGIM ARF”), and in Sapphire Star Trust (“SST”) which holds
the interests in Waterway Point. Including the full distribution of retained cash
from previous years, total distribution to unitholders for FY2019 was S$119.6
million, up 7.5% from FY2018. Distribution per Unit (the “DPU”) for FY2019
was 12.07 cents and it is the thirteenth consecutive year of DPU growth since
FCT’s inception.
1
Refers to Financial Reporting Standards (FRS) 116 and 109 accounting adjustments which are non-
cash and do not affect distributable income.
14 Frasers Centrepoint Trust
Letter to Unitholders
Total assets as at 30 September 2019 stood at S$3,611
million, up 27% from S$2,840 million a year ago. The
increase was attributed to the new investments in PGIM
ARF and SST as well as the increase in the appraised value
of FCT property portfolio. Net asset value per unit rose
6.3% from S$2.08 to S$2.21.
shopper traffic compared with last year. Causeway Point,
Changi City Point and YewTee Point registered year-on-
year shopper traffic increases of 3.9%, 4.5% and 7.4%,
respectively, while the smaller malls Anchorpoint and
Bedok Point saw flat growth.
FCT’s consistent performance and stable growth through
economic cycles underscored the resilience of its portfolio
of suburban retail properties, and our focus to deliver
stable returns and long-term growth to our Unitholders.
The average rental reversion for the portfolio7 of 4.5%
was better than the 3.2% achieved the year before.
Portfolio tenants’ sales per square foot remained steady
compared with last year and average occupancy cost of
17.0% was slightly higher than 16.6% in FY2018.
Solid financial position amidst market volatilities
FCT’s financial position remains solid with gearing level
at 32.9%2 as at 30 September 2019, which is lower than
the average of about 35%3 in the REIT industry. The all-in
average cost of borrowings remained unchanged at 2.6%.
The U.S. Federal Reserve cut interest rates in October
for the third time in 2019, and Singapore interest rates
declined in tandem. The 3-month Singapore swap offer
rate (SOR), which is commonly used to price commercial
loans, reached 1.46% on 1 November, down from this
year’s high of 2% in March4. The benign interest rate
outlook should mitigate some concerns on the increase in
borrowing costs going forward. Notwithstanding
FCT’s strong financial position, we remain prudent in our
capital and risk management, and stay vigilant amidst
market volatilities.
Steady and healthy portfolio performance despite
sluggish retail market
The Singapore’s Retail Sales Index excluding motor
vehicle sales (the “RSI ex-motor”) since January this
year has been weaker than the same period last year5,
as the cautious economic outlook weighed on consumer
sentiments, particularly for trade sectors relating to
discretionary spending such as Furniture & Household
Equipment, Telecommunications Apparatus & Computers
and Watches & Jewellery6.
Despite the sluggish retail market in Singapore, FCT’s
portfolio of suburban malls continues to deliver steady
and healthy performance. The portfolio occupancy
improved from 94.7% to 96.5% as new tenants took up
more space at Northpoint City North Wing, Changi City
Point, Bedok Point and YewTee Point. Causeway Point
and Anchorpoint, however, registered lower occupancy,
the former due to ongoing asset enhancement works and
the latter to transitionary vacancy arising from tenant
changeover. Total shopper traffic rose 9.6% to reach
118.1 million. Northpoint City, which comprises the North
Wing owned by FCT and the South Wing owned by FCT’s
sponsor Frasers Property Limited, saw 16% increase in
Stable shopper catchment, strong focus on non-
discretionary spending and shopper experience, as well as
connectivity to public transport continue to underpin our
portfolio’s resilience and stable performance.
Investments in PGIM ARF and Waterway Point expand
FCT’s market share, set stage for future growth
During the year, FCT invested approximately S$910
million, the largest amount in its history, to acquire
significant stakes in PGIM ARF and Waterway Point. These
acquisitions are aligned to FCT’s investment strategy
to increase market share in the suburban retail sector,
expand and diversify income base and enhance total
returns to Unitholders.
FCT acquired the initial 18.8% stake in PGIM ARF over
two tranches for approximately S$380 million in April.
The stake was subsequently raised to 24.8% following
shareholder redemptions at PGIM ARF. Frasers Property
Limited holds a separate 63.1% stake in PGIM ARF8.
FCT announced on 16 May 2019 the acquisition of a
331/3% share in SST, the private trust that holds the
interest in Waterway Point, from Frasers Property Limited
for a total outlay of approximately S$440 million. The
stake in SST was subsequently increased to 40.0% after
FCT acquired an additional 62/3% for approximately S$89.6
million in September 2019 from one of the joint venture
shareholders of SST.
The acquisitions in PGIM ARF and Waterway Point were
financed by a combination of bank borrowings and gross
proceeds from the Equity Fund Raising (the “EFR”) which
was launched in May 2019. The EFR saw strong support
from investors and raised gross proceeds of S$437.4
million via a private placement and a non-renounceable
preferential offering completed on 17 May 2019 and 10
June 2019, respectively.
In accordance with Property Funds Appendix, the gearing ratio included FCT’s proportional share of deposited property value and borrowings in SST.
2
3 OCBC Investment Research, Weekly S-REITS Track, 11 November 2019.
4
5 Monthly Retail Sales and Food Beverage Service Indices, November 2019, Department of Statistics, Singapore. https://www.singstat.gov.sg/-/media/files/
“Sibor begins long-awaited slide; slips to 1.8% after hovering at 1.9-2% the past 10 months”, The Business Times, 6 November 2019
news/mrssep2019.pdf. Accessed: 12 November 2019
6 MARKETVIEW Singapore Q3 2019, CBRE Research, CBRE Ltd
7
8
Excluding Waterway Point for year-on-year comparability, as the stake in Waterway Point was acquired in FY2019.
Frasers Property Limited’s and FCT’s stake in PGIM ARF were acquired in separate transactions.
Annual Report 2019 15
The acquisitions in PGIM ARF and in Waterway Point are
strategic investments that fortify FCT as a leading player
in the Singapore suburban retail sector. They also play a
pivotal role in driving FCT’s future growth. FCT now has a
very strong pipeline of retail assets in Singapore to set the
stage for an exciting phase of growth.
We remain attentive to these external events and their
likely impact on capital markets, our business and
sources of funding, and we will take appropriate actions
where necessary. We believe FCT’s underlying business is
resilient and its strong financial position will help ensure
steady returns to our Unitholders and stakeholders.
Strong total unitholders’ return; inclusion in EPRA/
NAREIT index a milestone
FCT has delivered a strong total return that outperformed
the benchmark indices FTSE REIT Index and the FTSE
Straits Times Index. Total return of FCT during the review
period from 1 October 2018 to 30 September 2019 was
27.2%9, higher than the total return of 21.8% for FTSE
REIT Index and -0.5% for the FTSE Straits Times Index.
Over 3- and 5-year periods, FCT registered total returns of
46.6% and 92.0%, respectively, outperforming both the
FTSE REIT and the FTSE Straits Times indices.
FCT’s market capitalisation on 30 September 2019 of
S$3.06 billion was a 45.7% year-on-year increase, the
result of strong price appreciation and increase in total
issued units following completion of the EFR.
Another milestone during the year was the inclusion of
FCT as a constituent in the FTSE EPRA/NAREIT Global Real
Estate Index Series (Global Developed Index), from
23 September 2019. This index is a leading global
benchmark index for real estate investors and inclusion
in the index is a major step forward in extending FCT’s
outreach to global investors, raising its profile in global
investment markets.
Doing more for sustainability
The Board views sustainability as an integral part of FCT’s
business strategy. As part of the Frasers Property Group
(the “Group”), the management team works closely with
the Group’s sustainability leadership and working teams
to work towards carbon neutrality, achieve Green Mark
certification for our properties, and improve the health
and wellbeing of our people and stakeholders. Details are
outlined in the Sustainability Report which is an integral
part of this Annual Report.
Going forward
The Singapore economy continues to face headwinds as
global trade growth moderated further during the year
amidst trade tensions between the U.S. and China and
increased uncertainties from geopolitical instabilities.
The Ministry of Trade and Industry Singapore expects the
Singapore economy to grow by 0.5 per cent to 1 per cent
in 2019 and 0.5 per cent to 2.5 per cent in 202010.
For the next few years, we will continue to focus on
improving performance and growing our portfolio. Our
focus continues to be on Singapore and its suburban
retail sector.
Acknowledgements
Dr Chew Tuan Chiong retired as CEO and Executive
Director of FCAM on 1 July 2019. Tuan Chiong led FCT
through a decade of acquisitions and asset enhancement
initiatives which saw the Trust’s assets grow 86% from
S$1.52 billion in 2010 to S$2.84 billion, and its market
capitalisation double to over S$2 billion, a remarkable
journey that has been delivering DPUs ever higher every
year since inception. On behalf of the Board of Directors,
we express our thanks and appreciation to Tuan Chiong
for his leadership, dedication and contributions to FCT. The
Board wishes him all the best in his future endeavours.
In closing, we thank our Board members for the
stewardship and wisdom that have enabled the
Trust to grow from strength to strength. We would also
like to thank management and staff for their dedication
and relentless hard work, and our Unitholders,
business partners, tenants and shoppers for their
continued support.
Cheong Choong Kong
Chairman
Richard Ng
Chief Executive Officer
9
10
Source: Bloomberg. Total return includes the returns from price appreciation and distributions.
“Worst may be over, with better propsects for economy in 2020”, The Straits Times, 22 November 2019
16 Frasers Centrepoint Trust
Board of
Directors1
Dr Cheong Choong Kong
Chairman, Non-Executive and Independent Director
2
1
3
Mr Philip Eng Heng Nee
Non-Executive and Non-Independent Director
Mr Ho Chai Seng
Non-Executive and Independent Director
1 Unless otherwise stated, the information provided herein is as of 30 September 2019.
Annual Report 2019 17
1
Dr Cheong Choong Kong, 78
Chairman, Non-Executive and
Independent Director
2
Mr Philip Eng Heng Nee, 73
Non-Executive and
Non-Independent Director
3
Mr Ho Chai Seng, 59
Non-Executive and
Independent Director
Date of appointment as Director
18 May 2016
Date of appointment as Director
3 April 2006
Date of appointment as Director
30 June 2017
Length of service as Director
(as at 30 September 2019):
3 years 4 months
Length of service as Director
(as at 30 September 2019)
13 years 6 months
Length of service as Director
(as at 30 September 2019)
2 year 3 months
Board committees served on
• Audit, Risk and Compliance Committee
Board committees served on
• Audit, Risk and Compliance Committee
Board committees served on
• Nominating and Remuneration
(Member)
• Nominating and Remuneration
Committee (Member)
Academic & Professional Qualifications
• Bachelor of Science, Adelaide University
• Master of Science, Australian National
University
• Doctor of Philosophy, Australian
National University
• Doctor of Science (Honorary), Australian
National University
• Degree of Doctor of the University
(Honorary), Adelaide University
Present Directorships in other companies
as at 30 September 2019
Listed companies
• Nil
(Member)
Academic & Professional Qualifications
• Bachelor of Commerce in Accountancy,
University of New South Wales
• Chartered Accountant (Singapore)
Present Directorships in other companies
(as at 30 September 2019)
Listed companies
• Frasers Property Limited (Chairman
of Remuneration Committee and
Member of Audit, Risk and Compliance
Committee)
• PT Adira Dinamika Multi Finance, Tbk
(Commissioner)
Listed REITs/Trusts
• Hektar Asset Management Sdn
Committee (Chairman)
• Audit, Risk and Compliance Committee
(Member)
Academic & Professional Qualifications
• Bachelor of Commerce, University of
Windsor, Canada
• Member, Singapore Institute of Directors
• Member, International Bankers
Association of Japan
Present Directorships in other companies
(as at 30 September 2019)
Listed companies
• Nil
Listed REITs/Trusts
• Nil
Listed REITs/Trusts
• Nil
Others
• Director, RSVP Singapore
Major appointments (other than
Directorships)
• Chairman, NUS Mind Science Centre
Advisory Board
Past Directorships in listed companies held
over the preceding 3 years (from 1 October
2016 to 30 September 2019)
• Nil
Past major appointments
• Chairman, Oversea-Chinese Banking
Corporation
• Chairman, Singapore Broadcasting
Corporation
• Chairman, NUS Council
• Deputy Chairman and CEO Singapore
Airlines
Others
• Nil
Bhd, Manager of Hektar Real Estate
Investment Trust
Others
• Nil
Others
• ALPS Pte. Ltd. (fka Agency for Healthcare
Supply Chain Pte. Ltd.)
• Frasers Hospitality International Pte.
Ltd.
• Frasers Property Australia Pty Limited
• Transmex Systems International Pte. Ltd.
Major appointments (other than
Directorships)
• Ministry of Foreign Affairs: Singapore’s
Non-Resident High Commissioner to
Canada
Past Directorships in listed companies held
over the preceding 3 years (from 1 October
2016 to 30 September 2019)
• mDR Limited (Chairman)
• The Hour Glass Limited
Ezra Holdings Limited
•
Major appointments (other than
Directorships)
• Executive Director and Country
Manager, United Overseas Bank Ltd,
Tokyo Branch
Past Directorships in listed companies held
over the preceding 3 years (from 1 October
2016 to 30 September 2019)
• Frasers Property (UK) Limited
Past major appointment
• Vice President, BHF- Bank, New York
• Assistant General Manager, BHF-Bank,
Singapore
• General Manager, DBS Bank, London
• General Manager, United Overseas Bank
Ltd. London
• Executive Director, United Overseas
Bank Ltd. Singapore
Past major appointment
• Group Managing Director, Jardine Cycle
Others
• Nil
& Carriage Group
Others
• Nil
18 Frasers Centrepoint Trust
Board of Directors
5
4
6
Ms Koh Choon Fah
Non-Executive and Independent Director
Mr Ho Chee Hwee, Simon
Non-Executive and Independent Director
Mr Christopher Tang Kok Kai
Non-Executive and Non-Independent Director
Annual Report 2019 19
4
Mr Ho Chee Hwee, Simon, 582
Non-Executive and
Independent Director
5
Ms Koh Choon Fah, 613
Non-Executive and
Independent Director
6
Mr Christopher Tang Kok Kai, 58
Non-Executive and
Non-Independent Director
Date of appointment as Director
9 February 2017
Date of appointment as Director
1 October 2019
Date of appointment as Director
27 January 2006
Length of service as Director
(as at 30 September 2019):
2 year 7 months
Length of service as Director
(as at 30 September 2019)
-
Length of service as Director
(as at 30 September 2019)
13 years 8 months
Board committees served on
• Audit, Risk and Compliance Committee
Board committees served on
• Audit, Risk and Compliance Committee
Board committees served on
• Nominating and Remuneration
(Chairman)
(Member)
Committee (Member)
• Nominating and Remuneration
• Nominating and Remuneration
Committee (Member)
Committee (Member)
Academic & Professional Qualifications
• Bachelor of Science (Estate
Academic & Professional Qualifications
• Bachelor of Science (Estate
Management) (Honours), National
University of Singapore
• Master of Real Estate, National
University of Singapore
Present Directorships in other companies
(as at 30 September 2019)
Listed companies
• Nil
Listed REITs/Trusts
• Nil
Others
• Allgreen Properties Limited
• ALPS Pte. Ltd. (fka Agency for Healthcare
Supply Chain Pte. Ltd.)
• Frasers Hospitality International Pte.
Ltd.
Management) (Honours), National
University of Singapore
• Master of Art (Business Administration),
University of Georgia (Athens)/United
States of America
• Registered Salesperson, Council for
Estate Agencies
• Fellow, Royal Institute of Chartered
Surveyors
• Fellow, Singapore Institute of Surveyors
& Valuers
• Licensed Valuer, Inland Revenue
Authority of Singapore
Academic & Professional Qualifications
• Bachelor of Science, National University
of Singapore
• Master of Business Administration,
National University of Singapore
Present Directorships in other companies
(as at 30 September 2019)
Listed companies
• Nil
Listed REITs/Trusts
• Frasers Commercial Asset Management
Ltd., Manager of Frasers Commercial
Trust
Others
• Ren Ci Hospital
Present Directorships in other companies
(as at 30 September 2019)
Listed companies
• Nil
Major appointments (other than
Directorships)
• Chief Executive Officer, Singapore,
Frasers Property Limited
• MOH Holdings Pte Ltd (Member of Audit
& Risk Committee (as representative of
ALPS Pte Ltd)
Listed REITs/Trusts
• Nil
Major appointments (other than
Directorships)
• Nil
Past Directorships in listed companies held
over the preceding 3 years (from 1 October
2016 to 30 September 2019)
• Nil
Past major appointments
• Deputy CEO of CapitaMalls Asia Limited
(now known as CapitaLand Mall Asia
Limited)
• CEO of the Manager of CapitaMall Trust
(now known as CapitaLand Mall Trust)
Others
• Previously on the Board of directors
of the managers of CapitaLand Mall
Trust which is listed on the Singapore
Exchange Securities Trading Limited)
and CapitaLand Malaysia Mall Trust
(which is listed on Bursa Malaysia)
Others
• Edmund Tie & Company (SEA) Pte. Ltd.
• Edmund Tie & Company (Thailand) Co.,
Ltd.
• Edmund Tie & Company Hospitality
Management Services Pte. Ltd.
• Edmund Tie & Company Property
Management Services Pte. Ltd.
• Edmund Tie & Company Sdn. Bhd.
• Edmund Tie Holdings Pte Ltd
• ET Investment Holdings Pte Ltd
• ET Investment Management (Singapore)
Pte Ltd
• New Horizon Holdings Pte. Ltd.
• OrangeTee & Tie (JV) Pte. Ltd.
Major appointments (other than
Directorships)
• Chief Executive Officer, Edmund Tie &
Company (SEA) Pte Limited
Past Directorships in listed companies held
over the preceding 3 years (from 1 October
2016 to 30 September 2019)
• Nil
Past major appointments
• Chief Operating Officer, DTZ Debenham
Tie Leung (SEA) Pte Ltd (formerly known
as Edmund N.S. Tie & Company Pte. Ltd
Past Directorships in listed companies held
over the preceding 3 years (from 1 October
2016 to 30 September 2019)
Listed companies
• Nil
Listed REITs/Trusts
• Hektar Asset Management Sdn
Bhd, Manager of Hektar Real Estate
Investment Trust
Past major appointments
• Chief Executive Officer, Frasers
Centrepoint Commercial, Frasers
Centrepoint Limited
• Chief Executive Officer, China, Frasers
Centrepoint Limited
• Chief Executive Officer of Frasers
Centrepoint Asset Management Ltd, the
Manager of Frasers Centrepoint Trust
Others
• Previously worked with DBS Bank, DBS
Land and British Petroleum
2 With effect from 1 November 2019, Mr Ho Chee Hwee Simon relinquished his role as the chairman of the Audit, Risk and Compliance Committee
and remains as a non-executive and non-independent Director and a member of the Audit, Risk and Compliance Committee and the Nominating and
Remuneration Committee.
3 Ms Koh Choon Fah was appointed as a non-executive and independent Director, a member of the Audit, Risk and Compliance Committee and a member
of the Nominating and Remuneration Committee with effect from 1 October 2019. Ms Koh Choon Fah is appointed as the chairman of the Audit, Risk and
Compliance Committee with effect from 1 November 2019.
20 Frasers Centrepoint Trust
Trust Management
Team
From left to right: Mr Alex Chia, Mr Rene Lee, Ms Tay Hwee Pio, Mr Richard Ng, Mr Chen Fung Leng
Mr Richard Ng
Chief Executive Officer
Richard is responsible for the overall
business direction, investment
strategies and the operations of FCT.
He leads the FCAM management
team to ensure that FCT’s finance,
investment, asset management,
investor relations and other
plans and initiatives are executed
successfully.
Richard has 27 years of experience in
the Singapore and regional property
markets, spanning the areas of
marketing, investment, asset and
REIT management. Prior to joining
Frasers Property, he was Executive
Director, Asset Management, at
PGIM (Singapore) Pte. Ltd., where
he oversaw the asset management
of portfolio comprising retail and
commercial properties in Singapore
and Malaysia. Richard has held senior
management appointments during
his 14 years at the CapitaLand Group,
including 10 years at Capitaland
Mall Trust (CMT) where he was part
of the team that oversaw the initial
public offering of CMT in 2002. At
CMT, Richard was the Head of Asset
Management, responsible for overall
performance of CMT’s assets.
Richard holds a Bachelor of
Science (Honours) degree in Estate
Management and a Master of Science
degree in Real Estate, both from the
National University of Singapore.
Ms Tay Hwee Pio
Chief Financial Officer
Hwee Pio is responsible for the
financial, taxation, treasury and
compliance functions of Frasers
Centrepoint Trust. She has over
20 years of financial experience in
the real estate industry. Prior to
joining FCT, Hwee Pio was based
in Shanghai for 10 years, of which
she was the financial controller for
Frasers Property Limited’s business
operations in China since year 2006.
Before joining Frasers Property
Limited, Hwee Pio held financial
positions at Keppel Land and
Guocoland. She started her career as
an external auditor with KPMG.
Hwee Pio is a Singapore Chartered
Accountant (CA) with the Institute
of Singapore Chartered Accountants
and she is a Fellow with the
Association of Chartered Certified
Accountants.
Mr Alex Chia
Vice President, Asset Management
Alex leads the asset management
team and is responsible for
formulating and executing asset
enhancement strategies that
maximises value creation and
performance potential for the
properties in FCT’s portfolio. Alex’s
team works closely with the property
management team to enhance
the operational and financial
performance of each property.
Before heading the asset
management team, Alex was the
Head of Investment for 6 years,
responsible for the expansion of FCT’s
asset portfolio through strategic
acquisitions and investments.
Alex has over 9 years of business
development experience in serviced
residence industry covering the Pan
Asia market and 5 years of experience
in the areas of retail operations
and project planning. Alex holds
a bachelor’s degree in Business
Administration from National
University of Singapore and an
MBA from University of Hull, United
Kingdom.
Annual Report 2019 21
Mr Rene Lee
Vice President, Investment
Rene leads the investment team and
is responsible for sourcing, evaluating
and executing suitable investment
and divestment opportunities for
FCT to improve the quality of FCT’s
portfolio and increase distributions
to unit-holders. He has more than
10 years of experience investing in
different asset classes across Asia-
Pacific. Rene holds a Bachelor of
Applied Science (Honours) in Civil
Engineering from the University of
Toronto and a Master of Business
Administration from the University of
California, Berkeley.
Mr Chen Fung Leng
Vice President, Investor Relations
Fung Leng is responsible for FCT’s
investor relations function. He has
more than 10 years of experience
in the field of investor relations
and he is responsible for forging
relations and the communications
between FCT and its unitholders,
the investment community and
the media. He also provides
market intelligence and research
to the management team. Fung
Leng holds a Master of Science
degree in Industrial and Systems
Engineering and a bachelor’s degree
in Mechanical Engineering (Honours),
both degrees from the National
University of Singapore.
Property Management
Team
Ms Molly Lim
Senior Vice President, Head of
Retail Properties, Frasers Property
Singapore
Molly oversees the operations and
business processes of 9 retail malls
aggregating over 2 million square
feet of net lettable area within
the Frasers Property Singapore
retail business. She has 28 years
of experience in retail property
management and commercial
leasing. Prior to the current
appointment, Molly was Senior
Centre manager at Causeway Point
for 18 years. She led the pioneer
centre management team at the
mall and established the foundation
for the administrative and standard
operational procedures. She was
responsible for the operations and
management of the mall, including
tenancy and leasing management,
customer service, as well as the
implementation of retail policies
and strategic retail initiatives of
Frasers Property Group. She was
instrumental in the transformational
asset enhancement initiative (AEI)
works at Causeway Point which was
completed in 2012.
Molly holds a Bachelor of Social
Sciences (Honours) degree majoring
in Economics from the National
University of Singapore. She also
holds a Graduate Diploma in Business
Administration from the Singapore
Institute of Management.
Ms Jill Ng
Senior Vice President, Head of
Strategic Marketing, Digital &
Communications, Frasers Property
Singapore
Jill leads the strategic marketing,
digital and communications team at
Frasers Property Singapore, which
drives experiential marketing, loyalty
and digital initiatives for the retail
business unit while advocating the
continued refinement of customer
journeys. Across the Singapore
strategic business unit, which
comprises the residential, retail and
commercial divisions, she champions
corporate branding, internal
communications, public affairs, CRM
and the ongoing push towards a
seamless brand experience. Recent
team accolades include the Frasers
Tribal Quest which won the Best
Retail Event of the Year in Singapore
Retailers Association Awards 2018
and Frasers Galactic Passport which
won the Gold award for Emerging
Digital Technology from International
Council of Shopping Centers Gold
Award for Emerging Technology at
the 2017 ICSC Asia Pacific Awards
and a Silver Award from Community
Chest for continued community
investment.
Prior to joining Frasers Property,
she was part of the development
marketing team for a greenfield
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.
Ms Foo Chai Hong
Vice President, Head of Leasing,
Frasers Property Singapore
Chai Hong oversees the retail
function of 9 malls at Frasers
Property Singapore and she is
responsible for the leasing strategies
and lease management for the retail
group.
She has more than 15 years of
experience in leasing negotiations
and strategic lease planning in her
previous roles at CapitaLand Mall
Asia Limited, YTL Starhill Global
Property Management Limited and
APM Property Management.
Prior to joining Frasers Property, she
was part of the Group Leasing team
in AsiaMalls Management Pte Ltd
where she was responsible for the
marketing of the portfolio of malls.
She also spearheaded leasing plans
and marketing for the revamped
malls in the portfolio.
Chai Hong started her career
with Knight Frank Pte Ltd as a
property valuer and had worked in
various capacities at Jurong Town
Corporation and DBS Workplace
Solutions. She holds a bachelor’s
degree in Estate Management from
the National University of Singapore.
22 Frasers Centrepoint Trust
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
Singapore Exchange Securities Trading Ltd
(“SGX-ST”) website.
Annual General Meeting (AGM) and Extraordinary
General Meeting (EGM)
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 10th AGM on 21 January 2019. All
resolutions tabled at the AGM were duly passed. FCT
convened an EGM on 28 June 2019 to seek Unitholders’
approval for the sole ordinary resolution in relation to the
acquisition of a 331/3% interest in Waterway Point from an
interested person of FCT. The resolution was duly passed.
The voting for all resolutions at the AGM and EGM were
conducted via electronic polls the results of the polls
were announced on the SGX-ST 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 profile of FCT among investors. During
FY2019, the FCAM management team met with over 200
investors in Singapore and overseas through participation
in conferences; one-on-one meetings; investors’
roadshows; and various investor engagement events
organised by the securities firms, banks, SGX-ST and REIT
Association of Singapore (REITAS). 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
investor relations representative.
FCT was included in the FTSE EPRA/NAREIT Global
Real Estate Index Series (Global Developed Index), a
leading international benchmark for listed real estate
investments, with effect from 23 September 2019. This
marks a significant milestone in FCT’s growth journey.
The inclusion in the index enables FCT to reach out to the
larger pool of institutional investors, raises FCT’s profile
in the international investment community and further
improve FCT’s trading liquidity.
During FY2019, we participated in the following investor
relations activities:
Summary of investor relations activities
Singapore
Overseas
Investor Roadshows / Forums
Post-results investors’ events
Symposiums and seminars
Annual General Meeting
Extraordinary General Meeting
Total
5
8
2
1
1
17
5
0
0
0
0
5
Total
10
8
2
1
1
22
Annual Report 2019 23
Time Frame
Key Investor Relations Events
Date
Venue
1QFY19
1 October –
31 December 2018
Release of 4QFY18 and full year FY2018 results and post-
results analysts’ briefing
Post-results investors’ luncheon hosted by Maybank Kim
Eng
24 October 2018
Singapore
24 October 2018
Singapore
Non-Deal Roadshow hosted by UBS
26 November 2018
Amsterdam
UBS Global Real Estate CEO/CFO Conference
27 November 2018
London
2QFY19
1 January –
31 March 2019
DBS Pulse of Asia Conference 2019
10th Annual General Meeting
Release of 1QFY19 results and post- results analysts’
conference call
8 January 2019
21 January 2019
21 January 2019
Singapore
Singapore
Singapore
Post-results investors’ luncheon hosted by DBS
22 January 2018
Singapore
Non-Deal Roadshow hosted by BNP
25-26 February 2018
Hong Kong
3QFY19
1 April –
30 June 2019
Non-Deal Roadshow hosted by CLSA
9-10 April 20189
Tokyo
Release of 2QFY19 results and post-results analysts’
briefing
24 April 2019
Singapore
Post-results investors’ lunch hosted by JP Morgan
24 April 2018
Launch of Equity Fund Raising
ShareInvestor REIT Symposium 2019
Investor Roadshow by DBS/Citi/BNP
Investor Roadshow by DBS/Citi/BNP
Launch of Preferential Offering
Extraordinary General Meeting
4QFY19
1 July –
30 September 2019
Release of 3QFY19 results and post- results analysts’
conference call
Post-results investors’ luncheon hosted by UBS
Citi-REITAS-SGX C-Suite Singapore REITs and Sponsor
Forum 2019
16 May 2019
18 May 2019
21 May 2019
24 May 2019
30 May 2019
28 June 2019
23 July 2019
24 July 2019
22 August 2019
Singapore
Singapore
Singapore
Singapore
Hong Kong
Singapore
Singapore
Singapore
Singapore
Singapore
Macquarie ASEAN Conference 2019
26 August 2019
Singapore
HSBC - Singapore REITS Corporate Day
20 September 2019
Singapore
FCT is included in the EPRA/NAREITGlobal developed
market index
The Asia Pacific Best of The Breeds REITs Conference and
Awards
23 September 2019
-
26 September 2019
Singapore
24 Frasers Centrepoint Trust
Investor Relations
FCAM CEO Mr Richard Ng receiving the award from Professor Lam Khee Poh, Guest of Honour at the awards event, Dean of the School
of Design (SDE) and Environment, National University of Singapore.
Platinum Award
of the Best Retail
REIT (Singapore)
at Asia Pacific Best
of Breeds REITs
Accolade
FCT received the Platinum Award of the Best Retail REIT (Singapore) for
companies with more than US$1 Billion Market Capitalisation at the Asia
Pacific Best of Breeds REITs on 26 September 2019.
The award recognises companies and managers with the highest standards
and performance in the Asia Pacific REITs sector, based on attributes including
financial performance, market performance, corporate governance, quality
of portfolio and the REIT manager and risk management policies. This is the
second consecutive year FCT has received the Platinum Award for the Best
Retail REIT (Singapore).
Annual Report 2019 25
FY2020 Financial Calendar#
13 January 2020
Annual General Meeting
22 January 2020
1Q FY2020 Results Announcement
End February 2020
1Q FY2020 Distribution Payment
April 2020
2Q FY2020 Results Announcement
End May 2020
2Q FY2020 Distribution Payment
July 2020
3Q FY2020 Results Announcement
End August 2020
3Q FY2020 Distribution Payment
October 2020
4Q FY2020 Results Announcement
End November 2020
4Q FY2020 Distribution Payment
# Dates are indicative and are subject to change.
Enquiries
For general enquiries on FCT, please contact:
Mr Chen Fung Leng
Vice President, Investor Relations
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
Coverage by equity research houses
As at 30 September 2019, there
were 20 equity research firms which
provided equity research coverage
on FCT. BNP Paribas, which covered
FCT previously has discontinued its
equity research function in July 2019.
MorningStar initiated coverage on
FCT in September 2019.
The research firms which cover FCT
(in alphabetical order) are:
1. Bank of America-Merrill Lynch
2. CGS-CIMB Research
3. Citi Investment Research
4. CLSA
5. Credit Suisse
6. Daiwa Capital Markets
7. DBS Vickers Securities
8. HSBC
9. J.P. Morgan
10. KGI Securities (Singapore)
11. Macquarie
12. Maybank Kim Eng Research
13. Mizuho Securities Asia Limited
14. MorningStar*
15. OCBC Investment Research
16. Phillip Securities Research
(Singapore)
17. RHB
18. Soochow CSSD Capital Markets
(SCCM)
19. UBS
20. UOB Kay Hian Research
*
Initiated coverage on FCT in September 2019.
26 Frasers Centrepoint Trust
Operations
& Financial
Review
Portfolio Occupancy
as at 30 September 2019
96.5%
Portfolio Rental
Reversion
+4.8%
Waterway Point
Annual Report 2019 27
Operations
Review
Lease Renewals
A total of 313 leases were renewed in FY2019 (FY2018: 232). These leases accounted for 418,990 square feet or
28.9% of FCT’s portfolio net lettable area1 (the ‘‘NLA”). The average rental reversion of these renewals was positive
4.8%. Average rental reversion refers to the variance between the average rental rates of the renewed leases and the
preceding expired leases which were contracted typically 3 years ago. All malls, with the exception of Changi City Point
and Bedok Point, recorded positive rental reversions of between 0.9% and 7.4% for the year under review. The data for
Waterway Point, of which FCT owns a 40% interest, is included in the portfolio calculation.
Summary of Leases Renewed in FY2019
(Excluding newly-created and reconfigured area)
Property
Causeway Point
Northpoint City North Wing2
Waterway Point
Changi City Point
Bedok Point
YewTee Point
Anchorpoint
FCT Portfolio Average
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
74
29
124
33
13
21
19
313
150,905
26,407
148,097
29,591
21,307
17,100
25,583
418,990
36.2%
11.5%
39.9%
14.4%
25.8%
23.2%
36.0%
28.9%
7.4%
1.6%
5.1%
(1.4%)
(1.0%)
0.9%
2.2%
4.8%
Lease Expiry Profile
The portfolio lease expiry from FY2020 to FY2028 and the lease expiry by property in FY2020 are presented in tables
below. Our leases have an average lease duration of 3 years. Certain key or anchor tenants may be offered longer
tenures, depending on the lease structure.
The leases due in the next two years in FY2020 and FY2021 account for 35.7% and 26.9% of FCT’s Gross Rental Income
(the “GRI”), respectively. As at 30 September 2019, the weighted average lease expiry (the “WALE”1) of FCT portfolio
stood at 1.72 years by NLA and 1.57 years by GRI.
The WALE (By GRI) of the new leases entered during FY2019, based on duration to lease expiry as at 30 September 2019
was 2.46 years. The weighted average lease tenure (By NLA) of these new leases is 2.47 years. These new leases account
for 33.1% of the total GRI of FCT portfolio as at 30 September 2019.
The aggregate NLA of the leases in FCT portfolio, including that of Waterway Point, due for renewal in FY2020 is
457,060 square feet, of which 387,876 square feet or about 85% of this is attributed to the four larger malls - Causeway
Point, Waterway Point, Northpoint City North Wing (including Yishun 10 retail podium) and Changi City Point.
Portfolio Lease Expiry4 as at 30 September 2019
Number of leases expiring
312
280
248
25
4
1
FY2020
FY2021
FY2022
FY2023
FY2024
FY2028
Total
870
Leased area expiring (square feet)
457,060
358,075
420,199
128,942
11,765
21,248
1,397,289
Expiries as % of total leased area
Expiries as % of total GRI
32.7%
35.7%
25.6%
26.9%
30.1%
28.0%
9.2%
8.6%
0.9%
0.6%
1.5%
0.2%
100.0%
100.0%
Including Waterway Point, which FCT holds 40%-interest.
Includes Yishun 10 Retail Podium.
Computation of WALE is as follows:
1
2
3
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
Excluding vacancy
4
28 Frasers Centrepoint Trust
Operational Review
Lease Expiry4 for FY2020 as at 30 September 2019
Property
Causeway Point
Northpoint City North Wing and
Yishun 10 retail podium
Waterway Point
Changi City Point
Bedok Point
YewTee Point
Anchorpoint
Total FCT
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
70
92
56
40
13
15
26
131,181
87,640
95,245
73,810
26,863
20,271
22,050
312
457,060
32.5%
38.5%
26.2%
37.5%
33.9%
28.3%
39.3%
32.7%5
35.3%
46.1%
30.6%
34.4%
34.9%
26.6%
44.1%
35.7%6
5 As percentage of leased area of FCT portfolio, excluding vacancy, as at 30 September 2019.
6 As percentage of GRI of FCT portfolio for the month of September 2019, excluding gross turnover rent.
Portfolio Tenants’ Sales and Occupancy Cost
FCT’s portfolio tenants’ sales in FY2019, on a per square
foot basis and including Waterway Point, fell marginally
by 0.2% compared with FY2018. The slight dip in overall
tenant’s sales was mainly attributed to the lower sales
turnover at Causeway Point which saw partial closure
of the basement level to facilitate works related to the
underground pedestrian link. The malls that saw positive
tenant sales growth include Northpoint City North Wing,
Changi City Point and Waterway Point.
The average occupancy cost for FCT portfolio for the
12-month period between October 2018 and September
2019 stood at 17.0%, compared with 16.6% in FY2018.
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 FY2019 and the preceding 4
financial years is presented in the table below:
FCT Portfolio Occupancy Cost
16.6%
16.6%
17.0%
15.7%
15.3%
FY2015
FY2016
FY2017
FY2018
FY2019
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, 93.5% of the occupied leases
include Gross Turnover rent (the “GTO”) clauses, which the
tenants would pay between 0.5% and 1% of their sales as
part of the gross rent under the lease agreements.
Percentage of occupied leases with GTO and
Step-up Clauses
FY2018
FY2019
Increase/
(Decrease)
With GTO clause
94.3%
93.5% (0.7%-point)
With step-up clause
98.3%
97.8% (0.5%-point)
Portfolio Occupancy
The portfolio occupancy stood at 96.5%7 as at 30
September 2019, which is 1.8%-point higher compared
with 94.7% a year ago. The improvement in overall
portfolio occupancy is attributed to Northpoint City North
Wing (due mainly to Yishun 10 retail podium); Changi
City Point, Bedok Point and YewTee Point. The increase
in occupancy was partially offset by lower occupancy at
Causeway Point due to ongoing Underground Pedestrian
Link (UPL) works which is expected to complete in
December 2019. Occupancy at Anchorpoint was also
lower at 79.0%, compared to 88.8% a year ago, but the
pre-committed occupancy is at 95.4%.
7
Portfolio occupancy including pre-committed leases is 97.2%. Pre-committed refers to leases which have been confirmed or signed but have yet to
commence.
Annual Report 2019 29
The portfolio occupancy by property is shown in the table below.
Occupancy by Property
Causeway Point
Northpoint City North Wing and
Yishun 10 retail podium
Waterway Point9
Changi City Point
Bedok Point
YewTee Point
Anchorpoint
FCT Portfolio
As at 30 September 2018
As at 30 September 2019
Increase/ (Decrease)
98.4%
96.5%
-
93.8%
79.2%
94.3%
88.8%
94.7%
97.0%8
99.0%
98.0%
95.9%
95.7%
97.1%
79.0%
96.5%
(1.4)%-point
2.5%-point
n.m.
2.1%-point
16.5%-point
2.8%-point
(9.8)%-point
1.8%-point
Shopper Traffic
The total shopper traffic in FY2019 was 146.5 million (FY2018: 136.8 million), an increase of 7.1% year-on-year. The
three larger malls Causeway Point, Northpoint City and Changi City Point saw higher traffic of between 3.9% and 16.0%
compared to the same period last year. Northpoint City registered the highest improvement in shopper traffic of 16.0%,
due to the re-location of the bus interchange in early September 2019 which saw a significant increase in commuter
traffic passing through the mall en route to the bus interchange. The three smaller malls saw between flat and 2.4%
decline in shopper traffic due partially to the lower occupancy at these malls.
Shopper Traffic by Property (million)
FY2018
(1 Oct 2017 – 30 Sep 2018)
FY2019
(1 Oct 2018 – 30 Sep 2019)
Increase / (Decrease)
Causeway Point
Northpoint City10
Bedok Point
YewTee Point
Anchorpoint
Changi City Point
Waterway Point
FCT Portfolio
25.5
49.4
4.2
12.1
3.2
13.3
29.1
136.8
26.5
57.3
4.2
13.0
3.2
13.9
28.4
146.5
3.9%
16.0%
No change
7.4%
No change
4.5%
(2.4%)
7.1%
Trade Sector Analysis
FCT’s tenant classification comprises 12 trade sectors (FY2018: 11). We have made some changes to the classification of
several trade sectors to improve clarity and to better reflect the nature of the trades. These changes are as follow:
1. Food & Restaurants has been renamed Food & Beverage
2. Jewellery & Watches, previously being part of Fashion, is now a standalone trade sector.
3. Beauty, Hair, Cosmetics & Personal Care is combined with Health to form the Beauty & Health trade sector
4. The former Services/Education sector is separated into the respective trade sectors, Services and Education.
5. Supermarket is renamed Supermarket & Hypermarket
Food & Beverage continues to be the largest sector accounting for 31.5% of FCT’s total NLA, a 0.9%-point increase from
30.6% in FY2018. This sector is also the largest contributor to the portfolio in terms of GRI, accounting for 37.8% of total
GRI, slight increase from 37.2% a year ago. The increase was attributed to Bedok Point, which saw its proportion of NLA
for Food & Beverage increased to 33.7% from 23.5% and its proportion of GRI increased to 41.1% from 39.3%, compared
with FY2018.
The contribution from the second largest trade sector Fashion decreased year-on-year. The proportion of portfolio NLA
for Fashion decreased to 13.5% from 13.8% in FY2018, and proportion of portfolio GRI for Fashion decreased to 14.4%
from 14.9% in FY2018.
8 Occupancy is based on NLA of 416,332 square feet before completion of AEI.
9
10 Total shopper traffic for Northpoint City which comprises North Wing and South Wing. Shopper traffic for FY2018 was restated from 41.8 million to
FCT owns 40% interest in Waterway Point, the stake in the property was first acquired on 11 July 2019.
49.4 million for comparability to the FY2019 data that included additional counters in new ingresses and egresses of the property.
30 Frasers Centrepoint Trust
Operational Review
Trade Classifications
(by order of decreasing GRI)
Food & Beverage
Fashion
Beauty & Health
Services
Household
Supermarket & Hypermarket
Sports Apparel & Equipment
Leisure/ Entertainment
Jewellery & Watches
1
2
3
4
5
6
7
8
9
10 Books, Music, Art & Craft, Hobbies
11 Department Store
12 Education
13 Vacant
Total
As % of Total NLA
As % of Total GRI11
31.5%
13.5%
7.7%
4.8%
9.2%
7.1%
3.7%
6.4%
0.9%
3.7%
4.2%
3.7%
3.6%
37.8%
14.4%
11.3%
9.1%
7.1%
4.9%
2.9%
2.9%
2.7%
2.6%
2.5%
1.8%
0.0%
100.0%
100.0%
11 As percentage of GRI of FCT portfolio for the month of September 2019, excluding gross turnover rent.
Top 10 Tenants by GRI12
The top ten tenants collectively accounted for 21.1% of the total GRI as at 30 September 2019 (2018: 23.2%). Our
largest tenant NTUC Fairprice Co-operative, the operator of NTUC Fairprice supermarkets, NTUC Healthcare (Unity) and
NTUC Club in FCT malls, accounted for 3.2% of the portfolio GRI (2018: 1.8%).
Top 10 Tenants by GRI as at 30 September 2019
Tenant
Trade Sector
As % of Total NLA
As % of Total GRI
1
2
3
NTUC Fairprice Co-operative13
Supermarket & Hypermarket
Cold Storage Singapore (1983) Pte Ltd14
Supermarket & Hypermarket
Copitiam Pte Ltd15
4 Metro (Private) Limited16
Food & Beverage
Departmental Store
5
6
7
8
9
Courts (Singapore) Limited
Household
Koufu Pte Ltd
Food & Beverage
Cotton On Singapore
Fashion
Hanbaobao Pte Limited17
Food & Beverage
Uniqlo (Singapore) Pte Ltd
Fashion
10 Food Republic
Total (Top 10)
Food & Beverage
Includes leases for NTUC FairPrice Co-operative Ltd, NTUC Healthcare Co-operative Ltd and NTUC Club.
Includes the leases for Cold Storage supermarket, Guardian Pharmacy and 7-Eleven stores.
12 Based on GRI for the month of September 2019, excluding GTO.
13
14
15 Operator of Kopitiam food courts, includes Kopitiam and Bagus.
16
17 Operates McDonald’s outlets.
Includes the leases for Metro departmental store and Clinique Service Centre.
4.6%
3.4%
2.8%
4.2%
2.5%
2.2%
1.4%
0.9%
2.3%
1.2%
3.2%
3.0%
2.6%
2.5%
2.1%
2.0%
1.7%
1.4%
1.4%
1.2%
25.5%
21.1%
Annual Report 2019 31
Financial
Review
FCT’s investment property portfolio comprises Causeway Point; Northpoint City North Wing (including Yishun 10);
Changi City Point; Bedok Point; YewTee Point and Anchorpoint.
FCT holds 40%-interest in Sapphire Star Trust (“SST”) which owns the retail mall Waterway Point and approximately
24.82% interest in PGIM Real Estate AsiaRetail Fund Limited (“PGIM ARF”). PGIM ARF owns and manages five retail malls
(Tiong Bahru Plaza, White Sands, Hougang Mall, Century Square and Tampines 1) and an office property (Central Plaza)
in Singapore, and two retail malls in Malaysia. In addition, FCT also holds 31.15% of the units in Hektar Real Estate
Investment Trust (“H-REIT”) which owns a portfolio of six suburban malls in Malaysia. FCT’s interests in SST; PGIM ARF
and H-REIT are equity-accounted for at the Group level.
The tables presented below show the gross revenue, property expenses and net property income for FCT’s investment
property portfolio for FY2019 and FY2018.
Gross Revenue
Causeway Point
Northpoint City North Wing and Yishun 10
Changi City Point
Bedok Point
YewTee Point
Anchorpoint
Total
Property Expenses
Causeway Point
Northpoint City North Wing and Yishun 10
Changi City Point
Bedok Point
YewTee Point
Anchorpoint
Total
Net Property Income
Causeway Point
Northpoint City North Wing and Yishun 10
Changi City Point
Bedok Point
YewTee Point
Anchorpoint
Total
Yishun 10: Refers to the strata-titled units at Yishun 10 retail podium
FY2019
Oct 18 to Sep 19
S$’000
FY2018
Oct 17 to Sep 18
S$’000
Increase /(Decrease)
86,458
53,089
27,335
6,506
14,443
8,555
196,386
86,710
52,215
25,751
6,164
13,991
8,516
193,347
(0.3%)
1.7%
6.2%
5.5%
3.2%
0.5%
1.6%
FY2019
Oct 18 to Sep 19
S$’000
FY2018
Oct 17 to Sep 18
S$’000
Increase /(Decrease)
20,693
13,876
9,809
3,843
4,135
4,747
57,103
21,351
13,024
9,262
3,628
4,300
4,596
56,161
(3.1%)
6.5%
5.9%
5.9%
(3.8%)
3.3%
1.7%
FY2019
Oct 18 to Sep 19
S$’000
FY2018
Oct 17 to Sep 18
S$’000
Increase /(Decrease)
65,765
39,213
17,526
2,663
10,308
3,808
65,359
39,191
16,489
2,536
9,691
3,920
139,283
137,186
0.6%
0.1%
6.3%
5.0%
6.4%
(2.9%)
1.5%
32 Frasers Centrepoint Trust
Financial Review
Performance Comparison Between FY2019 and FY2018
Gross revenue for the year ended 30 September 2019 was S$196.4 million, an increase of S$3.0 million or 1.6% over the
corresponding period last year. It is mainly due to improvement in revenue from Northpoint City North Wing and Changi
City Point.
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 year, showed an average increase of 4.5% over the
expiring leases. Including the renewals at Waterway Point, the portfolio rental reversions was 0.3%-point higher at
4.8%.
Property expenses for the year ended 30 September 2019 totalled S$57.1 million, an increase of S$0.9 million or 1.7%
compared to the corresponding period last year. The increase was mainly due to higher property tax expenses from
Northpoint City North Wing and marketing expenses. It is partially offset by lower professional fees.
Hence, net property income was S$139.3 million, which was S$2.1 million or 1.5% higher than the corresponding period
last year.
Net non-property expenses of S$42.6 million was S$5.4 million higher than the corresponding period last year due to
higher borrowing costs from additional borrowings and higher interest rates and higher Manager’s management fees
arising from the increase in total assets and improvement in net property income. The increase is partially offset by
interest income on loan to joint venture and lower trust expenses.
Total return included:
(i) unrealised loss of S$1.0 million arising from fair valuation of interest rate swaps for the hedging of interest rate in
respect of S$188 million of the loans;
(ii) share of associates’ results from operations of S$12.7 million and from revaluation surplus of S$9.9 million;
(iii) share of joint ventures’ results of S$3.2 million and from revaluation surplus of S$3.3 million;
(iv) impairment loss on investment in joint venture of S$1.1 million;
(v) expenses in relation to acquisition of an associate and a joint venture of S$10.8 million; and
(vi) surplus on revaluation of the Properties of S$93.3 million.
Income available for distribution for the year ended 30 September 2019 was S$118.7 million, which was S$7.4 million
higher compared to the corresponding period in the preceding financial year.
Distribution
Income available for distribution for the year ended 30 September 2019 was S$118.7 million, which was 6.6%
higher compared to the last financial year. The higher distribution income is attributable to contributions from FCT’s
shareholding in PGIM ARF and in SST. Despite the enlarged equity units in issue after the equity fund raise, distribution
per unit for FY2019 grew 0.5% to 12.07 cents from 12.015 cents in the prior year. The breakdown and comparison of the
distribution per unit for FY2019 and FY2018 are presented below:
Distribution per Unit (cents)
Financial year ended 30 September
First quarter (1 October – 31 December)
Second quarter (1 January – 31 March)
Third quarter (1 April – 30 June)
Fourth quarter (1 July – 30 September)
Full Year (1 October – 30 September)
FY2019
3.020
3.137
3.000
2.913
12.070
FY2018
Increase / (Decrease)
3.000
3.100
3.053
2.862
12.015
0.7%
1.2%
(1.7%)
1.8%
0.5%
Annual Report 2019 33
Total Assets, Net Asset Value Per Unit and Net Tangible Asset Per Unit
As at 30 September 2019, the total assets of FCT stood at S$3,611 million, an increase of S$771 million from S$2,840
million a year ago. The increase was mainly attributable to a) investment in the 40%-interest in SST (which owns
Waterway Point); b) investment in the 21.13% interest in PGIM ARF; as well as c) revaluation surplus of S$93 million on
FCT’s investment properties.
FCT’s net assets stood at S$2,471 million as at 30 September 2019, an increase of S$537 million (+27.8%) compared
with S$1,934 million a year ago. Correspondingly, the net asset value (the “NAV”) and the net tangible asset (the “NTA”)
of FCT increased to S$2.21 per unit from S$2.08 a year ago.
As at
NAV and NTA per unit (S$)
30 September 2019
30 September 2018
2.21(a)
2.08(b)
(a) The number of units used for computation of NAV and NTA per unit as at 30 September 2019 is 1,117,509,051. This comprises:
(i) 1,116,284,043 units in issue as at 30 September 2019;
(ii) 373,973 units issued to the Manager in October 2019, in satisfaction of 35% of the base management fee payable to the Manager for the quarter
ended 30 September 2019; and
(iii) 851,035 units issued to the Manager in October 2019, in satisfaction of 20%, 20%, 55% and 35% of the performance management fee payable to the
Manager for the quarter ended 31 December 2018, 31 March 2019, 30 June 2019 and 30 September 2019 respectively.
(b) The number of units used for computation of NAV and NTA per unit as at 30 September 2018 is 927,654,434. This comprises:
(i) 926,391,919 units in issue as at 30 September 2018;
(ii) 190,821 units issued to the Manager in October 2018, in satisfaction of 20% of the base management fee payable to the Manager for the quarter
ended 30 September 2018; and
(iii) 1,071,694 units issued to the Manager in October 2018, in satisfaction of 50%, 40%, 30% and 20% of the performance management fee payable to the
Manager for the quarter ended 31 December 2017, 31 March 2018, 30 June 2018 and 30 September 2018 respectively.
Appraised Value of Properties
The total appraised value of FCT’s investment properties was S$2,846.0 million as at 30 September 2019 (2018:
S$2,749.0 million).
Causeway Point, Northpoint City North Wing, Changi City Point, YewTee Point and Anchorpoint saw higher appraised
valuations from the independent property valuers. Valuation of Bedok Point and Yishun 10 retail podium remained the
same as the previous year.
The property valuations for FY2019 were performed either by CBRE Pte Ltd (“CBRE”); Colliers International Consultancy
& Valuation (Singapore) Pte Ltd (“Colliers”); and Savills Valuation and Professional Services (S) Pte Ltd (“Savills”).
Valuation methods used include the capitalisation approach, discounted cash flow analysis and direct comparison
method in determining the fair values of the properties. Annual valuations are required by the Code on Collective
Investment Schemes.
Property
FY2019
Valuation @ 30 Sep 2019
FY2018
Valuation @ 30 Sep 2018
Valuation
S$ million
Valuation
S$ psf NLA(a)
Cap rate(b)
Valuer Valuation
S$ million
Valuation
S$ psf NLA(a)
Cap rate(b)
Valuer
Causeway Point
1,298.0
3,090
4.75%
Savills
1,218.0
2,928
4.70%
Knight
Frank
771.5
3,517
4.75%
Colliers
771.0
3,516
4.75%
Savills
Northpoint City
North Wing
Changi City Point
YewTee Point
Bedok Point
Anchorpoint
Yishun 10 retail podium
Total
2,846.0
(a) Per square foot of net lettable area.
(b) As indicated by property valuers.
342.0
189.0
94.0
113.5
38.0
1,668
2,566
1,136
1,599
3,674
5.00%
5.00%
5.00%
Savills
CBRE
CBRE
4.50%
Colliers
3.75%
Savills
332.0
186.0
94.0
110.0
38.0
2,749.0
1,618
2,525
1,136
1,550
3,655
5.00%
5.00%
5.00%
Savills
CBRE
CBRE
4.50%
Colliers
3.75%
Colliers
34 Frasers Centrepoint Trust
Capital
Resources
Overview
The Manager of Frasers Centrepoint Trust (“FCT”) continues to maintain a prudent financial structure and adequate
financial flexibility to ensure that it has access to capital resources at competitive cost. The Manager proactively
manages FCT Group’s cash flows, financial position, debt maturity profile, cost of funds, interest rates exposure and
overall liquidity position. The Manager 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 with reputable
banks deemed sufficient by management to ensure FCT Group has access to diversified sources of bank borrowings.
Sources of Funding
FCT Group relies on the debt capital and syndicated loans markets, equity market and bilateral bank facilities for its
funding needs. The Manager maintains active relationship with banks which are located in Singapore. The principal
bankers of FCT Group are BNP Paribas, Citibank. N.A., Singapore Branch, Credit Industriel et Commercial, Singapore
Branch, DBS Bank Ltd and Oversea-Chinese Banking Corporation Limited.
As at 30 September 2019, FCT Group has a total capacity of $4,911 million from its sources of funding, of which $1,042
million or 21.2% has been utilised. The following table summarises the capacity and the amount utilised for each of the
sources of funding:
Sources of Funding
Bridging loans
Revolving credit facilities
Medium Term Note Programme
Bank borrowings
Bank borrowings
Type
Capacity
Amount Utilised
% Utilised
Unsecured
Unsecured
$64 million
$250 million
Unsecured
$1,000 million
Unsecured
$191 million
Secured
$406 million
$64 million1
$71 million1
$310 million
$191 million
$406 million
Nil
100.0%
28.4%
31.0%
100.0%
100.0%
Nil
21.2%
Multicurrency Debt Issuance Programme
Unsecured
$3,000 million
Total
$4,911 million
$1,042 million
1 A committed 4-year unsecured loan offer of $119 million to refinance the short-term facilities is currently documentation-in-progress.
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, FCT Group drew on $321 million of the term loan facilities to refinance $130 million of bank borrowings
and $191 million of bank borrowing to part finance FCT’s acquisition of 18.80% stake in PGIM Real Estate AsiaRetail
Fund Limited.
FCT Group’s total debt stood at $1,042 million on 30 September 2019 for which it comprised $406 million secured
bank borrowings, $326.1 million unsecured bank borrowings and $310 million unsecured Notes. $295.1 million of
borrowings (about 28.3% of total borrowings) will mature in the next 12 months. FCT Group’s gearing stood at 32.9%2
as at 30 September 2019. The interest cover for the year ended 30 September 2019 was 5.74 times.
The weighted average debt maturity was 2.3 years as at 30 September 2019.
2
In accordance with the Property Funds Appendix, the gearing ratio included FCT’s 40% proportionate share of deposited property value and borrowing in a
joint venture.
Annual Report 2019 35
Key Financial Metrics
Financial Year ended 30 September
Total Borrowings
Gearing
Interest Cover
Average all-in cost of borrowing3
Average debt maturity
2019
2018
$1,042.1 million
$813 million
32.9%2
5.74 times
2.63%
2.3 years
28.6%1
6.25 times
2.62%
2.0 years
1
2
3
Calculated as the ratio of total outstanding borrowings over the total assets as at the stated balance sheet date.
In accordance with the Property Funds Appendix, the gearing ratio included FCT’s proportionate share (40%) of deposited property value and borrowings in
Sapphire Star Trust (which owns Waterway Point).
Calculated as at the stated balance sheet date.
FCT Group holds derivative financial instruments to hedge its interest rate risk exposure. The fair value of derivative
liabilities as at 30 September 2019 of $1.0 million (2018: asset of $0.1 million) is disclosed in Note 11 to the Financial
Statements. The fair value of financial derivatives represented 0.04% (2018: 0.003%) of the net assets of FCT Group as at
30 September 2019.
Debt Maturity Profile as at 30 September 2019
Financial Year ended 30 September
Amount Due
As % of total borrowings
< 1 year
1 to 2 years
2 to 3 years
3 to 4 years
> 4 years
Total Borrowings
$1,042.1 million
$295.1 million1
$266.0 million
$150.0 million
$191.0 million
$140.0 million
$1,042.1 million
28.3%
25.6%
14.4%
18.3%
13.4%
100.0%
$295.1 million1
(28.3% of total
borrowings)
$266.0 million
(25.6% of total
borrowings)
$150.0 million
(14.4% of total
borrowings)
$191.0 million
(18.3% of total
borrowings)
$140.0 million
(13.4% of total
borrowings)
Total Borrowings
< 1 year
1 to 2 years
2 to 3 years
3 to 4 years
> 4 years
1 A committed 4-year unsecured loan offer of $119 million to refinance the short-term facilities is currently documentation-in-progress.
36 Frasers Centrepoint Trust
Retail Property
Market Overview
This report was prepared by Cistri Pte. Ltd.
1. Economic Context
Singapore is a global city. As such, its economy is highly
responsive to both the highs and lows of international
economic cycles, while also having its own domestic
drivers of growth. In this section we provide a brief
review of how the global economic context is influencing
Singapore, then we consider the domestic drivers of
economic performance.
Global Context
While global economic news continues to be quite
negative, it is easy to forget that the world economy
has been through a relatively long and stable period of
economic growth. The USA has had its longest period of
growth ever recorded, Europe has withstood a currency
crisis, and in 2018 China’s economy expanded by more (in
RMB terms) than any other year in its history. The ADB still
forecasts solid growth within South East Asia, at about
4.5% for 2019.
Nevertheless, the various trade disputes that are going on
between the USA, China, Europe and other countries are
having an impact and could dampen the global economic
growth. The USA and China, in particular, have been
escalating tariffs on each other’s products over the past
twelve months. The tariffs have been implemented quite
gradually, with the toughest American tariffs announced
but not yet introduced.
Both the USA and China have taken steps to limit the
impact of the tariffs domestically, which is lowering the
impetus to find a solution. For example, US soybean
farmers who were hit hard by Chinese tariff retaliation
have received increased Government subsidies, while
duties on toys and consumer electronics have been
delayed. China has allowed its currency to drop, helping
offset the impact of the tariffs there.
Beyond the trade war, there are other issues impacting
global confidence. In Europe, Brexit continues to be the
major issue. The UK’s inability to find a neat solution to
Brexit has led to a clash of ‘Brexit’ ideologies, and the
issue has now seen the resignation of two Prime Ministers.
It has become politically very messy and underpinned a
feeling of uncertainty which will likely continue until the
(current) Brexit deadline of January 31st, 2020.
This uncertainty has not come at a good time for Europe.
Economic growth across the continent has been slowing.
The ECB announced in September that growth had slowed
to 0.2% in Q2 2019. ECB has also announced that it will be
restarting its quantitative easing programme in November
and has cut its bank deposit rate to -0.5% in a bid to
stimulate economic growth.
In addition, the impact of the protests in Hong Kong is
reverberating through Asian markets. The economic
impact of the protests is starting to become apparent
– both retail sales and tourist numbers are significantly
down in Hong Kong. Hong Kong’s Government has
indicated that economic growth was likely to be negative
in the short term.
Local Context
As Singapore’s economy is heavily dependent on global
trade and finance, this global economic uncertainty is
having an adverse impact. Singapore’s MTI in August 2019
reduced its economic growth forecast for 2019 from 1.5%
– 2.5% to 0% - 1%1 as manufacturing and engineering
output has fallen. We are therefore assuming economic
growth of 0.5% in 2019 with only a gradual rebound
thereafter.
However, there are a few bright spots for Singapore’s
outlook. International tourist arrival numbers continue
to grow2, with half of the growth so far this year coming
from China. Chinese tourists are deserting Hong Kong
and we expect many are instead opting for Singapore.
Analysis by Goldman Sachs3 suggests that there has been
a net flow of bank deposits out of Hong Kong and into
Singapore, reflecting the gradual erosion of confidence in
Hong Kong.
Similarly, residential property prices are showing some
positive signs, after a weak start to this year. And while
manufacturing has struggled, the construction industry
has expanded on the back on an increase in government
spending, and the services sector has benefited from a
robust financial and insurance sector.
Despite the economic challenges, the Government of
Singapore has expressed confidence in the tools at its
disposal to prevent a significant downturn in economic
growth. In the short term, it has the fiscal and monetary
capacity to support economic growth if necessary.
Furthermore, the Singapore Government has a strong
track record in astute management of the economy. In the
long term, the ongoing focus on micro-economic reforms
(up-training workers, supporting industry restructuring)
will need to continue to ensure productivity growth
continues.
1
2
3
https://www.channelnewsasia.com/news/singapore/singapore-slashes-annual-gdp-forecast-to-0-1-amid-strong-11803990
https://www.stb.gov.sg/content/stb/en/statistics-and-market-insights/tourism-statistics/international-visitorarrivals.html
https://www.businesstimes.com.sg/banking-finance/goldman-says-billions-moved-from-hong-kong-to-singapore-amid-unrest
Annual Report 2019 37
In summary, we expect a challenging economic environment in the short term. However, given the economic levers
available to the Government and its ability to deal with short term challenges as well as a focused long-term strategy,
we remain cautiously optimistic about Singapore’s longer-term economic outlook. We expect Singapore’s real GDP
growth to be about 0.5% in 2019 and average 2.0% per annum over the subsequent 5 years.
Chart 1.1 Singapore Real GDP Growth
2008-2028
n 2008 - 2018 Average Growth: +4.6% p.a.
n 2018 - 2028 Average Growth: +2.2% p.a.
14.5%
Forecast
6.3%
4.4%
4.8%
3.9%
1.9%
0.1%
2.9% 3.0%
3.7% 3.1%
1.5%
0.5%
2.4% 2.9%
2.7% 2.6%
2.5% 2.4%
2.4% 2.3%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Source: Oxford Economics; Cistri
2. Inflation
The retail market continues to be impacted by a lack of inflation. Historically, inflation has allowed for constant
growth in prices in most retail categories, supporting sales and rental growth. In the past few years, inflation has been
extremely low, making it increasingly difficult for retailers and mall owners alike.
Year-on-year inflation to September 2019 was estimated by SingStats at 0.5%. ‘Core’ inflation for the same period came
in at 0.7%, a three-year low.
Supporting price growth were the food (+1.6%), healthcare (+1.4%) and education (+2.1%) sectors. However, offsetting
this was deflation in the housing and utilities sector (-1.3%). This was due to the gradual decline in housing rentals
and, in particular, electricity and gas prices which fell 8.3% due to the launch of the Open Electricity Market (OEM) in
November 2018. Furthermore, clothing and footwear fell by 0.9%.
Going forward, a MAS survey of professional forecasters projects inflation for the full year of 2019 to come in at slightly
under 1.0% and increase to approximately 1.4% in 2020. We expect the inflation rate over the next five years to average
~1.6% per annum. We note that an additional one-off boost to inflation could come through the proposed Goods and
Services Tax increase between 2021 and 20254.
Chart 2.1 Inflation
2008-2028
n 2008 - 2018 Average Growth: +1.6% p.a.
n 2018 - 2028 Average Growth: +1.6% p.a.
5.4%
5.5%
4.6%
4.3%
Forecast
1.5%
1.9% 1.9%
1.9% 1.8%
1.8% 1.7%
1.7% 1.7%
1.4%
0.2%
0.4% 0.5%
0.6%
(0.5%)
(0.1%)
(0.6%)
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Source: Cistri; Singapore Department of Statistics; Oxford Economics
4
https://www.straitstimes.com/singapore/singapore-budget-2018-gst-to-be-raised-from-7-to-9-sometime-between-2021-and-2025
38 Frasers Centrepoint Trust
Retail Property Market Overview
3. Population Growth
According to the Singapore Department of Statistics,
Singapore’s population is currently 5.7 million. The
population comprises of 3.5 million citizens, 530,000
permanent residents (PRs) and approximately 1.7 million
non-residents which include dependants, international
students, and professionals holding employment passes,
S-Passes and foreign worker permits.
In recent years, population growth has fallen well below
trend levels, registering growth in 2017 and 2018 of only
0.1% and 0.5% respectively. In addition to low resident
birth rates, the Government has limited the number of
new work permits allocated, and a slowdown in some
major industries (e.g. oil and gas) has resulted in a decline
in expat numbers.
SingStats’ latest data, however, shows population growth
of about 1.2% year-on-year, a solid rebound from previous
years. The increase has been supported by healthy growth
in the non-resident population of 2.0%. Work permits
have been allowed to increase to support the growth in
the services and construction industries5. We surmise that
the increase in work permits reflects the Government’s
concern about current risks to the domestic economy.
While the flow of migrants to Singapore has jumped,
low fertility rates and an ageing population are keeping
growth in the resident population at subdued levels.
Singapore’s life expectancy is 83.2 years, one of the
highest life expectancies globally. The fertility rate among
resident females is at 1.14, well below the replacement
rate of 2.1 needed to maintain population stability
without immigration. This has fallen from around 1.6 at
the turn of the century.
The Government has actively taken steps to boost the
fertility rate through various policies and incentives in
recent years. In August 2019, the government removed
the age limit of 45 for women undergoing in-vitro
fertilisation (IVF) treatments. The Government also
announced additional subsidies for pre-schools for lower-
income families to help working parents defray some of
the costs of raising children.
Clearly, there are two major policy levers that the
Government can pull on to support population growth.
The easier lever is changing immigration levels, while
the much harder one is increasing the birth-rate. While
increasing immigration might be easier, it brings with it
political and social risk as local residents can perceive
greater competition for jobs and a loss of cultural identity.
The Government, therefore, needs to maintain a balance
between the two policy levers. In our view, relaxing
immigration policy is the right approach in the current
economic climate. But supporting the upskilling of
residents, promoting labour efficiency, as well as
providing support to working parents should remain
longer-term policies as if successfully implemented, they
will lower the need for immigration in the future.
Cistri forecasts population to grow to approximately
6.1 million in 2024. This represents an annual growth of
approximately 1.2% per annum between 2019 and 2024.
4. Tourism Growth
International visitor arrivals to Singapore hit a new record
high of 18.5 million visitors in 2018. Growth continues to
be positive in 2019, with 12.9 million visitors reported in
the first eight months of 2019, an increase of 1.9% over
the same period in 2018.
2018 saw several high-profile events such as the
North Korea-USA Summit meeting and the premiere of
“Crazy Rich Asians” raising Singapore’s profile among
international visitors. This momentum has continued into
2019, with strong growth in visitation from China, USA,
Canada, Myanmar and the Philippines. Indonesia and
India remain significant markets, recording 2.0 million and
970,000 visitors respectively over this period.
Additionally, the 2019 Formula One Grand Prix attracted
268,000 attendees over three days, the second largest
since the inaugural event in 2008. This is in part due to a
strong international music and entertainment line-up that
supported the main race.
While the number of visitors to Singapore has continued
to grow, the amount they spend has not. According to
the STB, the total retail expenditure for 2018 reached
SGD 26.9 billion, 0.5% higher than in 2017. This compares
to growth in visitation of 6.2%, meaning that spend per
person has declined materially. This trend has continued
in 2019.
The falling spend per visitor reflects an important
structural change. Growth in tourism in South East Asia
is being driven by the emerging middle class, particularly
from China and India, which typically have lower spending
patterns than the higher income tourists that Singapore
historically attracted.
Moving forward, the Government has long term and
ambitious plans to significantly boost tourism in
Singapore. The plans include:
•
•
Changi City and Terminal 5: With Terminal 5
due to be completed in the 2030s, the airport’s
capacity will increase by 50 million to 135 million.
The proposed waterfront, business, and lifestyle
district of Changi City will be integrated with
Changi Airport and will offer multiple tourism
opportunities.
Sentosa-Brani Masterplan: A significant and
long-term masterplan to redevelop Sentosa
and Pulau Brani into a larger leisure and tourism
destination was recently unveiled. The plan will be
implemented in phases over the next two to three
decades. The first project, Sentosa Sensoryscape
will be completed in 2022.
5
https://www.population.sg/articles/population-in-brief-2019-what-do-you-need-to-know
•
•
•
Marina Bay Sands (MBS) and Resorts World
Expansion (RWS): Approximately SGD 9 billion
will be invested into the two existing integrated
resorts to expand and refresh their non-gaming
components. New additions include an indoor
entertainment arena and fourth tower at MBS and
new attractions at the RWS such as Minion Park,
Super Nintendo World as well as new hotels.
Jurong Lake District: A new Science Centre
and tourism development will be developed by
2026, with the Government’s intention to spread
the benefits of tourism across Singapore. STB is
presently holding an expression of interest exercise
for development.
Mandai Nature Project: A Bird Park (2020),
Rainforest Park (2023) and an eco-friendly resort
(2023) will be completed alongside the existing
Singapore Zoo, Night Safari and River Safari.
Together they will form a large 126-hectare eco-
tourism hub.
Along with these plans for tourist infrastructure and
attractions, the government has signed a Memorandum
of Understanding (MOU) with travel app Traveloka to
promote at least 12 online marketing campaigns across
Indonesia, Malaysia, the Philippines, Thailand and Vietnam
and another MOU with Alibaba to increase collaboration
with the Chinese market.
With these plans, it is clear that the Government sees
tourism as a key element of the economy’s future growth.
Of course, being an externally oriented market there
are risks in terms of currency risk and a slowdown in
travel demand from major source markets such as China.
But history suggests that Singapore is quite adept at
navigating this ever-changing market.
5. Retail Sales
Shopping centre owners and retailers alike have felt the
combined impact of falling retail spending by tourists,
falling real expenditure by residents, and a lack of inflation
Chart 5.1 Retail Sales Growth
2014-2022
n 2013 - 2018 Average Growth: +1.7% p.a.
Annual Report 2019 39
in the retail sector. This has contributed to the lack of
growth in retail sales over the past few years. Retail sales
in 2018 were marginally lower than in 2014, even though
over this period the population grew by 0.8% per annum.
This weakness has continued into 2019, with SingStats
reporting a fall in retail sales of 0.7%6 (annualised). Again,
indicators suggest that this fall in expenditure is being
driven by local residents’ lowering their expenditure, as
well as falling tourism spend. What makes this year’s
underperformance (to date) more disappointing is that it
has occurred at the same time as population growth has
increased, suggesting that per capita retail expenditure
has declined materially.
The weakness in sales growth has been broad-based.
Hardest hit have been the furniture and household
equipment and computer and telecommunications
equipment sectors, experiencing a sales decline of 8.2%
and 7.2% respectively.
Other sectors such as department stores, food retailers,
watches, jewellery, optical goods and books have also
experienced declines this year-to-date, ranging between
2.5% - 3.6% on an annualised basis.
However, there is some good news. The F&B sector has
seen sales grow by about 2.8% year-to-date. Fast food
outlets have seen 7.1% growth, while restaurants, food
catering and cafes have also seen healthy growth this
year-to-date, ranging between 2.5% - 2.9% growth.
Shopping centres have shown an eagerness to increase
the share of floorspace allocated to F&B, so this growth
will be very welcome.
Notwithstanding the rebound in population growth, the
lack of inflation in the market, weakness in consumer
confidence, and a likely lack of good economic news over
the next few months have resulted in Cistri moderating its
forecast retail sales growth. Post-2019, we forecast retail
sales growth of ~2.0% per annum over the next three
years.
Forecast
n 2018 - 2022 Average Growth: +1.3% p.a.
2019 - 2022 Average Growth: +2.0% p.a.
2.5%
1.5%
1.9%
1.0%
0.8%
0.8%
(0.5%)
(0.7%)
(0.7%)
2013
2014
2015
Source: Singapore Department of Statistics; Cistri
(1.9%)
2016
2017
2018
2019
2020
2021
2022
6
Year-to-date in this section refers to January 2019 to August 2019
40 Frasers Centrepoint Trust
Retail Property Market Overview
Chart 6.1 Retail Floorspace Supply
Singapore, 2009-2024 (Mil sq.ft)
Total
n Other Retail
n Shopping Centres
Forecast
54.9
57.4
58.9
60.2
61.8
63.7
64.3
65.1
65.4
65.5
66.6
67.3
67.7
68.3
68.9
69.4
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Source: URA, Developers’ Announcements, Cistri
As of October 2019
6. Retail Supply
Cistri estimates total retail floorspace7 for Singapore at
the end of 2019 will be ~66.6 million sq.ft (NLA). To date,
2019 has seen the largest amount of new floorspace
entering the market since 2013-2014. Major completions
have included:
•
•
•
the opening of the Jewel Changi Airport (576,000
sq.ft NLA) in April,
the reopening of Funan (325,000 sq.ft NLA) within
the Central Area in June 2019, and
the opening of Paya Lebar Quarter (340,000 sq.ft
NLA) in August 2019.
While there are no further major completions expected in
2019, smaller neighbourhood centres will be opened such
as Tekka Place (a 70,000 sq.ft NLA redevelopment) and
Canberra Plaza (88,000 sq.ft NLA).
Total retail floorspace is expected to increase to around
69.4 million sq.ft over the next five years8. This translates
into an average growth rate of around 560,000 sq.ft or
0.8% per annum. Given assumed population growth of
Table 6.1 Upcoming Major Retail Supply
2019 - 2024
around 1.2%, this suggests a decline in per capita supply
which should help the performance of existing stock
(Chart 6.1).
The proportion of retail floorspace in a shopping centre
format is approximately 54% at present. Going forward, it
is expected to increase marginally to approximately 55%
by 2024.
Looking beyond 2019, there are no proposed
developments above 200,000 sq.ft over the next five
years (Table 7.1). The more significant projects that have
been announced include Woodleigh Mall (100,000 sq.ft
NLA, 2022) and the anticipated retail component of
the Punggol Digital District known as ‘Market Village’
(140,000 – 150,000 sq.ft NLA, 2023).
We believe the moderation in the pace of new supply
post-2019 will benefit the market, as supply growth
has outpaced sales growth in recent years. Given the
challenging economic environment, lower floorspace
growth will help to stabilise rents after several years of
rental decline (refer Section 9).
Name
Canberra Plaza
Tekka Place
Northshore Plaza
Le Quest
Woodleigh Mall
Sengkang Central Development
Punggol Digital District
One Holland Village
Source: Cistri
NLA (sq.ft)
Closest MRT/LRT
Opening Year
Centre Type
88,000
70,000
88,802
60,000
100,000
64,000
Canberra (U/C)
Little India
Samudera
Bukit Batok
Woodleigh
Buangkok
146,600
Punggol Coast (U/C)
61,871
Holland Village
2019
2019
2020
2021
2022
2022
2023
2024
Neighbourhood
Neighbourhood
Neighbourhood
Neighbourhood
Neighbourhood
Neighbourhood
Neighbourhood
Neighbourhood
Source: Cistri estimates and URA.
7
8 Our retail floorspace projections include announced retail projects, allowances for future projects not announced, as well as allowances for obsolescence.
Supply forecasts for announced projects are based on the Urban Redevelopment Authority’s (URA) commercial projects pipeline and developers’ intentions.
Annual Report 2019 41
Longer-term, several locations are likely to see retail development under the URA’s Draft Master Plan 2019. The Woodlands
Regional Centre, Punggol Digital District, Changi Gateway, the Greater Southern Waterfront, Tengah and Bidadari, as well
as the tourism centric Sentosa-Brani Masterplan will all provide long term opportunities for new retail supply.
Further, several sites have been published on the URA’s Government Land Sales Reserve List, including Marina View,
Woodlands Avenue 2 and Kampong Bugis. Development on these sites within the next five years will be dependent on the
submission of a satisfactory bid which will trigger a tender process, meaning development is likely to be a few years away.
Table 6.2 Upcoming Government Land Sale Sites
2H 2019
Site
Marina View
Woodlands Avenue 2
Kampong Bugis
Source: URA
Site Area
(ha)
Proposed Gross
Plot Ratio
Maximum GFA
(sq.ft)
Capped Retail GFA
(sq.ft)
Status
0.8
2.8
9.2
13.0
4.2
N.A
1,090,000
1,240,000
4,200,000
20,000
Reserve List
360,000
Reserve List
110,000
Reserve List
7. Shopping Centre Floorspace Per Capita
The per capita provision of shopping centre floorspace in Singapore is expected to reach 6.3 sq.ft (NLA) per capita by the
end of 2019.
As noted in the previous section, there are relatively few major retail projects in the pipeline over the next five years.
As a result, we expect Singapore’s population growth will marginally outpace the growth in the supply of retail. This
pattern of per capita floorspace decline will be seen across almost all of Singapore’s planning area (Map 7.1).
The Outer North and Outer North-East regions are the exceptions to this decline. The imminent opening of Canberra
Plaza will help push up the provision marginally within the Outer North sector, while new retail developments at
Sengkang Central and Punggol Digital Districts will push up supply in the Outer North-East sector. However, the overall
provision in these sectors will remain low by Singaporean standards.
Map 7.1 Shopping Mall Floorspace Per Capita by Region
Source: SingStats; Cistri
Population for the purposes of analysis excludes domestic workers and construction workers.
The figures represented are as of Q3 2019
42 Frasers Centrepoint Trust
Retail Property Market Overview
Chart 7.1 compares the provision of shopping centre floorspace in Singapore to other countries worldwide. By global
standards, Singapore’s provision of shopping centre floorspace per capita is not high. The big difference between
Singapore and markets such as Australia and the USA is that Singapore has fewer large malls. For example, Singapore
has 12 malls above 500,000 sq.ft whereas Sydney has 22.
Chart 7.1 Shopping Centre Floorspace Per Capita
Singapore vs Various Countries; Based on Latest Available Data from ICSC (sq.ft NLA)
16.8
23.3
USA (2018)
Canada (2018)
Australia (2018)
Hong Kong (2015)
Singapore (2019)
Singapore (2024)
UK (2018)
Japan (2016)
11.2
10.1
6.3
6.3
4.7
4.4
South Korea (2015)
2.2
China (2015)
1.8
Source: International Council of Shopping Centres; Cistri
8. Market Share of Shopping Malls NLA by Owner
With the recent purchase of 40% of Waterway Point, Frasers Centrepoint Trust has overtaken PGIM Real Estate and is
now the fourth largest owner by floorspace, behind CapitaLand Mall Trust, NTUC and Lendlease.
CapitaLand Mall Trust continues to be the largest owner of shopping centre floorspace, owning 14.1% of shopping mall
floorspace including9 the recently re-opened Funan Mall. NTUC is the second largest owner, with the more recently
acquired Jurong Point its largest mall.
Lendlease is the third largest ‘owner’, but in Lendlease’s case its more of an asset manager, managing the asset for third
party investors. The recent opening of Paya Lebar Quarter has added to its stock.
Chart 8.1 Share of Major Shopping Mall Floorspace by Owner
By NLA
Owner Rank
n CapitaLand Mall Trust
n NTUC
n
Lend Lease
n
Frasers Centrepoint Trust
n PGIM Real Estate
n
Far East Organisation
n Mapletree Commercial Trust
n CapitaLand
n Changi Airport Group
n United Industrial Corporation Limited
n Others
Share
14.1%
5.8%
4.9%
4.3%
4.2%
3.6%
3.6%
3.3%
3.1%
3.0%
50.2%
1 Malls with NLA of 100,000 sq.ft and above as at end 2018. Share of floor space takes into account ownership stakes.
2
Source: Cistri
Fund manager treated as single owner.
9. Retail Rents & Occupancy
As discussed in previous sections, the retail market has endured a difficult few years. During this time, retail floorspace
continued to rise while retail sales declined, resulting in declining sales productivity. Falling sales productivity impacted
retailers’ profitability and lowered their appetite for floorspace. This trend has flowed through to rents and occupancy –
rents have declined as shopping centre owners have endeavoured to keep mall’s occupied (Chart 9.1 and 9.2).
9 Only includes malls with 100,000 sq.ft NLA or more.
Annual Report 2019 43
these malls will need to go through a structural change
to turn their performance around. Such structural change
could include major tenant re-mixing or replacing parts of
the retail floorspace with another use. This change is likely
to occur gradually.
In suburban areas, the turnaround in performance has
been somewhat slower than we expected. The steady
growth in competition from new floorspace, including
Jewel Changi Airport and Paya Lebar Quarter, has
prevented the turnaround in rental growth that Orchard
Road has seen. However, occupancy is relatively healthy
at just under 93%, so we expect to see modest rental
growth return over the next couple of years. We have
forecast rental growth of 1% per annum between 2019
and 2021.
Of course, market rent estimates are only part of the
equation. An average rent disguises the wide range of
tenants’ sales and rent performance we see in the market.
For example, we estimate that high quality, modern
sub-regional malls, on average, can achieve tenants’
sales per square foot of between S$80 and S$90 per
month. However regional malls with stronger shopper
catchments can achieve higher tenants’ sales per square
foot of over S$100 per month. On the other hand,
malls with less competitive attributes such as poorer
connectivity and tenant mix may achieve less than $60 in
tenants’ sales psf per month.
Orchard Road
Suburban
Rest of City Area
Forecast
However, it should be noted that occupancy has remained
relatively healthy by global standards – Singapore’s
occupancy of above 90% across all major geographies
would be seen as a great result in many Southeast Asian
cities. However, in Singapore, the URA’s control on supply,
coupled with mall owner’s relatively sophisticated asset
management, has helped keep occupancy relatively
high. Owners know that having an occupied mall is more
important than retaining higher than sustainable rents.
And on a further positive note, the retail market is now
starting to show signs of a recovery from its recent
weakness.
Orchard Road has seen the strongest rebound in the past
eighteen months, largely (we expect) due to the solid
growth in tourism supporting sales on the street. Rents
increased marginally in 2018 and occupancy has returned
to solid levels (~95%). While occupancy is unlikely to
increase significantly from current levels, we believe that
rental growth should continue to improve.
Other parts of the central area have been hardest hit by
the recent downturn. The structure of the retail market
has changed over the past two decades, with a much
stronger suburban retail offer impacting the performance
of many centralised retail malls. These malls have seen
the largest drops in occupancy and rents over the past
few years. Further, we expect these malls will have the
slowest rebound from the current downturn. Many of
Chart 9.1 Retail Occupancy Rate
Singapore, 2014-2021
96%
95%
94%
93%
92%
91%
90%
89%
88%
2014
2015
2016
2017
2018
2019
2020
2021
Source: Urban Redevelopment Authority, Cistri
Chart 9.2 Median Retail Rental Year-on-Year Growth
Singapore, 2014-2021
4%
2%
0%
-2%
-4%
-6%
-8%
-10%
n Orchard Road
n Suburban
n Rest of City Area
Forecast
2014
2015
2016
2017
2018
2019
2020
2021
Source: Urban Redevelopment Authority, Cistri
44 Frasers Centrepoint Trust
Retail Property Market Overview
10. Retail Trends
The following are some of the major retail trends and
changes currently impacting the Singaporean retail
market.
Broader Market Trends
•
While it has been spoken about for some time,
the trend of providing more experiential and
entertainment elements in malls is only now
really in full swing. Funan and Jewel are probably
at the extreme of this trend, but owners of more
established malls are now going down this path
– Decathlon’s store at The Centrepoint is a good
example (see below).
•
With technology playing a significant role in the
everchanging and evolving taste of consumers,
retailers have had to evolve and improve their
experiential offering. Some good examples include:
IKEA, for example, has removed the use of plastic
straws from its restaurants and will stop the sale
of single-use bottled waters. It will sell water
in recyclable tetra packs by the end of the year.
Supermarkets such as Cold Storage and FairPrice
have offered shoppers reward points and rebates
for reusable bags and F&B outlets such as
McDonalds and 4Fingers have put up notices to
discourage the use of straws.
•
The rise of environmental consciousness is an
important issue beyond its impact on plastic
consumption. Shoppers are increasingly re-thinking
their need to purchase consumable goods. It is a
trend that we see worldwide, and while it remains
somewhat ‘fringe’ in Singapore, we expect it to
gather momentum. Over time, this will certainly
change people’s shopping patterns (i.e. what they
buy and where) and could also result in people
spending less on retail overall.
−
−
−
Courts, which opened its first IoT (internet of
things) store at Funan where consumers can
test smart products within the store;
•
FairPrice Xtra, which opened a 90,000
sq.ft hypermarket in August 2019 with
experiential elements such as an indoor
hydroponic farm and dine-in areas; and
The upcoming Decathlon outlet, which will
replace Metro department store at The
Centrepoint and have features such as an
augmented reality environment to try out
products as well as Zumba and Yoga classes.
•
•
The trend to provide more entertainment and
lifestyle has resulted in increased F&B floorspace
within malls. In recent years this has worked
reasonably well, particularly given F&B has been
one of the few retail categories to experience sales
growth.
However, this market is now getting increasingly
competitive, and shopping centre owners are
now having to go beyond the typical ‘restaurant
precinct’ that is provided in many malls and start
thinking about more comprehensive entertainment
and dining precincts, complete with high-quality
placemaking elements.
With climate change a serious global discussion,
the use of plastic is being scrutinised in Singapore
and globally more than ever. The National
Environment Agency (NEA) launched a campaign
in June 2019 to encourage people to cut down on
waste and choose more sustainable alternatives.
59 companies and organizations with more than
1,600 premises have joined in the campaign.
The impact of eCommerce remains a major talking
point in the retail market, particularly in the press.
Online sales remain a relatively small part of the
market – we estimate in Singapore online retail
absorbs around 6% of the total available retail
market, a small share compared to many other
markets. Indeed, we estimate that Singaporeans
spend as much money on overseas travel as they
do online. There are several reasons for this:
−
−
Singaporeans have a very convenient retail
offer – many pass by / through a mall on the
way home from work via the train.
Singaporeans spend a high proportion of
their income on F&B compared to other
markets. While some of this is going online
(via Grab, Deliveroo etc), Singaporean’s habit
of eating out means they often visit retail
precincts.
In addition to creating a more competitive market,
the shift of retail transactions to online platforms,
is certainly creating other challenges for shopping
centre owners:
−
Platforms like Deliveroo and Grab Food
are providing food delivery to a much
wider range of shops that would not have
otherwise provided this service. Most
of these deliveries are being serviced by
traditional retail stores, including from
within malls. As a result, mall owners are
having to deal with an ever-increasing
number of uniformed delivery personnel
using their mall.
Annual Report 2019 45
Additionally, the F&B sector has seen the entry
of new concepts, with the three new malls also
playing a role. Shake Shack, Shang Social, Burger
and Lobster all made their debut at Jewel while
A&W made its return to Singapore since departing
previously in 2003. The fast-food chain has since
opened a second outlet at AMK Hub and plans to
open a third in 2020. Starbucks has also opened
its largest outlet in Singapore in the form of its
Starbucks Reserve concept at Jewel. Burger and
Lobster also recently opened its second outlet at
the recently reopened Raffles Hotel Arcade.
Funan Mall has seen the entry of Afuri Ramen
and Noka, an “Open Farm Community” concept
restaurant. Paya Lebar Quarter has new entries in
the form of Mom’s Touch, Hayai, Wursthans and
Fong Sheng Hao.
Established malls have also played a part in
bringing new concepts into the retail landscape.
Singapore’s first Emma Dessert store opened in
Plaza Singapura in July 2019. Plaza Singapura will
also have the first Five Guys, a popular American
burger chain, open by the end of this year.
Japanese Bakery Croquant Choqu Zakuzaku will
also be opening its first store in Singapore at ION
Orchard.
Fashion brands such as Pomelo (313@ Somerset),
Manifesto (Mandarin Gallery), Gianvito Rossi and
Philipp Plein (Marina Bay Sands) have opened their
first flagship stores in Singapore this year.
While many retail concepts have entered or
expanded in Singapore this year, popular brands
have also departed or will be departing Singapore
by the end of the year. They include MPH Bookstore
(closed branches at Raffles Place and Parkway
Parade in July and September this year), Dome
Café (Parkway Parade) as well as four Chili’s Café
outlets.
Two department stores will be closed by the end
of the year. The Metro department store at The
Centrepoint closed in September 2019, while the
Isetan at Westgate is not renewing its lease which
ends in December.
•
•
•
−
While having delivery people in the mall
isn’t necessarily a major issue per se, it
does reflect a bigger issue. It is becoming
increasingly difficult to understand the
value a retailer places on a store, as a
growing proportion of sales are not being
captured by traditional POS systems, but
though an online platform. Mall owners
will need to think through alternative
ways to measure the value of their shops,
as turnover is increasingly becoming less
relevant.
But while eCommerce has presented some
challenges, it is also presenting real opportunities.
Research undertaken by the ICSC has shown that
opening up a new brick-and-mortar store can have
a dramatic impact on that retailers’ web-traffic
in the local area10. Similarly, closing stores has a
significant negative impact on that brand’s web-
traffic. This is described as the ‘Halo Effect’, and it is
this effect that is causing on-line retailers to open
physical stores and traditional retailers to keep
stores open.
For example, Chinese e-commerce platform Tabao
opened its first physical store in Southeast Asia
at Funan in September 2019. Homeware retailer
Iuiga, which started an app and website in 2017,
now has five physical stores. Lifestyle retailer
Naiise, which started online in 2013 currently has
three stores with its latest 9,500 sq.ft store opened
at Jewel Changi Airport.
Going forward, it is likely that retailers would tend
towards adopting a strategy that converges the
strengths and opportunities that having both
an online presence and physical store provide.
The ability to showcase customers products
in a physical store, coupled with the ease of
convenience in making purchases and delivery
online will be increasingly commonplace.
Tenant Trends
•
The opening of Jewel Changi Airport, Funan Mall
and Paya Lebar Quarter have played a major role in
bringing a range of new-to-market and expanding
brands into the market. Tenants include the entry
of Spanish fashion brand Oysho as well as the
opening of Singapore’s second largest Uniqlo
and second Apple store at Jewel Changi Airport.
Lenovo has also opened its flagship 4,500 sq.ft
store at Funan Mall while Courts opened its first IoT
store at Funan Mall.
10 “The Halo Effect”, How Bricks Impact Clicks; Alexander Babbage, ICSC 2018
46 Frasers Centrepoint Trust
Retail Property Market Overview
After a particularly weak 2018, the return of population
growth is a welcome change for the market. Singapore
has a number of residential growth fronts, including
Punggol in the north, Tampines in the east and Tengah
in the west. Healthy city-wide population growth helps
support the growth of these areas, which in turn provides
an additional market for the suburban malls located in
these regions.
Over the next couple of years, we expect the retail market
will continue to throw up challenges to mall owners, as
Singapore moves through the current economic cycle.
However, we remain optimistic about the long-term
growth in the Singaporean market. The fundamentals of
the retail market are strong – it has a controlled supply
of floorspace, while over the long-term demand for
floorspace has continued to rise fuelled by a growing
middle class and strong tourism growth. We expect these
fundamentals will continue to support long-term growth
in the market. On this basis, we forecast average retail
sales growth of ~2% over the next three years.
11. Conclusions
The retail market continues to work its way through
what has been a difficult few years. A growing supply
of floorspace coupled with falling retail sales has put
retailers and mall owners under pressure as rents have
fallen and vacancy increased.
However, the market appears to have absorbed the
additional supply gradually, and some positive signs are
emerging. Several high-quality projects have opened over
the past twelve months with relatively good occupancy,
and across the market, rents have stabilised and, in many
cases, increased.
The future will continue to present challenges,
particularly the macro-economic environment as the
global economy continues to deal with some significant
issues. However, we believe the Singapore retail market is
now in a better place to deal with these challenges. The
future supply of floorspace is expected to be limited, and
some inflation is starting to appear in the market. Most
importantly, population growth has increased, which is a
critical component of retail sales growth.
The suburban mall market in Singapore has several
strengths that we expect will continue to support its
long-term performance. By global standards, the supply
of shopping centre floorspace in Singapore is not high,
and there are few suburban retail locations that exhibit
real signs of oversupply. There is some underperforming
suburban stock, however, this tends to be driven more
by poor design or management rather than oversupply.
Further, suburban malls tend to have a higher weighting
towards ‘non-discretionary’ retail tenants. These tenants
provide goods and services that residents use on a daily
or weekly basis, which help to smooth out the mall’s
performance over time.
Annual Report 2019 47
Disclaimer
This report is dated 6 November 2019 and incorporates information and events up to that date only and excludes any
information arising, or event occurring, after that date which may affect the validity of Cistri Pte. Ltd.’s opinion in this
report. Cistri. Pte.Ltd. prepared this report on the instructions, and for the benefit only, of Frasers Centrepoint Trust
(Instructing Party) for the purpose of providing a high level assessment of the Singapore retail market (Purpose) and not
for any other purpose or use. To the extent permitted by applicable law, Cistri Pte. Ltd. expressly disclaims all liability,
whether direct or indirect, to the Instructing Party which relies or purports to rely on this report for any purpose other
than the Purpose, and to any other person which relies or purports to rely on this report for any purpose whatsoever
(including the Purpose).
In preparing this report, Cistri Pte. Ltd. was required to make judgements which may be affected by unforeseen future
events, the likelihood and effects of which are not capable of precise assessment.
All surveys, forecasts, projections and recommendations contained in or associated with this report are made in good
faith and on the basis of information supplied to Cistri Pte. Ltd. at the date of this report, and upon which Cistri Pte.
Ltd. relied. Achievement of the projections and budgets set out in this report will depend, among other things, on the
actions of others over which Cistri Pte. Ltd. has no control.
In preparing this report, Cistri Pte. Ltd. may rely on or refer to documents in a language other than English, which
Cistri Pte. Ltd. may arrange to be translated. Cistri Pte. Ltd. is not responsible for the accuracy or completeness of such
translations and disclaims any liability for any statement or opinion made in this report being inaccurate or incomplete
arising from such translations.
Whilst Cistri Pte. Ltd. has made all reasonable inquiries it believes necessary in preparing this report, it is not responsible
for determining the completeness or accuracy of information provided to it. Cistri Pte. Ltd. (including its officers and
personnel) is not liable for any errors or omissions, including in information provided by the Instructing Party or another
person or upon which Cistri Pte. Ltd. relies, provided that such errors or omissions are not made by Cistri Pte. Ltd.
recklessly or in bad faith.
This report has been prepared with due care and diligence by Cistri Pte. Ltd. and the statements and opinions given by
Cistri in this report are given in good faith and in the reasonable belief that they are correct and not misleading, subject
to the limitations above.
Glossary & Abbreviations
ADB:
Core Inflation:
ECB:
GDP:
GFA:
IMF:
MAS:
MTI:
NLA:
POS:
Sales Productivity:
S-Pass:
SGD:
SingStats:
STB:
UK:
URA:
USA:
Asian Development Bank
Inflation that excludes accommodation and private road transport
European Central Bank
Gross Domestic Product
Gross Floor Area
International Monetary Fund
Monetary Authority of Singapore
Ministry of Trade and Industry
Net Lettable Area
Point of Sale
Shopping centre sales per sq.ft of floorspace
Pass that allows mid-level skilled staff to work in Singapore
Singapore Dollar
Singapore Statistics
Singapore Tourism Board
United Kingdom
Urban Redevelopment Authority
United States of America
48 Frasers Centrepoint Trust
FCT Portfolio
Overview
As at 30 September 2019
Net Lettable Area3
(NLA)
Number of Leases
Number of Tenants
Title
Causeway Point
Northpoint City
North Wing1
Yishun 10 Retail
Podium
Waterway Point2
420,082 square feet
39,026 square meters
219,365 square feet
20,380 square meters
10,344 square feet
961 square meters
371,200 square feet
34,486 square meters
199
174
184
1804
203
198
99 years leasehold
commencing 30/10/95
(75 years remaining)
99 years leasehold
commencing 1/4/90
(69 years remaining)
99 years leasehold
commencing 18/5/11
(90 years remaining)
Year Purchased
2006
Purchased Price
S$606.17 million
Northpoint 1:
2006
Northpoint 2:
2010
Northpoint 1:
S$249.27 million
Northpoint 2:
S$164.55 million
2016
40% interest purchased in
2019
S$37.8 million
S$530.2 million
for 40% interest
Appraised Value
S$1,298.0 million
S$771.5 million
S$38.0 million
38.6%
24.0%
S$ 1,300.0 million
(100.0% interest)
S$ 520.0 million
(40.0% interest)
15.4%
As % of Total
Portfolio Appraised
Value
FY2019
Gross Revenue
FY2019
Net Property
Income
Occupancy
S$86.5 million
S$53.1 million
S$ 5.72 million4
S$27.3 million
S$6.5 million
S$14.4 million
S$8.6 million
S$65.8 million
S$39.2 million
S$ 4.48 million5
S$17.5 million
S$2.7 million
S$10.3 million
S$3.8 million
97.0 %6
99.0 %
98.0 %
Key Tenants by
gross rental income
Metro, Courts, Cold Storage
supermarket, Food Republic,
Cathay Cineplexes, Uniqlo
Kopitiam food court, Cold Storage
supermarket, OCBC Bank, United
Overseas Bank, MayBank, McDonald’s
restaurant and Popular bookstore
Uniqlo, Daiso Japan, Din Tai
Fung, H&M, NTUC FairPrice
Finest
Annual Shopper
Traffic in FY2019
Connectivity
26.5 million
57.3 million7
28.4 million
13.9 million
4.2 million
13.0 million
3.2 million
Woodlands MRT station
(North South Line and future
Thomson-East Coast Line) &
Bus Interchange
Yishun MRT station (North South Line)
& Yishun Bus Interchange
Punggol MRT station (North
East Line) and LRT station,
Punggol temporary bus
interchange
Expo MRT station (East West
Bedok MRT station (East West
YewTee MRT station (North
Near Queenstown MRT
Line, and Downtown Line 3)
Line) & Bus Interchange
South Line) & Bus Stop
station (East West Line)
& Bus Stop
Frasers Centrepoint Trust owns 40% interest in Waterway Point.
1 Northpoint City North Wing was formerly known as Northpoint Shopping Centre.
2
3 Net lettable area as stated in valuation reports dated 30 September 2019 for the respective assets.
4
5
6 Occupancy is based on NLA of 416,332 square feet before completion of AEI.
7
Combined shopper traffic for Northpoint City North Wing and South Wing.
This is FCT’s share of revenue in Sapphire Star Trust (“SST”) (which holds Waterway Point) for the period 12 July – 30 September 2019.
This is FCT’s share of net property income in SST for the period 12 July – 30 September 2019.
Changi City Point
Bedok Point
YewTee Point
Anchorpoint
205,028 square feet
19,047 square meters
82,713 square feet
7,684 square meters
73,669 square feet
6,844 square meters
70,988 square feet
6,595 square meters
129
1234
40
40
66
65
60 years leasehold
commencing 30/4/09
(49 years remaining)
99 years leasehold
commencing 15/3/78
(57 years remaining)
99 years leasehold
commencing 3/1/06
(85 years remaining)
53
51
Freehold
2014
2011
2010
2006
S$305.0 million
S$127.0 million
S$125.7 million
S$36.0 million
S$342.0 million
S$94.0 million
S$189.0 million
S$113.5 million
10.2%
2.8%
5.6%
3.4%
95.9 %
Challenger
95.7 %
BBQ
Kopitiam food court,
Harvey Norman, GymmBoxx,
NTUC FairPrice, Koufu food
Mr DIY, Cotton On, Koufu food
Uniqlo, Nike, Tung Lok and
Happy Days and Ssiksin Korea
court, Watson’s, KFC and
court, Xin Wang HK Café,
Shakura
Sakuraya and Charles & Keith
97.1 %
79.0 %
Annual Report 2019 49
Northpoint 2:
2006
2010
S$249.27 million
Northpoint 2:
S$164.55 million
203
198
2019
S$530.2 million
for 40% interest
S$ 1,300.0 million
(100.0% interest)
S$ 520.0 million
(40.0% interest)
15.4%
Causeway Point
Northpoint City
North Wing1
Yishun 10 Retail
Podium
Waterway Point2
Net Lettable Area3
420,082 square feet
219,365 square feet
10,344 square feet
371,200 square feet
(NLA)
39,026 square meters
20,380 square meters
961 square meters
34,486 square meters
Number of Leases
Number of Tenants
Title
199
174
184
1804
99 years leasehold
commencing 30/10/95
(75 years remaining)
99 years leasehold
commencing 1/4/90
(69 years remaining)
99 years leasehold
commencing 18/5/11
(90 years remaining)
Changi City Point
Bedok Point
YewTee Point
Anchorpoint
205,028 square feet
19,047 square meters
82,713 square feet
7,684 square meters
73,669 square feet
6,844 square meters
70,988 square feet
6,595 square meters
129
1234
40
40
66
65
60 years leasehold
commencing 30/4/09
(49 years remaining)
99 years leasehold
commencing 15/3/78
(57 years remaining)
99 years leasehold
commencing 3/1/06
(85 years remaining)
53
51
Freehold
Year Purchased
2006
Northpoint 1:
2016
40% interest purchased in
2014
2011
2010
2006
Purchased Price
S$606.17 million
Northpoint 1:
S$37.8 million
S$305.0 million
S$127.0 million
S$125.7 million
S$36.0 million
Appraised Value
S$1,298.0 million
S$771.5 million
S$38.0 million
S$342.0 million
S$94.0 million
S$189.0 million
S$113.5 million
As % of Total
Portfolio Appraised
Value
FY2019
Gross Revenue
FY2019
Net Property
Income
Occupancy
Annual Shopper
Traffic in FY2019
38.6%
24.0%
10.2%
2.8%
5.6%
3.4%
S$86.5 million
S$53.1 million
S$ 5.72 million4
S$27.3 million
S$6.5 million
S$14.4 million
S$8.6 million
S$65.8 million
S$39.2 million
S$ 4.48 million5
S$17.5 million
S$2.7 million
S$10.3 million
S$3.8 million
97.0 %6
99.0 %
98.0 %
95.9 %
95.7 %
97.1 %
79.0 %
Key Tenants by
Metro, Courts, Cold Storage
Kopitiam food court, Cold Storage
Uniqlo, Daiso Japan, Din Tai
gross rental income
supermarket, Food Republic,
supermarket, OCBC Bank, United
Fung, H&M, NTUC FairPrice
Cathay Cineplexes, Uniqlo
Overseas Bank, MayBank, McDonald’s
Finest
Kopitiam food court,
Uniqlo, Nike, Tung Lok and
Challenger
Harvey Norman, GymmBoxx,
Happy Days and Ssiksin Korea
BBQ
NTUC FairPrice, Koufu food
court, Watson’s, KFC and
Shakura
Mr DIY, Cotton On, Koufu food
court, Xin Wang HK Café,
Sakuraya and Charles & Keith
restaurant and Popular bookstore
26.5 million
57.3 million7
28.4 million
13.9 million
4.2 million
13.0 million
3.2 million
Connectivity
Woodlands MRT station
Yishun MRT station (North South Line)
Punggol MRT station (North
(North South Line and future
Thomson-East Coast Line) &
Bus Interchange
& Yishun Bus Interchange
East Line) and LRT station,
Punggol temporary bus
interchange
Expo MRT station (East West
Line, and Downtown Line 3)
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
50 Frasers Centrepoint Trust
Mall Profiles
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
39,026.6 square meters
(420,082 square feet)1
Car Park Lots
839
Title
99 years leasehold w.e.f 30 Oct 1995
Year Acquired by FCT
2006
Market Valuation
S$1,298.0 million
as at 30 September 2019
Annual Shopper Traffic
26.5 million
(October 2018 – September 2019)
Key Tenants
Metro, Courts, Cold Storage
supermarket, Food Republic,
Cathay Cineplexes, Uniqlo
Causeway Point
Causeway Point is the largest mall in Woodlands, one of Singapore’s most
populous residential estates. It is located next to the Woodlands regional
bus interchange and the Woodlands MRT station, which will serve as an
interchange station for the existing North-South line and the new Thomson-
East Coast line in the near future.
The mall has more than 200 stores and food outlets spread over seven retail
levels (including basement level) and offers shoppers a one-stop shopping and
dining experience.
Causeway Point is an award-winning mall for its user-friendliness, connectivity
and safety aspects in its design and features. The mall is also awarded the
Platinum Award in the BCA’s Green Mark program for its environmentally
friendly features.
Mall Performance Highlights
Financial Year ended
30 September ($’000)
Gross Revenue
Property Expenses
Net Property Income
Occupancy
Shopper Traffic (million)
FY2019
86,458
20,693
65,765
97.0%2
26.5
FY2018
86,710
21,351
65,359
98.4%
25.5
Increase/
(Decrease)
(0.3%)
(3.1%)
0.6%
(1.4%point)
3.9%
1 As indicated in the valuation report for Causeway Point, dated 30 September 2019, by Savills
Valuation and Professional Services (S) Pte Ltd.
2 Occupancy is based on NLA of 416,332 square feet before completion of AEI.
Annual Report 2019 51
Top 10 Tenants
As at 30 September 2019, Causeway Point has a total of 199 leases (FY2018: 221), excluding vacancy. The total number
of tenants as at 30 September 2019 was 174 and the key tenants include Metro, Courts, Cold Storage supermarket,
Food Republic, Cathay Cineplexes and Uniqlo, among others. The top 10 tenants contributed collectively, 36.3% of the
mall’s total gross rental income (“GRI”) (FY2018: 35.1%).
Trade Sector Analysis
Food & Beverage contributed 29.7%, (FY2018: 28.5%) of the mall’s GRI, followed by the Fashion trade at 14.7%10
(FY2018: 20.5%, which included Jewellery & watches). These two trades account for 44.4% of the mall’s GRI. The
breakdown of the trade sector analysis by NLA and GRI is presented below.
Top 10 Tenants
as at 30 September 2019
Metro (Private) Limited3
Courts (Singapore) Limited
Cold Storage Singapore (1983) Pte Ltd4
Food Republic Pte Ltd
Cathay Cineplexes Pte Ltd
Uniqlo (Singapore) Pte Ltd
Hanbaobao Pte Ltd5
Aspial Corporation Ltd6
Copitiam Pte Ltd7
Cotton On Singapore
Total
Trade Classifications (in descending order of % rent)
1
2
3
4
5
6
7
8
9
10
11
12
13
Food & Beverage9
Fashion10
Beauty & Health11
Household
Department Store
Services12
Jewellery & Watches10
Leisure/Entertainment
Supermarket & Hypermarket13
Sports Apparel & Equipment
Books, Music, Art & Craft, Hobbies
Education12
Vacant
Total
% of Mall’s GRI
8.1%
6.7%
5.4%
4.0%
3.1%
2.3%
1.9%
1.6%
1.6%
1.6%
36.3%
By GRI8
29.7%
14.7%
11.4%
10.4%
8.0%
8.0%
4.6%
3.8%
3.5%
3.0%
2.5%
0.4%
0.0%
By NLA
23.2%
13.2%
7.4%
11.6%
14.4%
4.4%
1.4%
9.3%
5.7%
2.1%
3.5%
0.7%
3.1%
100.0%
100.0%
Lease Expiry Profile14
As at 30 September 2019
Number of leases expiring
FY2020
FY2021
FY2022
FY2023
FY2024
70
62
57
8
2
Total
199
NLA of expiring leases (square feet)
131,181
79,208
104,621
83,392
5,135
403,537
Expiries as % of Mall’s total leased area
Contribution of expiring leases as % of Mall’s total GRI
32.5%
35.3%
19.6%
24.3%
25.9%
23.8%
20.7%
16.0%
1.3%
0.6%
100.0%
100.0%
Includes leases for Lee Hwa Jewellery, CITIGEMs and Goldheart Jewellery.
Includes leases for Metro Department Store & Clinique Service Centre.
Includes leases for Cold Storage supermarket, Guardian Pharmacy and 7-Eleven stores.
3
4
5 Operator of McDonald’s Restaurants Pte Ltd.
6
7 Operator of Kopitiam food court.
Excludes gross turnover rent.
8
9
Formerly known as Food & Restaurants.
10 Jewellery & Watches has been split out from Fashion as a standalone trade sector.
11 Beauty and Health comprises the former Beauty, Hair, Cosmetics & Personal Care and Health trade sectors.
12 The trade sector formerly known as Services/Education has now been split to two trade categories: namely Services and Education.
13 Formerly known as Supermarket.
14 Excludes vacancy
52 Frasers Centrepoint Trust
Mall Profiles
Description
Northpoint City North Wing
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
20,380 square meters
(219,365 square feet)1
Car Park Lots
157
Title
99 year leasehold w.e.f 1 Apr 1990
Year Acquired by FCT
2006 (Northpoint 1),
2010 (Northpoint 2)
Market Valuation
$771.5 million as at 30 September 2019
Annual Shopper Traffic
57.3 million2
(October 2018 – September 2019)
Key Tenants
Kopitiam food court, Cold Storage
supermarket, OCBC Bank, United
Overseas Bank, MayBank, McDonald’s
restaurant and Popular bookstore
Description:
Yishun 10 Retail Podium
10 retail units on the first storey in a
cinema complex with basement carpark
Address
51 Yishun Central 1, Yishun 10,
Singapore 768794
Net Lettable Area
961 square meters
(10,344 square feet)3
Title
99 year leasehold w.e.f 1 Apr 1990
Year Acquired by FCT
2016
Market Valuation
$38.0 million as at 30 September 2019
Key Tenants
Sri Murugan Supermarket
Northpoint City North Wing
and Yishun 10 Retail Podium
Northpoint City North Wing is FCT’s second largest property by net lettable
area (“NLA”) after Causeway Point. It is seamlessly integrated with the
Northpoint City South Wing (owned by FCT’s sponsor, Frasers Property Limited)
to form Northpoint City, with over 400 F&B and retailers spread over 500,000
square feet of space.
Northpoint City North Wing offers six retail levels of shopping (including two
basement levels). Key tenants at Northpoint City North Wing include Kopitiam
food court, Cold Storage supermarket, OCBC Bank, United Overseas Bank,
MayBank, McDonald’s restaurant and Popular bookstore. The mall enjoys high
shopper traffic flow from the surrounding residential estate and schools. The
total shopper traffic to Northpoint City (including that of South Wing as both
wings are integrated) in FY2019 was 57.3 million.
FCT also owns ten strata-titled retail units in the Yishun 10 retail podium
located next to Northpoint City North Wing.
Mall Performance Highlights
Financial Year ended
30 September ($’000)
Gross Revenue
Property Expenses
Net Property Income
Occupancy
Shopper Traffic (million)
FY2019
53,089
13,876
39,213
99.0%
57.3
FY2018
52,215
13,024
39,191
96.5%
49.4
Increase/
(Decrease)
1.7%
6.5%
0.1%
2.5%-point
16.0%
1 As indicated in the valuation report for Northpoint City North Wing, dated 30 September 2019, by
2
Colliers International Consultancy & Valuation (Singapore) Pte Ltd.
Refers to the total shopper traffic for both Northpoint City North Wing (owned by FCT) and South
Wing (owned by Frasers Property Limited).
3 As indicated in the valuation report titled “10 Strata Titled Retail Units Within 51 Yishun Central,
1 Yishun 10, Singapore 768794”, dated 30 September 2019, by Savills Valuation and Professional
Services (S) Pte Ltd.
Annual Report 2019 53
Top 10 Tenants (Northpoint City North Wing and Yishun 10 retail podium)
As at 30 September 2019, Northpoint City North Wing and Yishun 10 retail podium has a total of 184 leases (FY2018:
188). The total number of tenants as at 30 September 2019 was 180 and the key tenants include Kopitiam food court,
Cold Storage supermarket, OCBC Bank, United Overseas Bank, MayBank, McDonald’s restaurant and Popular bookstore,
among others. The top 10 tenants contributed collectively 26.9% of the total gross rental income (“GRI”) (FY2018:
27.7%).
Top 10 Tenants
as at 30 September 2019
Copitiam Pte Ltd4
Cold Storage Singapore (1983) Pte Ltd5
Overseas-Chinese Banking Corporation Ltd
United Overseas Bank Ltd
Malayan Banking Berhad
Hanbaobao Pte Ltd6
Popular Book Company Pte Ltd
BreadTalk Pte Ltd
Sushi-Tei Pte Ltd
ABR Holdings Ltd7
Total
% of Mall’s GRI
6.5%
5.4%
3.1%
2.6%
2.1%
1.6%
1.6%
1.4%
1.3%
1.3%
26.9%
Trade Sector Analysis (Northpoint City North Wing and Yishun 10 retail podium)
Food & Beverage contributed 42.5%, (FY2018: 43.0%) of the mall’s gross rental income, followed by the Beauty &
Health trade at 12.3% (FY2018: 14.0%). These two trades account for 54.8% of the mall’s GRI. The breakdown of the
trade sector analysis by NLA and GRI is presented below.
Trade Classifications (in descending order of % rent)
1
2
3
4
5
6
7
8
9
10
11
12
Food & Beverage9
Beauty & Health10
Services11
Fashion12
Supermarket & Hypermarket13
Household
Books, Music, Art & Craft, Hobbies
Jewellery & Watches12
Sports Apparels & Equipment
Education11
Leisure/ Entertainment
Vacancy
Total
Lease Expiry Profile14
As at 30 September 2019
Number of leases expiring
By NLA
36.6%
10.0%
6.7%
8.3%
8.6%
5.3%
5.9%
1.4%
3.2%
10.7%
2.3%
1.0%
100.0%
FY2020
FY2021
FY2022
FY2023
FY2024
FY2028
92
51
32
1
1
By GRI8
42.5%
12.3%
12.2%
10.8%
4.6%
4.4%
3.5%
3.4%
3.1%
2.1%
1.1%
0.0%
100.0%
Total
180
NLA of expiring leases (square feet)
87,640
53,966
55,623
Expiries as % of Mall’s total leased area
Contribution of expiring leases as % of
Mall’s total GRI
38.5%
46.1%
23.7%
24.5%
24.5%
22.8%
3
7,444
3.3%
4.9%
1,539
21,248
227,460
0.7%
0.5%
9.3%
1.2%
100.0%
100.0%
Includes leases for Cold Storage supermarket and Guardian Pharmacy.
Excludes gross turnover rent.
Formerly known as Food & Restaurants.
4 Operator of Kopitiam food court.
5
6 Operator of McDonald’s Restaurant.
7 Operator of Swensen’s Cafe Restaurant.
8
9
10 Beauty and Health comprises the former Beauty, Hair, Cosmetics & Personal Care and Health trade sectors.
11 The trade sector formerly known as Services/Education has now been split to two trade categories: namely Services and Education.
12 Jewellery & Watches has been split out from Fashion as a standalone trade sector.
13 Formerly known as Supermarket.
14 Excludes vacancy, for both Northpoint City North Wing and Yishun 10 Retail Podium.
54 Frasers Centrepoint Trust
Mall Profiles
Description
4-storey suburban family and lifestyle
shopping mall (including Includes two
basement levels)
Waterway Point
Address
83 Punggol Central,
Singapore 828761
Net Lettable Area
34,486 square meters
(371,200 square feet)1
Car Park Lots
622
Title
99 year leasehold title
commencing 18 May 2011
Year Acquired by FCT
FCT owns 40.0% stake in Waterway
Point, the dates of acquisition are as
follow:
• 331/3% acquired on 11 July 2019
• 62/3% acquired on 18 September 2019
Market Valuation
$1,300 million as at 1 April 2019
Annual Shopper Traffic
28.4 million
(October 2018 – September 2019)
Key Tenants
NTUC Fairprice, Koufu, Shaw Theatres,
H&M, Cotton On
Waterway Point is a 4-storey suburban family and lifestyle shopping mall
located at 83 Punggol Central, Singapore 828761, the heart of Singapore’s
first waterfront eco-town, Punggol. The mall enjoys direct connection to
public transportation system including the Punggol MRT & LRT stations and a
temporary bus interchange. It is also served by major expressways including
Tampines Expressway (TPE) and Seletar Expressway (SLE) which provide
vehicular accessibility to other parts of Singapore.
The mall offers its shoppers a diverse range of shopping, dining and
entertainment experiences and caters to their necessity and convenience
shopping as well as their leisure needs. Notable retailers and restaurant
operators at the mall include Uniqlo, Daiso Japan, Din Tai Fung, H&M and a
24-hour NTUC FairPrice Finest supermarket. It also offers a wide range of food
and dining outlets including some with alfresco options. The mall also has a
cineplex operated by Shaw Theatres that features 11 screens, including an
IMAX theatre.
FCT acquired a 331/3% share in Sapphire Star Trust (“SST”) on 11 July 2019 and
a further 62/3% share in SST on 18 September 2019, bringing the total stake to
40.0%. SST is a private trust that holds the interest in Waterway Point.
Waterway Point is awarded the BCA Universal Design (UD) GoldPlus certification.
Mall Performance Highlights
FCT’s share for the period 12 July – 30 September 2019
Gross Revenue
Net Property Income
Occupancy
Shopper Traffic
FY2019
S$ 5.72 million
S$ 4.48 million
98.0%
28.4 million
1 As indicated in the valuation report for Waterway Point, dated 1 April 2019, by CBRE Pte Ltd. The
NLA excludes the area of approximately 17,954 square feet currently used as Community Sports
Facilities Scheme (CSFS) space.
Annual Report 2019 55
Top 10 Tenants
As at 30 September 2019, Waterway Point has a total of 203 leases, excluding vacancy. The total number of tenants as
at 30 September 2019 was 198 and the key tenants include Koufu foodcourt, Shaw Theatres, H&M and a 24-hour NTUC
FairPrice Finest supermarket, among others. The top 10 tenants contributed collectively, 28.7% of the mall’s total gross
rental income (“GRI”).
Top 10 Tenants
as at 30 September 2019
NTUC2
Koufu Pte Ltd
Shaw Theatres Pte Ltd
H&M Hennes & Mauritz Pte Ltd
Cotton On Singapore Pte Ltd3
Bachmann Japanese Restaurant Pte Ltd4
Best Denki (Singapore) Pte Ltd
Citibank Singapore Limited
United Overseas Bank Limited
Maybank Singapore Limited
Total
% of Mall’s GRI
6.5%
4.1%
3.3%
3.2%
2.5%
2.3%
1.9%
1.7%
1.7%
1.5%
28.7%
Trade Sector Analysis
Food & Beverage contributed 34.9% of the mall’s GRI, followed by the Fashion trade at 17.2%. These two trades account
for 52.1 % of the mall’s gross rental income. The breakdown of the trade sector analysis by NLA and GRI is presented
below.
Trade Classifications (in descending order of % rent)
1
2
3
4
5
6
7
8
9
10
11
12
Food & Beverage
Fashion
Services
Beauty & Health
Household
Supermarket & Hypermarket
Leisure/Entertainment
Books, Music, Art & Craft, Hobbies
Education
Jewellery & Watches
Sports Apparels & Equipment
Vacant
Total
By NLA
27.5%
18.9%
7.6%
6.3%
8.8%
8.0%
9.5%
6.1%
3.3%
1.0%
1.0%
2.0%
By GRI5
34.9%
17.2%
12.9%
10.1%
6.1%
6.1%
3.7%
3.5%
2.5%
2.0%
1.0%
0.0%
100.0%
100.0%
Lease Expiry Profile6
As at 30 September 2019
Number of leases expiring
FY2020
FY2021
FY2022
FY2023
FY2024
56
46
89
11
1
Total
203
NLA of expiring leases (square feet)
95,245
98,071
146,686
17,837
5,091
362,930
Expiries as % of Mall’s total leased area
Contribution of expiring leases as % of Mall’s total GRI
26.3%
30.5%
27.0%
26.2%
40.4%
36.5%
4.9%
5.7%
1.4%
1.1%
100.0%
100.0%
2 Operates FairPrice Finest and NTUC Healthcare (Unity).
3
4
5
6
Includes leases for Cotton On, Cotton On Kids and TYPO.
Includes leases for Don Akimitsu, Menya Musashi Kinko and Osaka Ohsho.
Excludes gross turnover rent.
Excludes vacancy
56 Frasers Centrepoint Trust
Mall Profiles
Description
Three retail levels
(including one basement level)
Address
5 Changi Business Park Central 1,
Changi City Point, Singapore 486038
Net Lettable Area
19,047.6 square meters
(205,028 square feet)1
Car Park Lots
6272
Title
60 years leasehold w.e.f 30 Apr 2009
Year Acquired by FCT
2014
Market Valuation
$342.0 million as at 30 September 2019
Annual Shopper Traffic
13.9 million
(October 2018 – September 2019)
Key Tenants
Kopitiam food court, Uniqlo, Nike,
Tung Lok and Challenger
Changi City Point
Changi City Point is a three-storey retail mall (with one basement) located
in Changi Business Park, next to the Singapore Expo MRT station and near
one of Singapore’s largest convention and exhibition venues, The Singapore
Expo. Changi City Point is the third largest by net lettable area among Frasers
Centrepoint Trust’s portfolio.
The mall offers diverse shopping and dining experience especially for the
working population in Changi Business Park; residents in nearby precincts such
as Tampines, Bedok and Simei; and the visitors to the Singapore Expo. Changi
City Point features fashion and sports retailers including Uniqlo, Nike Factory
Store, Timberland, Adidas, Asics Factory Outlet, New Balance, Puma Outlet,
Liv Activ and many other outlets stores.
Shoppers can also do their grocery shopping at the NTUC Finest supermarket.
The restaurants at the mall include Tung Lok Signatures, Jollibee, Ichiban
Sushi, Han’s and the Kopitiam food court. Families can also enjoy the
landscaped rooftop garden that also features a wet and dry children’s
playground.
Mall Performance Highlights
Financial Year ended
30 September ($’000)
Gross Revenue
Property Expenses
Net Property Income
Occupancy
Shopper Traffic (million)
FY2019
27,335
9,809
17,526
95.9%
13.9
FY2018
25,751
9,262
16,489
93.8%
13.3
Increase/
(Decrease)
6.2%
5.9%
6.3%
2.1%-point
4.5%
1 As indicated in the valuation report for Changi City Point, dated 30 September 2019, by Savills
Valuation and Professional Services (S) Pte Ltd.
The car park lots are shared between Changi City Point, Capri By Fraser and ONE@Changi City.
2
Annual Report 2019 57
Top 10 Tenants
As at 30 September 2019, Changi City Point has a total of 129 leases (FY2018: 126), excluding vacancy. The total
number of tenants as at 30 September 2019 was 1233 and the key tenants include Kopitiam food court, Uniqlo, Nike,
Tung Lok and Challenger, among others. The top 10 tenants contributed collectively, 27.1% of the mall’s total gross
rental income (“GRI”) (FY2018: 27.4%).
Top 10 Tenants
as at 30 September 2019
Copitiam Pte Ltd4
Uniqlo (Singapore) Pte Ltd
Bachmann Japanese Restaurant Pte Ltd
NIKE Singapore Pte Ltd
Tung Lok Millennium Pte Ltd
Challenger Technologies Limited
Golden Beeworks5
RE & S Enterprise Pte Ltd6
Trilogies of Beers (Pte.) Ltd7
Ootoya Asia Pacific Pte. Ltd
Total
% of Mall’s GRI
8.4%
3.3%
2.4%
2.1%
2.0%
1.9%
1.8%
1.8%
1.7%
1.7%
27.1%
Trade Sector Analysis
Food & Beverage contributed 53.6%, (FY2018: 54.6%) of the mall’s GRI, followed by the Fashion trade at 20.9% (FY2018:
20.8%). These two trades account for 74.5% of the mall’s GRI. The breakdown of the trade sector analysis by NLA and
GRI is presented below.
Trade Classifications (in descending order of % rent)
1
2
3
4
5
6
7
8
9
Food & Beverage8
Fashion
Sports Apparels & Equipment
Household
Beauty & Heath9
Services10
Supermarket & Hypermarket11
Education11
Leisure/ Entertainment
10
Vacant
Total
Lease Expiry Profile12
As at 30 September 2019
Number of leases expiring
NLA of expiring leases (square feet)
Expiries as % of Mall’s total leased area
Contribution of expiring leases as % of Mall’s total GRI
By NLA
41.3%
19.3%
12.8%
9.5%
3.8%
1.6%
6.4%
0.9%
0.3%
4.1%
By GRI7
53.6%
20.9%
9.1%
6.5%
5.0%
2.2%
1.7%
0.7%
0.3%
0.0%
100.0%
100.0%
FY2020
FY2021
FY2022
40
58
31
Total
129
73,810
67,452
55,371
196,633
37.5%
34.3%
34.3%
36.0%
28.2%
100.0%
29.7%
100.0%
Excluding tenants under the Community and Sports Facilities scheme (CSFS).
3
4 Operator of Kopitiam food court.
5 Operates the Jollibee restaurant at Changi City Point.
6 Operates the Ichiban Sushi restaurant at Changi City Point.
7 Operates the Moa Tiki New Zealand Bar & Grill.
8
9
10 Beauty and Health comprises the former Beauty, Hair, Cosmetics & Personal Care and Health trade sectors.
11 The trade sector formerly known as Services/Education has now been split to two trade categories: namely Services and Education.
12 Formerly known as Supermarket.
13 Excludes vacancy
Excludes gross turnover rent.
Formerly known as Food & Restaurants.
58 Frasers Centrepoint Trust
Mall Profiles
Description
Five retail levels
(including one basement level)
and one basement car park
Address
799 New Upper Changi Road,
Singapore 467351
Net Lettable Area
7,684 square meters
(82,713 square feet)1
Car Park Lots
76
Title
99 years leasehold w.e.f 15 March 1978
Year Acquired by FCT
2011
Bedok Point
Bedok Point has five 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 offers an exciting array of restaurants, food outlets, enrichment
centres, retail and service offerings 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, Happy Days (NTUC Club), Ssiksin Korea BBQ restaurant
and Tenderbest Makcik Market (a lifestyle food outlet), among others.
Market Valuation
$94.0 million as at 30 September 2019
Mall Performance Highlights
Annual Shopper Traffic
4.2 million
(October 2018 – September 2019)
Key Tenants
Harvey Norman, GymmBoxx, NTUC
Club, Ssiksin Korean BBQ restaurant and
Tenderbest Makcik Market lifestyle food
outlet
Financial Year ended
30 September ($’000)
Gross Revenue
Property Expenses
Net Property Income
Occupancy
Shopper Traffic (million)
FY2019
FY2018
6,506
3,843
2,663
95.7%
4.2
Increase/
(Decrease)
5.5%
5.9%
5.0%
6,164
3,628
2,536
79.2%
16.5%-point
4.2
No change
1 As indicated in the valuation report for Bedok Point, dated 30 September 2019, by CBRE Pte Ltd.
Annual Report 2019 59
Top 10 Tenants
As at 30 September 2019, Bedok Point has a total of 40 leases (FY2018: 37), excluding vacancy. The total number of
tenants as at 30 September 2019 was 40 and the key tenants include Pertama Merchandising Pte Ltd (operator of
Harvey Norman), GymmBoxx, NTUC Club, Korea Buffet Pte Ltd (operator of Ssiksin) and Tenderbest Makcik Market,
among others. The top 10 tenants contributed collectively, 50.1% of the mall’s total gross rental income (“GRI”) (FY2018:
55.7%).
Top 10 Tenants
as at 30 September 2019
Pertama Merchandising Pte Ltd2
Gymmboxx Pte Ltd
NTUC Club
Korea Buffet Pte Ltd3
D&N Singapore Pte Ltd4
New Tenderfresh Fried & BBQ Chicken Pte Ltd5
QM Jianghu Pte Ltd
Zensho Food Singapore Pte Ltd6
SG Chicken Hotpot
Singapore Saizeriya Pte Ltd
Total
% of Mall’s GRI
8.8%
7.6%
6.4%
5.0%
4.4%
4.2%
3.7%
3.5%
3.4%
3.1%
50.1%
Trade Sector Analysis
Food & Beverage contributed 41.0%, (FY2018: 38.6%) of the mall’s GRI, followed by Beauty & Health at 13.4% (FY2018:
14.2%). These two trades account for 54.4% of the mall’s GRI. The breakdown of the trade sector analysis by NLA and
GRI is presented below.
Trade Classifications (in descending order of % rent)
1
2
3
4
5
6
7
8
9
Food & Beverage8
Beauty & Health9
Leisure/ Entertainment
Household
Education10
Sports Apparel & Equipment
Fashion11
Services10
Vacant
Total
Lease Expiry Profile12
As at 30 September 2019
Number of leases expiring
NLA of expiring leases (square feet)
Expiries as % of Mall’s total leased area
Contribution of expiring leases as % of Mall’s total GRI
By NLA
33.7%
8.4%
14.2%
18.3%
9.5%
9.2%
0.9%
1.5%
4.3%
100.0%
By GRI7
41.0%
13.4%
12.8%
11.7%
10.2%
7.6%
1.8%
1.5%
0.0%
100.0%
FY2020
FY2021
FY2022
13
15
12
Total
40
26,863
23,470
28,824
79,157
33.9%
34.9%
29.7%
32.8%
36.4%
100.0%
32.3%
100.0%
2 Operator of Harvey Norman store at Bedok Point.
3 Operator of Ssiksin Korean BBQ restaurant at Bedok Point.
4 Operator of Hoshino cafe at Bedok Point.
5 Operator of Tenderbest Makcik Market at Bedok Point.
6 Operator of Long John Silver fast food restaurant at Bedok Point.
7
8
9
10 The trade sector formerly known as Services/Education has now been split to two trade categories: namely Services and Education.
11 Jewellery & Watches has been split out from Fashion as a standalone trade sector.
12 Exclude vacancy
Excludes gross turnover rent.
Formerly known as Food & Restaurants.
Beauty and Health comprises the former Beauty, Hair, Cosmetics & Personal Care and Health trade sectors.
60 Frasers Centrepoint Trust
Mall Profiles
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
6,844 square meters
(73,669 square feet)1
Car Park Lots
832
Title
99 years leasehold w.e.f 3 Jan 2006
Year Acquired by FCT
2010
Market Valuation
$189.0 million as at 30 September 2019
Annual Shopper Traffic
13.0 million
(October 2018 – September 2019)
Key Tenants
NTUC FairPrice, Koufu food court,
Watson’s, KFC and Shakura
YewTee Point
YewTee Point has two retail levels (including one basement level). The mall is
located in Yew Tee, a housing estate within a major residential precinct Choa
Chu Kang, northwest of Singapore. YewTee Point is served by the adjacent Yew
Tee MRT station and public bus services.
YewTee Point’s key tenants include NTUC FairPrice, Koufu food court,
Watson’s, KFC and Shakura, among others. It draws shoppers from the private
apartments located above the mall (YewTee Residence), the YewTee housing
estate, schools, military camp and the nearby industrial estate.
Mall Performance Highlights
Financial Year ended
30 September ($’000)
Gross Revenue
Property Expenses
Net Property Income
Occupancy
Shopper Traffic (million)
FY2019
14,443
4,135
10,308
97.1%
13.0
FY2018
13,991
4,300
9,691
94.3%
12.1
Increase/
(Decrease)
3.2%
(3.9%)
6.4%
2.8%-point
7.4%
1 As indicated in the valuation report for YewTee Point, dated 30 September 2019, by CBRE Pte Ltd.
2
Part of limited common property for the exclusive benefit of YewTee Point.
Annual Report 2019 61
Top 10 Tenants
As at 30 September 2019, YewTee Point has a total of 66 leases (FY2018: 66), excluding vacancy. The total number of
tenants as at 30 September 2019 was 65 and the key tenants include NTUC FairPrice, Koufu food court, Watson’s, KFC
and Shakura, among others. The top 10 tenants contributed collectively, 50.7% of the mall’s total gross rental income
(“GRI”) (FY2018: 51.8%).
Top 10 Tenants
as at 30 September 2019
NTUC FairPrice Co-operative Ltd3
Koufu Pte Ltd4
Watson's Personal Care Stores Pte Ltd
Kentucky Fried Chicken Management Pte Ltd
Shakura Pigmentation Pte Ltd
Singapore Saizeriya Pte. Ltd.
Zensho Food Singapore Pte Ltd6
West Co'z Café Pte Ltd
BreadTalk Pte Ltd7
Sushi Express Group
Total
% of Mall’s GRI
19.3%
10.5%
3.8%
3.7%
2.8%
2.4%
2.1%
2.1%
2.0%
2.0%
50.7%
Trade Sector Analysis
Food & Beverage contributed 45.4%, (FY2018: 45.3%) of the mall’s GRI, followed by the Beauty & Health trade at 23.0%
(FY2018: 25.3%). These two trades account for 68.4% of the mall’s GRI. The breakdown of the trade sector analysis by
NLA and GRI is presented below.
Trade Classifications (in descending order of % rent)
1
2
3
4
5
6
7
8
9
Food & Beverage9
Beauty & Health10
Supermarket & Hypermarket11
Household
Education12
Services12
Fashion13
Books, Music, Art & Craft, Hobbies
Vacant
10
Leisure/Entertainment
Total
Lease Expiry Profile14
As at 30 September 2019
Number of leases expiring
NLA of expiring leases (square feet)
Expiries as % of Mall’s total leased area
Contribution of expiring leases as % of Mall’s total GRI
By NLA
42.6%
17.9%
23.5%
3.6%
2.9%
1.7%
1.1%
1.8%
2.0%
2.9%
By GRI8
45.4%
23.0%
17.8%
4.2%
2.4%
1.9%
1.9%
1.8%
1.6%
0.0%
100.0%
100.0%
FY2020
FY2021
FY2022
FY2023
15
34
16
1
Total
66
20,271
21,516
12,441
17,277
71,505
28.3%
26.6%
30.1%
36.0%
17.4%
19.5%
24.2%
100.0%
17.9%
100.0%
Includes leases for NTUC Fairprice and NTUC Healthcare (Unity).
3
4 Operator of Koufu food court.
5 Operator of Saizeriya.
6 Operator of Long John Silver’s.
7 Operator of ToastBox.
8
9
10 Beauty and Health comprises the former Beauty, Hair, Cosmetics & Personal Care and Health trade sectors.
11 Formerly known as Supermarket.
12 The trade sector formerly known as Services/Education has now been split to two trade categories: namely Services and Education.
13 Jewellery & Watches has been split out from Fashion as a standalone trade sector.
14 Excludes vacancy
Excludes gross turnover rent.
Formerly known as Food & Restaurants.
62 Frasers Centrepoint Trust
Mall Profiles
Description
Two retail levels
(including one basement level)
and an adjacent a two-storey restaurant
building
Anchorpoint
Address
368 and 370 Alexandra Road
Singapore 159952/159953
Net Lettable Area
6,595 square meters
(70,988 square feet)1
Car Park Lots
1282
Title
Freehold
Year Acquired by FCT
2006
Market Valuation
$113.5 million as at 30 September 2019
Annual Shopper Traffic
3.2 million
(October 2018 – September 2019)
Key Tenants
Cotton On, Koufu food court, Xin
Wang HK Café, Sakuraya, Uncle Leong
Signatures seafood restaurant and
Charles & Keith. (Mr DIY opened on 17
October 2019)
Anchorpoint has two retail levels (including one basement level) and an
adjacent a 2-storey restaurant building. The mall is located along Alexandra
Road, opposite to the popular large home furnishing store IKEA and Park
Hotel Alexandra. Anchorpoint is well-served by public bus services as well as
scheduled shuttle bus service between the mall and the nearby offices in the
Alexandra area.
Anchorpoint offers an exciting range of eateries and restaurants, retail
shopping and boutique outlets. The stores and restaurants at Anchorpoint
include Cotton On, Koufu food court, Xin Wang HK Café, Sakuraya, Uncle Leong
Signatures seafood restaurant and Charles & Keith. New tenant Mr DIY, a home
improvement retailer, opened at Anchorpoint on 17 October 2019.
Anchorpoint was awarded the Singapore Service Class Award (2012 – 2015) by
Spring Singapore.
Mall Performance Highlights
Financial Year ended
30 September ($’000)
Gross Revenue
Property Expenses
Net Property Income
Occupancy
Shopper Traffic (million)
FY2019
FY2018
8,555
4,747
3,808
79.0%
3.2
Increase/
(Decrease)
0.5%
3.3%
(2.9%)
8,516
4,596
3,920
88.8%
(9.8% point)
3.2
No change
1 As indicated in the valuation report for Anchorpoint, dated 30 September 2019, by Colliers
2
International Consultancy & Valuation (Singapore) Pte Ltd.
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.
Annual Report 2019 63
Top 10 Tenants
As at 30 September 2019, Anchorpoint has a total of 53 leases (FY2018: 55), excluding vacancy. The total number of
tenants as at 30 September 2019 was 51 and the key tenants include: fashion retailer Cotton On; Koufu food court; Xin
Wang HK Café; Sakuraya Japanese restaurant; Uncle Leong Signatures seafood restaurant; and fashion retailer Charles &
Keith. The top 10 tenants contributed collectively, 51.1% of the mall’s total gross rental income (“GRI”) (FY2018: 54.4%).
Top 10 Tenants
as at 30 September 2019
Cotton On Singapore Pte Ltd
Koufu Pte Ltd
XWS Pte Ltd3
Sakuraya Foods Pte Ltd
Crab Empire Pte Ltd4
JP Food Service Pte Ltd5
Watson's Personal Care Stores Pte Ltd
Sarika Connoisseur Cafe Pte Ltd6
Starbucks Coffee
Charles & Keith (Singapore) Pte Ltd
Total
% of Mall’s GRI
8.6%
8.3%
5.5%
5.0%
4.6%
4.6%
4.3%
3.8%
3.2%
3.2%
51.1%
Trade Sector Analysis
Food & Beverage contributed 50.6%, (FY2018: 41.5%) of the mall’s GRI, followed by the Fashion trade at 21.4% (FY2018:
19.3%). These two trades account for 72.0% of the mall’s GRI. The breakdown of the trade sector analysis by NLA and
GRI is presented below.
Trade Classifications (in descending order of % rent)
1
2
3
4
5
6
7
8
Food & Beverage8
Fashion9
Beauty & Health10
Household
Services11
Education11
Books, Music, Art & Craft, Hobbies
Vacant
Total
By NLA
41.9%
16.1%
8.6%
5.0%
3.0%
3.2%
1.2%
21.0%
100.0%
By GRI7
50.6%
21.4%
13.0%
5.5%
4.5%
2.7%
2.3%
0.0%
100.0%
Lease Expiry Profile12
As at 30 September 2019
Number of leases expiring
NLA of expiring leases (square feet)
Expiries as % of Mall’s total leased area
Contribution of expiring leases as % of Mall’s total GRI
FY2020
FY2021
FY2022
FY2023
26
14
11
2
Total
53
22,050
14,392
16,633
2,992
56,067
39.3%
44.1%
25.7%
24.6%
29.7%
26.3%
5.3%
5.0%
100.0%
100.0%
3 Operator of Xin Wang HK Café at Anchorpoint.
4 Operator of Uncle Leong Signatures at Anchorpoint.
5 Operator of Jack’s Place Restaurant at Anchorpoint.
6 Operator of The Coffee Connoisseur at Anchorpoint.
7
8
9
10 Beauty and Health comprises the former Beauty, Hair, Cosmetics & Personal Care and Health trade sectors.
11 The trade sector formerly known as Services/Education has now been split to two trade categories: namely Services and Education.
12 Excludes vacancy
Excludes gross turnover rent.
Formerly known as Food & Restaurants.
Jewellery & Watches has been split out from Fashion as a standalone trade sector.
64 Frasers Centrepoint Trust
Mall
Directory
Causeway Point
1 Woodlands Square,
Singapore 738099
(65) 6894 2237
www.causewaypoint.com.sg
Northpoint City North Wing
Waterway Point
930 Yishun Avenue 2,
Singapore 769098
Yishun 10 Retail Podium
51 Yishun Central 1 Yishun 10,
Singapore 768794
(65) 6754 2300
www.northpointcity.com.sg
83 Punggol Central,
Singapore 828761
(65) 6812 7300
www.waterwaypoint.com.sg
Changi City Point
Bedok Point
YewTee Point
5 Changi Business Park Central 1,
Singapore 486038
799 New Upper Changi Road,
Singapore 467351
21 Choa Chu Kang North 6,
Singapore 689578
(65) 6511 1088
(65) 6481 1353
(65) 6465 1986
www.changicitypoint.com.sg
www.bedokpoint.com.sg
www.yewteepoint.com.sg
Anchorpoint
368 and 370 Alexandra Road,
Singapore 159952/159953
(65) 6475 2257
www.anchorpoint.com.sg
Annual Report 2019 65
Investment in PGIM Real Estate
AsiaRetail Fund Limited
Background
PGIM Real Estate AsiaRetail Fund Limited (“PGIM ARF”)
is a perpetual open-end private investment company
with the business objective of providing its shareholders
an opportunity to invest in retail malls, mixed use
properties with predominant retail component, assets
under development or re-development in Singapore and
Malaysia. PGIM ARF is managed by PGIM Real Estate, the
real estate investment business of PGIM, Inc, the global
investment management business of Prudential Financial,
Inc. (NYSE: PRU).
FCT’s Shareholding in PGIM ARF
FCT announced on 28 February 2019 the acquisition of
17.13% shares in PGIM ARF for approximately S$345.91
million and the acquisition of a further 1.67% shares on
21 March 2019 for approximately S$34.01 million. The
transactions were completed on 5 and 26 April 2019,
respectively. Post the completion of the transaction, FCT’s
total shareholding in PGIM ARF was 18.8%.
FCT’s stake in PGIM ARF was increased from 18.8% to
21.13% subsequent to shareholders’ redemption in PGIM
ARF on 30 June 2019. FCT’s stake was further increased
from 21.13% to 24.82% following another shareholders’
redemption on 30 September 2019.
FCT’s Strategy of Investment in PGIM ARF
FCT’s investment in PGIM ARF is consistent with the
Manager’s principal investment strategy to acquire
interests in quality income-producing properties used
primarily for retail purposes; to expand FCT’s presence
in the Singapore suburban retail sector; and to achieve
greater income diversification, so as to provide regular
and stable distributions to FCT’s unitholders. The Manager
is collaborating with PGIM ARF, together with FCT’s
sponsor Frasers Property Limited, to explore and identify
joint retail operating initiatives to achieve synergistic and
common benefits.
Arising from the strategic management function
and associated processes purchased along with the
acquisition, FCT’s investment in PGIM ARF has been
accounted for as a business combination. Please see
Note 8(b) of the Financial Statements.
PGIM ARF Property Portfolio Overview
As at 30 September 2019, PGIM ARF’s investment
property portfolio2 comprises five retail properties, an
office property in Singapore and two retail properties
in Malaysia. The five retail properties in Singapore are
Century Square, Tampines 1, White Sands, Hougang
Mall and Tiong Bahru Plaza. The office property is
Central Plaza and the two retail properties in Malaysia
are 1st Avenue in Penang and Setapak Central in Kuala
Lumpur. The total net lettable area (“NLA”) of PGIM ARF’s
investment portfolio is approximately 2.1 million square
feet, comprising 1 million square feet of retail space in
Singapore; 0.17 million square feet of office space in
Singapore and 0.92 million square feet of retail space in
Malaysia.
1
2
Including additional sums paid to the vendors of the transactions. Please refer to FCT’s announcements titled “Proposed acquisition of shares in PGIM Real
Estate AsiaRetail Fund Limited”, dated 28 February 2019 and 21 March 2019.
PGIM ARF completed the divestment of two of its Malaysian malls, Island Plaza and Kinta City, on 16 July 2019 and 31 July 2019, respectively. It also com-
pleted the divestment of one of its Singapore retail property Liang Court on 31 May 2019.
66 Frasers Centrepoint Trust
Investment in PGIM Real Estate AsiaRetail Fund Limited
Profile of Properties3
Singapore Properties
Century
Square
Tampines
1
Located in Tampines Central, Century Square is a modernised,
community-serving mall with new façade comprising 6 levels
of retail, entertainment and F&B establishments with open-
concept dining areas. The mall includes family-friendly services
and activity spaces such as larger nursing rooms, family car
park lots, roof deck and a 24-hour gym.
Tampines 1 offers a wide array of renowned international
fashion brands and trendy dining concepts. It is home to 179
retail and dining tenants, including beauty and fashion brands
Uniqlo, Esprit, The Editor’s Market, Daniel Wellington, Muji,
AW Lab, Vans, Sephora, Cold Storage, Daiso and many dining
offerings from Asian delights to international favourites.
Address
2, Tampines Central 5, Century
Square, Singapore 52950
Address
10, Tampines Central 1, Tampines
1, Singapore 529536
Net Lettable Area
210,195 square feet
Net Lettable Area
269,373 square feet
Annual Visits
Retail levels
15.9 million
6
Number of retail outlets
135
Number of car park spaces 298
Annual Visits
Retail levels
20.5 million
6
Number of retail outlets
179
Number of car park spaces 203
Key Tenants
Public Transport
GymmBoxx, Filmgard Cineplex,
Foot Locker, The Learning Lab
Tampines MRT Station, Tampines
Bus Interchange
Key Tenants
Public Transport
Uniqlo, Cold Storage, Muji, Gain
City, Challenger
Tampines MRT Station, Tampines
Bus Interchange
White
Sands
Hougang
Mall
White Sands is a one-stop shopping mall located in Pasir Ris
in eastern Singapore. The 6-level mall is a popular shopping
destination among weekend holiday-makers and shoppers,
it offers exciting lifestyle, dining options and convenience
shopping in an upbeat retail environment.
The mall is also a favourite and convenient stopover for
National Servicemen as part of their journey to and fro the
Pulau Tekong training camp.
Hougang Mall is located in the heartland in north-eastern
Singapore. It is popular among the residents from the nearby
communities. The key tenants include established household
vendors: Harvey Norman, FairPrice Supermarket, Popular
Bookstore and Cheng San Community Library.
Address
90 Hougang Avenue 10, Hougang
Mall, Singapore 538766
Net Lettable Area
166,361 square feet
Address
1 Pasir Ris Central Street 3, White
Sands, Singapore 518457
Annual Visits
Retail levels
14.7 million
6
Net Lettable Area
150,320 square feet
Annual Visits
Retail levels
12.4 million
6
Number of retail outlets
134
Number of car park spaces 191
Key Tenants
Public Transport
Challenger Mini, Kiddy Palace,
Saizeraya, Cookhouse by Koufu
NTUC FairPrice
Pasir Ris MRT Station, Pasir Ris
Bus Interchange
Number of retail outlets
131
Number of car park spaces 252
Key Tenants
Public Transport
NTUC FairPrice, Challenger,
Harbey Norman, Cheng San
Community Library, Mei Shi Mei
Ke by Kopitiam
Hougang MRT Station, Hougang
Central Bus Interchange
3
Source: https://www.asiamalls.com.sg/our-portfolio/properties/, accessed 1 November 2019
Annual Report 2019 67
Tiong
Bahru
Plaza
Central
Plaza
Tiong Bahru Plaza is located in the centre of the city area
amidst the charming Tiong Bahru estate, easily accessible via
the Tiong Bahru Station on the East West line.
It is a destination mall that offers an array of F&B
establishments and shopping options, serving the needs of
residents around the vicinity, business executives from Central
Plaza offices and students from the neighbouring schools.
Address
298 Tiong Bahru Road, Tiong
Bahru Plaza, Singapore 168730
Central Plaza is a 20-storey office building located within the
city centre, strategically located outside the Central Business
District at Tiong Bahru Road. The building is conveniently
located next to the Tiong Bahru MRT Station and Tiong Bahru
Plaza. Total office space is approximately 171,000 square feet.
Address
298 Tiong Bahru Road, Central
Plaza, Singapore 168730
Net Lettable Area
171,000 square feet
Annual Visits
12.4 million
Net Lettable Area
215,000 square feet
Number of storeys
20
Annual Visits
Retail levels
19.2 million
5
Number of retail outlets
152
Number of car park spaces 338
Key Tenants
Public Transport
Uniqlo, Challenger, Golden
Village, Kopitiam and NTUC
FairPrice Finest,
Tiong Bahru MRT Station, public
buses
Public Transport
Tiong Bahru MRT Station, public
buses
Profile of Properties
Malaysia Properties
1st Avenue
Setapak Central
1st Avenue is located in the heart of George Town along Jalan
Magazine, Penang. The 7 retail levels offer a wide range of
fashion, leisure, entertainment and dining outlets for the style-
conscious urban individual living and working in Penang.
Previously known as KL Festival City, Setapak Central is located
along Jalan Genting Klang in Kuala Lumpur. The 4-storey mall
is home to more than 200 stores with anchor tenants such as
Parkson, Econsave and MBO Cinemas.
The mall is popular among young executives and professionals
as well as international and domestic travellers staying in the
nearby hotels.
Setapak Central offers a complete lifestyle experience with a
wide range of amenities such as baby nursing rooms, surau,
interactive directories and complimentary wireless internet.
Address
1st Avenue Mall Sdn Bhd, 182
Jalan Magazine, 1st Avenue,
Penang, 10300 Malaysia
Address
Net Lettable Area
406,734 square feet
No. 67, Jalan Taman Ibu Kota,
Taman Danau Kota, Festival Mall
Sdn Bhd, Setapak, 53300 Kuala
Lumpur, 10300 Malaysia
Annual Visits
Retail levels
7.7 million
7
Number of retail outlets
148
Number of car park spaces 642
Key Tenants
Parkson, H&M, Best Denki, Red
Box Karaoke, Cotton On
Net Lettable Area
500,000 square feet
Annual Visits
Retail levels
6.2 million
4
Number of retail outlets
250
Number of car park spaces 1100
Key Tenants
Parkson, H&M, Ecosave, MBO
Cinemas, Cotton On
68 Frasers Centrepoint Trust
Investment in
Hektar REIT
As at 30 September 2019, 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, Kulim Central (Kedah) and Segamat Central (Johor).
The properties in H-REIT portfolio have a total net lettable area of 2.0 million square feet and a combined value of
RM1.2 billion.
Hektar Property Profile#
State
Title
Net Lettable Area (Retail), square
feet as at 31 Dec 2018
Tenancies as at 31 Dec 2018
Occupancy as at 31 Dec 2018
Visitor Traffic FY2018 (million)
Acquisition Price (million RM)
Valuation (million RM)
as at 31 Dec 2018
Subang
Parade
Mahkota
Parade
Selangor
Melaka
Wetex
Parade
Johor
Freehold
Leasehold(a)
Freehold
508,876
519,542
171,305
113
88.2%
7.8
280.0
437.0
115
96.0%
8.3
232.0
328.0
72
98.5%
4.3
117.5
138.5
Central
Square
Kedah
Freehold
310,152
64
96.9%
4.5
83.0
96.0
Kulim
Central
Kedah
Segamat
Central
Johor
Freehold
Leasehold(b)
299,613
220,768
79
93.5%
4.0
98.0
115.0
49
78.6%
3.2
106.1
107.0
(a) Leasehold is until year 2101.
(b) Leasehold is unttil year 2116.
#
Source: H-REIT Annual Report 2018 and its website at http://www.hektarreit.com/
Hektar REIT’s Top 10 Tenants#
The top ten tenants in the Hektar’s portfolio contributed approximately 30.4% of total monthly rental income.
Tenant
Parkson
The Store
Trade Sector
Department Store / Supermarket
Department Store / Supermarket
Seleria Food Court
Food & Beverage
MBO Cinemas
Leisure & Entertainment / Sports & Fitness
Giant
Mr DIY
Department Store / Supermarket
Houseware & Furnishing
MM2 Starscreen
Leisure & Entertainment / Sports & Fitness
Guardian
Watsons
KFC
Health & Beauty
Health & Beauty
Food & Beverage
Top 10 Tenants (By Monthly Rental Income)
Other Tenants
Total
1
Based on monthly rental income for December 2018.
NLA
(Sq ft)
% of
Total NLA
% of
Monthly Rental Income1
254,009
273,198
39,521
88,670
96,283
74,247
79,404
12,164
10,296
15,786
943,578
1,081,229
12.5%
13.5%
2.0%
4.4%
4.8%
3.7%
3.9%
0.6%
0.5%
0.8%
46.7%
53.3%
2,024,807
100.0%
9.6%
5.9%
2.9%
2.4%
1.9%
1.8%
1.7%
1.6%
1.4%
1.2%
30.4%
69.6%
100.0%
Annual Report 2019 69
Tenancy Mix#
As at 31 December 2018
The largest rental contributors to the portfolio are tenants from the fashion and footwear categories as well as food
and beverage segment. Both segments contributed towards 42% of portfolio’s total rental income. In terms of NLA
composition, department stores and supermarkets continue to dominate the portfolio by taking up 37% of all
available NLA.
Fashion & Footwear
Food & Beverage / Food Court
Department Store / Supermarket
Leisure & Entertainment, Sports & Fitness
Health & Beauty
Electronics & IT
Gifts / Books / Toys / Specialty
Homewares & Furnishing
Education / Services
Total
*
#
Based on monthly rental income for December 2018.
Source: H-REIT Annual Report 2018 and its website at http://www.hektarreit.com/
By Rental Income*
By Net Lettable Area
22%
20%
18%
12%
10%
8%
4%
4%
2%
10%
11%
37%
21%
4%
6%
4%
6%
1%
100.0%
100.0%
Portfolio Lease Expiry Profile#
As at 31 December 2018
A total of 245 tenancies will expire in 2019 representing approximately 38% of NLA and 45% of monthly rental income
as at 31 December 2018. H-REIT’s Manager’s strategy is to continue tenancy remixing exercises by refreshing the tenant
mix as tenant contracts expire. Key tenancies are secured with options-to-renew and are usually confirmed six months
prior to their expiry.
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 2018
FY 2019
FY 2020
245
123
124
766,787
408,214
690,527
38%
20%
34%
45%
26%
29%
*
#
Based on monthly rental income for December 2018.
Source: H-REIT Annual Report 2018 and its website at http://www.hektarreit.com/
70 Frasers Centrepoint Trust
Risk
Management
Effective risk management is a
fundamental part of FCT’s business
strategy. Key risks, mitigating
measures and management
actions are continually being
identified, reviewed and monitored
by management of the Manager
(“Management”) as part of the
Manager’s enterprise-wide risk
management (“ERM”) framework.
Recognising and managing risks
are central to the business and for
protecting unitholders’ interests.
Governance and Oversight
The Board of Directors of the
Manager is responsible for the
governance of risks and ensuring
that the Manager maintains a
robust system of risk management
and internal controls. The Board
is assisted by the Audit, Risk and
Compliance Committee (“ARCC”)
which provides oversight on risk
management.
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.
The Manager seeks to benchmark its
ERM framework 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
2018 and the Risk Governance
Guidance for Listed Boards issued by
the Corporate Governance Council in
May 2012.
Risks are reported at the operational
level using a Risk Scorecard which
captures risks, risk ratings, mitigating
measures and timeline for action
items. 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 the ARCC on
a regular basis.
Risk tolerance statements, which
set out the nature and extent of
significant risks which the Manager
is willing to take in achieving its
strategic objectives, are reviewed
annually. The tolerance limits are
monitored and reported to the ARCC
on a half yearly basis.
Formal risk reviews take place half
yearly and the Risk Scorecard is
updated regularly. On a yearly basis,
ERM validation is held with the
Management. Key risks have been
identified and the corresponding
mitigating measures taken are
adequate. The results are presented
to the ARCC to provide assurance
that the system of risk management
in place is adequate and effective to
address risks which are considered
relevant and material to the
operations.
The Manager also has in place
a Comfort Matrix framework
which provides an overview of
the mitigating strategies and
assurance processes of key financial,
operational, compliance and
information technology risks.
FCT’s ERM framework promotes a risk
management culture. The Manager
works closely with Frasers Property
Limited’s Risk Management Team
to conduct workshops to reinforce
and enhance risk management
knowledge and management
principles.
Key Risks in Financial Year 2019
The Manager identifies key risks,
assesses their likelihood and
materiality to FCT’s business and
documents corresponding mitigating
controls in a risk register. The risk
register is reviewed and updated
regularly.
Operational Risk
The Manager 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 effectiveness. Insurances are
also in place to mitigate losses
resulting from unforeseen events.
Business Continuity Plans (“BCPs”)
are regularly tested for their
effectiveness.
Human Capital Risk
The Manager has in place a career
planning and development system
and conducts regular remuneration
and benefits benchmarking to attract
and retain appropriate talent for the
business.
Liquidity Risk
In ensuring a prudent financial
structure for FCT, the Manager
adheres closely to the covenants
in the loan agreements and the
property fund appendix in the Code
on Collective Investment Schemes
issued by the Monetary Authority of
Singapore. In addition, the Manager
proactively manages FCT’s cash flow
position and requirements. FCT has
Revolving Credit Facilities of S$250
million as source of liquidity reserves
to finance its operations, asset
enhancement initiatives (“AEIs”) and
any other short-term obligations.
Please refer to page 34 under Capital
Resources on the various sources
Annual Report 2019 71
External Risk
FCT is exposed to changing retail
market trends, including manpower
shortage, stagnant pool of
prospective tenants, e-commerce
changing consumer shopping
behavior and increase in mobility
of shoppers to regional cities. The
Manager continuously seeks to
strengthen FCT’s competitiveness
through optimising tenant mix,
revitalizing mall concepts and AEIs.
Fraud and Corruption Risk
The Manager does not condone any
acts of fraud, corruption or bribery
by employees in the course of our
business activities. The Manager
adheres to the various policies and
guidelines established by the Group,
including a Code of Business Conduct
and an Anti-bribery policy, to guide
employees on business practices,
standards and conduct expected
during their employment with the
Group.
The Manager has put in place
a whistle-blowing policy (the
“Whistle-Blowing policy”). The
Whistle-Blowing policy provides
an independent feedback channel
through which matters of concern
about possible improprieties in
matters of financial reporting,
suspected fraud and corruption
or other matters may be raised by
employees and any other persons in
confidence and in good faith, without
fear of reprisal. The ARCC reviews
and ensures that independent
investigations and appropriate
follow-up actions are carried out.
More details can be found in the
Corporate Governance section of this
Annual Report on pages 93 to 123.
of funds availability and their
utilisations. The Manager 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, having due regard to
market conditions and outlook.
Interest Rate Risk
Interest rate risk is proactively
managed by the Manager with
the primary objective of limiting
the extent to which net interest
expense could be affected by adverse
movements in interest rates. A
major portion of FCT’s outstanding
borrowings are at fixed interest rates
in accordance with the Manager’s
hedging policy.
Credit Risk
The Manager 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 fixed deposits are placed with
regulated financial 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
affect FCT’s operations and results.
The Manager 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 briefings.
Technology Risk
Digital disruption and the future
of work that are enabled by digital
technology offer new opportunities
and challenges. The Frasers Property
Group (the “Group”), of which the
Manager is part of, continues to
build digital capabilities and invest
in new technologies to ensure
that our business is future-ready.
Group-wide policies and procedures
have been put in place to ensure
the confidentiality, availability and
integrity of IT systems, as well as to
ensure that cybersecurity threats
are managed. Disaster recovery
plans and incident management
procedures have been developed and
are tested regularly. Measures and
considerations have also been taken
to enable effective privileged access
monitoring, patch management,
data security, data protection and
safeguard against prolonged service
unavailability of critical IT systems.
Periodic trainings are conducted
for new and existing employees to
raise IT security awareness. External
professional service providers are
engaged to conduct independent
vulnerability assessment and
penetration tests to further
strengthen the IT systems.
72 Frasers Centrepoint Trust
Sustainability
Report
Contents
About this Report
Board Statement
Our Sustainability Framework
Managing Sustainability
Acting Progressively
Consuming Responsibly
Focusing on People
Community Connectedness
GRI Content Index
73
74
75
76
80
83
86
89
90
Waterway Point
About this
Report
Annual Report 2019 73
This Sustainability Report covers Frasers Centrepoint Trust’s (“FCT’s”)
Environmental, Social and Governance (ESG) performance for all FCT
properties from 1 October 2018 to 30 September 2019 (FY2019).
We have prepared this Report in accordance with the sustainability
reporting requirements set out in the SGX-ST Listing Manual (Rules
711A and 711B) and continue to prepare the Report in accordance with
the GRI Standards (2016): Core Option.
Report Scope
Data disclosed in this Sustainability Report covers all properties owned
by FCT in Singapore unless stated otherwise. As FCT operates as a
REIT, the employee related information disclosed refer to the activities
and performance of Frasers Centrepoint Asset Management (the
“Manager” or “FCAM”). As the Manager of FCT, FCAM strives to support
sustainability efforts by encouraging good sustainability practices at
our properties. In addition to FCAM employees, we have also included
health & safety data of our contractor’s employees working at our
properties.
Our data is reported in good faith and to the best of our knowledge.
Together with the other information set out in our Annual Report,
this Sustainability Report provides a comprehensive and transparent
reporting to our stakeholders.
Feedback
We are always improving our sustainability efforts and
your feedback is important to us. Please contact:
Mr. Chen Fung Leng
Vice President, Investor Relations
Frasers Centrepoint Trust
Email: fungleng.chen@frasersproperty.com
74 Frasers Centrepoint Trust
Sustainability Report
Board
Statement
We are pleased to present FCT’s fifth Sustainability Report for
FY2019, which outlines our approach to sustainability as well as our
performance for the reporting period.
During the year, FCT participated in its inaugural GRESB Real Estate
Assessment 2019. This is an investor-driven global Environmental,
Social and Governance (“ESG”) benchmark for the real estate industry
which saw participation from more than 1,000 property companies,
real estate investment trusts (REITs), funds, and developers across 65
countries. We are pleased that FCT achieved a rating of 3 stars out
of the maximum 5 stars in the assessment and scored 72 out of the
maximum 100 points, which is on par with the average amongst all
the GRESB participants but below the peer group score of 75. The
GRESB assessment is useful in helping us identify areas of strengths and
weaknesses in our ESG, and to focus on areas that need improvement.
The assessment also serves as benchmark to measure our performance
against our peers and the global real estate industry.
We believe that sustainability issues are important to our business
and they are part of our strategy formulation. In our first sustainability
reporting in FY2015, we published the material ESG topics relevant to
our business. These ESG topics remain relevant to our business and we
continue to assess and monitor them accordingly.
FCT’s sustainability strategy and its approach are aligned to the
Sustainability Framework (the “Framework”) developed by our
sponsor Frasers Property Limited in FY2018 (the “Sponsor” or “Frasers
Property”) which comprises three pillars, namely “Acting Progressively”,
“Consuming Responsibly” and “Focusing on People”. These three pillars
encompass 13 corresponding Environment, Social and Governance
(ESG) focus areas. The Framework also maps out the priorities of the
Frasers Property Group (the “Group”) in its sustainability drive through
to 2030, one of which is to move towards carbon neutral by proactively
reducing carbon emissions of our properties.
We strive to “Act Progressively” through fair and ethical business
practices that are compliant with local regulations as we work towards
our economic goals. “Consuming Responsibly” aims to reduce our
environmental footprint through cultivating awareness in sustainable
conservation and efficient use of resources. The third pillar “Focusing
on People” keeps us mindful of our stakeholders’ concerns and to
engage them on multiple platforms to improve on the wellbeing of our
stakeholders and the environment.
Our management works closely with the Group’s Sustainability Steering
Committee (SSC) and Sustainability Working Committee (SWC) to
oversee and drive the implementation of the sustainability Framework,
to improve on the various ESG aspects and to identify future
sustainability risks and opportunities relevant to our business. The
Group has also set up a Global Sustainability taskforce this year to help
the business units and REITs in the Group to establish their sustainability
workplan and targets.
We look forward to your support as we continue the journey to improve
our sustainability efforts for FCT and its stakeholders.
Board of Directors
Frasers Centrepoint Asset Management Ltd.
as Manager of Frasers Centrepoint Trust
Annual Report 2019 75
Our Sustainability
Framework
The Sustainability Framework sets out the sustainability priorities for Frasers Property towards 2030. The Framework
is driven by three pillars, namely “Acting Progressively”, “Consuming Responsibly” and “Focusing on People” which are
supported by the 13 ESG focus areas. The multi-disciplinary approach will ensure that our sustainability efforts are
comprehensive and will benefit all our stakeholders.
The Sustainability Framework also reaffirms our commitment to sustainability efforts and ensure alignment within FCT
and across Frasers Property Group (the “Group”).
Pillars
Acting Progressively
Consuming Responsibly
Focusing on People
Innovation
Fostering an innovation
culture that creates value
and strengthens our
competitive edge
Resilient Properties
Strengthening the resilience
and climate adaptive capacity
Risk-based Management
Comprehensive assessment to
address environmental, health
and safety risks
Responsible Investment
Incorporating social,
environment and
governance criteria in the
evaluation process
Focus Areas
Materials & Supply Chain
Achieving the sustainable
management and efficient
use of material along the
supply chain
Biodiversity
Enhancing the environment
and ecosystem through
our developments
Energy & Carbon
Increasing substantially energy
efficiency and renewable
energy used
Waste
Reducing substantially waste
generation through prevention,
reduction, recycling and reuse
Water
Increasing substantially water
efficiency and the recycling and
safe reuse of water discharged
Community Connectedness
Considering social value
principles for communities
Health & Wellbeing
Ensuring healthy and balanced
work and community
environments
Diversity & Inclusion
Empowering and promoting
the social inclusion of all,
irrespective of age, sex,
disability, race, ethnicity,
origin, religion, economic
or other status
Skills & Leadership
Developing skills and leadership
programmes that support
productive activities, creativity
and innovation to deliver
high-value
76 Frasers Centrepoint Trust
Sustainability Report
Managing
Sustainability
Sustainability Governance
The Board views sustainability as an integral part
of FCT’s business strategy. The management works
closely with the Group’s sustainability leadership
and working teams towards the carbon neutral
goal, to achieve Green Mark certification status
for our properties and to improve the health and
wellbeing of our people and stakeholders. Details
are outlined in this Sustainability Report.
The SSC guides and drives the direction of the
corporate sustainability agenda for the Group,
including reviewing the sustainability priorities
and performance. The SSC is chaired by the
Group CEO, Mr. Panote Sirivadhanabhakdi, and
comprises senior management of Frasers Property.
The SWC consists of members from the senior
and middle management of various business
units, including employees of the Manager, and
corporate functions across the Group. The SWC
implements action plans approved by the SSC
and monitors sustainability performance against
key performance indicators. In addition, the
Global Sustainability Taskforce was assembled
by the Group in FY2019 and is represented by all
business units. The Taskforce aims to establish
the sustainability action plan and targets for each
business unit through workshops and leaders’
forum, and intends to share the outcomes in the
coming year.
Stakeholder Engagement
We proactively engage with our stakeholders in
order to obtain feedback, facilitate improvements,
identify opportunities and foster collaborative
experiences to align our sustainability efforts as
a Group through 2030. The inputs provided from
our stakeholders will determine the most material
ESG topics to consider. We seek to understand
and address our stakeholders’ concerns through
various modes of engagement outlined.
• Face to face dialogue
• Partnership in promotional events
• Regular tenant feedback meetings
• Throughout the year
• Throughout the year
• Throughout the year
• Shopper surveys
• Focus group study
• Shopper surveys (no fixed period)
• Throughout the year, as-and-when required for
• Feedback via online and various social media such as
engagements on social media
Facebook, Instagram and LinkedIn and FCT/Frasers
Property websites
• Regular events to engage shoppers and their families
• Frasers Rewards, the Frasers shopper loyalty program
• Feedback forms
• Feedback to customer service staff or at customer
service counters and concierge
• Annual performance appraisals
• Communal sports and activities
Frasers Property Human Resource
• Regular department meetings
• Family Day Events
• Employee satisfaction survey
• Exchanges on Workplace by Facebook
• Exchanges on emails and calls
• Throughout the year
• Throughout the year
• Throughout the year
• Throughout the year
• Once a year
• Throughout the year
every year)
• Once in FY2019
and-when required
• Throughout the year
• Throughout the year
• Orientation and training programmes organised by
• Upon joining and throughout the year (employees received
an average of 56.1 hours of training per person in FY2019)
• Throughout the year
• Throughout the year (all employees are invited to the
Frasers Property Family Day and Dinner and Dance event,
• Investor meetings, quarterly post-results luncheons and
• Throughout the year (in FY2019, FCAM Management met
non-deal roadshows, mall tours and Annual General
over 200 investors)
Meetings
• Website, annual reports, SGXNET announcements,
• Throughout the year
presentation slides, quarterly financial results briefings
and conference calls
Key Stakeholders
Key Topics of Concern
Mode of Engagement
Frequency of Engagement and FY2019 Highlights
Tenants
Shoppers
Employees
• Maintaining high shopper traffic
• Competitive rental rates
• Collaboration in marketing and
promotional events
• Meeting our shoppers’ needs
• Quality of services and facilities
• Providing comfortable shopping
environment and family-friendly
amenities
• Considerations for safety,
accessibility and easy navigation
within the mall
• Good connectivity to public
transport
• Compensation and Benefits
• Career progression
• Continuous education and skills
upgrading
• Employee wellbeing
Property
Manager
• Key Performance Indicators (KPIs)
for the property manager
• Regular meetings
• Every month for regular meetings and ad-hoc meetings as-
Investors and
FCT Unitholders
• Business and operations
performance
• Business strategy and outlook
• Sustainability concerns
Local
Community
Regulators
and Industry
Associations
• Helping the groups in need in the
• Annual Charity Drives and Mass participation Events
• Community and mass participation events are organised
community
• Foster strong community ties and
promote family values
• Providing venue space at our malls to charitable
organisations
throughout the year
• Throughout the year
• Compliance with relevant rules and
• Participation in industry associations including REIT
• Participation in the events organised by the various
regulations
• Engagement with investors and
unitholders
• Government policies on REITs or
Real Estate sector
• Issues concerning both short and
long-term interests of the retail
industry in Singapore
Association of Singapore (REITAS), Investor Relations
industry association and by the regulator occur throughout
Professionals Association (IRPAS), Orchard Road Business
the year
Association (ORBA), Securities Investors Association
(Singapore) (SIAS) and Singapore Retailers Association
(SRA)
• Participation in briefings and consultation with
• Throughout the year
regulators such as the SGX-ST and MAS
Annual Report 2019 77
Key Stakeholders
Key Topics of Concern
Mode of Engagement
Frequency of Engagement and FY2019 Highlights
• Face to face dialogue
• Partnership in promotional events
• Regular tenant feedback meetings
• Throughout the year
• Throughout the year
• Throughout the year
• Shopper surveys
• Focus group study
• Feedback via online and various social media such as
Facebook, Instagram and LinkedIn and FCT/Frasers
Property websites
• Regular events to engage shoppers and their families
• Frasers Rewards, the Frasers shopper loyalty program
• Feedback forms
• Feedback to customer service staff or at customer
service counters and concierge
• Annual performance appraisals
• Communal sports and activities
• Orientation and training programmes organised by
Frasers Property Human Resource
• Regular department meetings
• Family Day Events
• Shopper surveys (no fixed period)
• Throughout the year, as-and-when required for
engagements on social media
• Throughout the year
• Throughout the year
• Throughout the year
• Throughout the year
• Once a year
• Throughout the year
• Upon joining and throughout the year (employees received
an average of 56.1 hours of training per person in FY2019)
• Throughout the year
• Throughout the year (all employees are invited to the
Frasers Property Family Day and Dinner and Dance event,
every year)
• Employee satisfaction survey
• Once in FY2019
• Regular meetings
• Every month for regular meetings and ad-hoc meetings as-
• Exchanges on Workplace by Facebook
• Exchanges on emails and calls
and-when required
• Throughout the year
• Throughout the year
Investors and
FCT Unitholders
• Business and operations
performance
• Business strategy and outlook
• Sustainability concerns
• Investor meetings, quarterly post-results luncheons and
non-deal roadshows, mall tours and Annual General
Meetings
• Throughout the year (in FY2019, FCAM Management met
over 200 investors)
• Website, annual reports, SGXNET announcements,
• Throughout the year
presentation slides, quarterly financial results briefings
and conference calls
• Helping the groups in need in the
• Annual Charity Drives and Mass participation Events
• Community and mass participation events are organised
• Providing venue space at our malls to charitable
organisations
throughout the year
• Throughout the year
• Compliance with relevant rules and
• Participation in industry associations including REIT
• Participation in the events organised by the various
Association of Singapore (REITAS), Investor Relations
Professionals Association (IRPAS), Orchard Road Business
Association (ORBA), Securities Investors Association
(Singapore) (SIAS) and Singapore Retailers Association
(SRA)
industry association and by the regulator occur throughout
the year
• Participation in briefings and consultation with
• Throughout the year
regulators such as the SGX-ST and MAS
Tenants
• Maintaining high shopper traffic
• Competitive rental rates
• Collaboration in marketing and
promotional events
Shoppers
• Meeting our shoppers’ needs
• Quality of services and facilities
• Providing comfortable shopping
environment and family-friendly
amenities
• Considerations for safety,
accessibility and easy navigation
within the mall
• Good connectivity to public
transport
• Career progression
• Continuous education and skills
upgrading
• Employee wellbeing
Employees
• Compensation and Benefits
Property
Manager
• Key Performance Indicators (KPIs)
for the property manager
Local
Community
Regulators
and Industry
Associations
community
• Foster strong community ties and
promote family values
• Engagement with investors and
regulations
unitholders
• Government policies on REITs or
Real Estate sector
• Issues concerning both short and
long-term interests of the retail
industry in Singapore
78 Frasers Centrepoint Trust
Sustainability Report
Materiality Assessment
In FY2015, we conducted a materiality assessment in collaboration with our Sponsor and identified
10 material ESG topics that are material to the business and our stakeholders.
This year, we reviewed our material topics and concluded that the material factors are still relevant to
our current business direction. We aligned our material topics to the 13 ESG focus areas set out in the
Sustainability Framework. We have deepened our alignment to the United Nations (“UN”) Sustainable
Development Goals (“SDGs”) to streamline our sustainability efforts and better contribute to the
global goals.
Pillars
Focus Areas
What does it mean to FCT
Material Topics & GRI Topic
Progress Towards the SDGs
SDGs
Acting
Progressively
Responsible
Investment
Risk-based
Management
Consuming
Responsibly
Energy & Carbon
We invest with long-term views that includes
financial and sustainability considerations to deliver
regular and stable distributions to our Unitholders,
and to achieve growth in FCT’s net asset value per
Unit. We target to achieve sustainable improvement
in our economic performance.
We have the duty to ensure our business is
continuously assessed for its impact to the
environment, health and safety to our stakeholders;
and to ensure we are in compliance with the relevant
environmental laws and regulations.
We have a zero-tolerance approach towards
corruption and fraud. We strive to maintain high
standards of integrity, accountability and corporate
governance.
We ensure compliance with the Code of Advertising
Practice and applicable guidelines and principles for
responsible communications and marketing.
Real estate is one of the largest users of energy,
particularly in heating and cooling. We strive to
proactively reduce energy consumption of our
properties and contribute achieving carbon neutral.
Economic
Performance1
(GRI 201)
Environmental
Compliance
(GRI 307)
Anti-corruption
(GRI 205)
Marketing and
Labelling
(GRI 417)
Energy (GRI 302)
Emissions (GRI 305)
Water
Similar to energy management, we strive to reduce
wastage of water and to recycle and reuse wherever
we can.
Water (GRI 303)
Focusing
on People
• Diversity &
Inclusion
• Skills &
Leadership
We value our employees and we seek to invest in
their learning and help them in developing their
career with us. We continuously seek to attract and
retain the human capital and talents as we continue
to grow in our business.
Health &
Wellbeing
Community
Connectedness
We maintain open-door communication with our
employees to foster trust and confidence in our
communications.
We want to provide space at our properties that our
stakeholders, including shoppers, contractors and
tenants, feel safe and comfortable to carry out their
intended activities.
We strive to foster healthy interactions with the local
communities, so as to build strong sense of belonging
and connections with them, and also to contribute
back to the community by helping the less fortunate
member of the community.
Employment
(GRI 401)
Training and
Education (GRI 404)
Labour /
Management
Relations (GRI 402)
Occupational Health
& Safety (GRI 403)
Local Communities
(GRI 413)
1
Please refer to our annual report for further details.
• 100% compliant with laws and
• Participated in GRESB for the
regulations
first time
• Building water intensity
improved by 4.5%
• Waste sent for recycling
increased by 23.6%
• Successful partnerships
with Starhub to collect over
10,000kg of e-waste
• 87% of FCAM employees
expressed high degree of
satisfaction at work
• Average training hours per
employee increased to 56.1
hours per employee
• No incidents of injuries during
the year
Boundaries
FCT
Suppliers/ Contractor and
Customers/ Tenants
Suppliers/ Contractor, and
Customers/ Tenants
Customers/ Tenants
FCT,
Customers/ Tenants
FCT,
FCT,
FCT
FCT,
FCT
Suppliers/ Contractors,
Customers/ Tenants and
NGOs/ Local Communities
FCT,
FCT,
NGOs/ Local Communities
Annual Report 2019 79
We will continue to regularly review and assess the relevance of our material topics to our business
and stakeholders.
The table below shows how our material topics correspond to our focus areas and the relevant SDGs.
The table also shows the significance of each material topic and where we have caused or contributed
to the impacts through our business relationships:
and to achieve growth in FCT’s net asset value per
Unit. We target to achieve sustainable improvement
in our economic performance.
Risk-based
Management
We have the duty to ensure our business is
continuously assessed for its impact to the
Environmental
Compliance
environment, health and safety to our stakeholders;
(GRI 307)
and to ensure we are in compliance with the relevant
environmental laws and regulations.
We have a zero-tolerance approach towards
Anti-corruption
corruption and fraud. We strive to maintain high
(GRI 205)
standards of integrity, accountability and corporate
governance.
We ensure compliance with the Code of Advertising
Marketing and
Practice and applicable guidelines and principles for
responsible communications and marketing.
Labelling
(GRI 417)
Consuming
Responsibly
Energy & Carbon
Real estate is one of the largest users of energy,
Energy (GRI 302)
particularly in heating and cooling. We strive to
proactively reduce energy consumption of our
Emissions (GRI 305)
properties and contribute achieving carbon neutral.
Pillars
Acting
Progressively
Focus Areas
What does it mean to FCT
Material Topics & GRI Topic
Responsible
Investment
We invest with long-term views that includes
financial and sustainability considerations to deliver
Economic
Performance1
regular and stable distributions to our Unitholders,
(GRI 201)
Boundaries
FCT
Progress Towards the SDGs
SDGs
• 100% compliant with laws and
regulations
• Participated in GRESB for the
first time
FCT,
Suppliers/ Contractor and
Customers/ Tenants
FCT,
Suppliers/ Contractor, and
Customers/ Tenants
FCT
FCT,
Customers/ Tenants
Water
Similar to energy management, we strive to reduce
Water (GRI 303)
wastage of water and to recycle and reuse wherever
we can.
FCT,
Customers/ Tenants
Focusing
on People
• Diversity &
Inclusion
We value our employees and we seek to invest in
their learning and help them in developing their
Employment
(GRI 401)
FCT
career with us. We continuously seek to attract and
• Skills &
retain the human capital and talents as we continue
Training and
Leadership
to grow in our business.
Education (GRI 404)
We maintain open-door communication with our
Labour /
employees to foster trust and confidence in our
communications.
Management
Relations (GRI 402)
Health &
Wellbeing
We want to provide space at our properties that our
Occupational Health
stakeholders, including shoppers, contractors and
& Safety (GRI 403)
tenants, feel safe and comfortable to carry out their
intended activities.
Community
We strive to foster healthy interactions with the local
Local Communities
Connectedness
communities, so as to build strong sense of belonging
(GRI 413)
and connections with them, and also to contribute
back to the community by helping the less fortunate
member of the community.
FCT,
Suppliers/ Contractors,
Customers/ Tenants and
NGOs/ Local Communities
FCT,
NGOs/ Local Communities
• Building water intensity
improved by 4.5%
• Waste sent for recycling
increased by 23.6%
• Successful partnerships
with Starhub to collect over
10,000kg of e-waste
• 87% of FCAM employees
expressed high degree of
satisfaction at work
• Average training hours per
employee increased to 56.1
hours per employee
• No incidents of injuries during
the year
80 Frasers Centrepoint Trust
Sustainability Report
Acting
Progressively
Why
Acting
Progressively
important?
How
does FCT
manage this?
Acting Progressively
We are committed to strengthening the progressiveness
and resilience of our business in the competitive retail
sector. Guided by our unifying idea of ‘experience
matters’, we strive to deliver exceptional experience to
our unitholders and stakeholders which differentiates
FCT from its peers. We foster a progressive mindset that
consider risks, opportunities and sustainability in business
decisions and management of our properties.
Which SDGs
do FCT
contribute to?
Policies
Establish policies to build business
resilience and remain competitive
Practices
Adopt progressive practices to move
forward on all focus areas
Highlights
in FY2019
No known incident of breaches of
environmental laws and regulations
No confirmed incident with regards to
bribery and corruption reported
No known incidents of non-compliance
with regulations and voluntary codes in
relation to marketing communications
Participated in GRESB for the first
time and achieved 3 stars out of the
maximum 5 stars
Annual Report 2019 81
Risk-Based Management
FCT recognises that strong corporate governance plays a critical role to our overall success. We aim to achieve this
through good business ethics and transparency while putting in place a robust framework of controls, policies and
processes that are in line with the appropriate governance standards and regulations.
We conduct all our business activities fairly and ethically. We ensure that our practices are in compliance with relevant
laws and regulations such as the Code of Corporate Governance 2018, Code of Advertising Practice, listing rules and
regulations set out by SGX-ST and the MAS Securities and Futures Act. We have a zero-tolerance approach towards
corruption and fraud, and we have put in place the following corporate policies established by our Sponsor to guide the
conduct of our employees:
- Code of Business Conduct
- Whistle-blowing Policy
- Anti-bribery Policy
- Competition Act Compliance Manual
- Personal Data Protection Act Policy
- Environment, Health and Safety Policy
- Legal and Regulatory Compliance Manual
- Policy on Dealing in Units of FCT and Reporting Procedures
- Policy for Prevention of Money Laundering and Countering the Financing of Terrorism
- Policy on Outsourcing
- Treasury Policy
To evaluate the Manager’s activities, an internal audit function is in place to provide an independent appraisal and
assurance of the adequacy and effectiveness of the existing controls. The internal audit function sits within the Frasers
Property Group. Details on the internal audit can be found on page 114 to 115 of this Annual Report.
82 Frasers Centrepoint Trust
Sustainability Report
Responsible Investment
FCT invests in green properties as we believe that sustainability is key to differentiate our properties, remain competitive
and create long-term value to Unitholders. We periodically assess our properties to identify opportunities to improve
our properties’ performance to better serve our tenants and customers through asset enhancement initiatives (“AEI”).
Three of our properties are certified by the Building Construction Authority (“BCA”). Causeway Point mall is certified to
the highest certification – BCA Green Mark Platinum. Northpoint City North Wing is certified to BCA Green Mark Gold
and YewTee Point is certified to BCA Green Mark.
This year we participated in our inaugural GRESB Real Estate Assessment. We achieved an average GRESB Score of 72
points, on par with the GRESB average score and attained 3 stars out of the maximum 5 stars. We strive to improve our
score in the next submission.
GRESB Highlights
72
100
GRESB Score
GRESB Average
72
Green Star
Peer Average
75
79
100
Environment
GRESB Average
65
GRESB Real Estate
Assessment Rating
Peer Average
71
3
4th
Peer Comparisson
Asia | Retail, Shopping Center | Listed
Out of 6
As a property manager, we play an important role in driving the sustainability agenda in the real estate sector.
We actively participate in various professional and business associations including:
- Securities Investors Association (Singapore) (SIAS)
- REIT Association of Singapore (REITAS)
-
- Orchard Road Business Association (ORBA)
- Singapore Retailers Association (SRA)
Investor Relations Professionals Association (IRPAS)
Annual Report 2019 83
Consuming
Responsibly
Consuming Responsibly
Why
is Consuming
Responsibly
important?
We continuously explore solutions to manage and
reduce our resource consumption. We respect the
environment and we are committed to reducing
our environmental footprint through responsible
consumption and resource-efficient practices.
Which SDGs
do FCT
contribute to?
How
does FCT
manage this?
Policies
Establish policies that drive
responsible consumption of resources
for our people and tenants
Practices
Adopt practices that enable our
people, tenants and customers to
manage efficiently the use of resources
Highlights
in FY2019
Waste sent for recycling increased
by 23.6%
Successful partnerships with
Starhub to collect over 10,000kg
of e-waste
84 Frasers Centrepoint Trust
Sustainability Report
Energy & Carbon
We recognise our responsibility in enhancing the energy efficiency of our properties to better manage our consumption,
including our tenants’. We strive to develop a culture that promotes energy-efficient practices to reduce our carbon
footprint.
Building Energy Consumption4
Financial Year ended 30 September
(million kWh)
Building Energy Intensity5
Financial Year ended 30 September
(kWh/m2)
29.4
29.8
37.3
185.6
188.4
199.0
FY2017
FY2018
FY2019
FY2017
FY2018
FY2019
Building GHG Emissions3
Financial Year ended 30 September
(‘000 tonnes of CO2e)
12.4
12.5
GHG Emissions Intensity6
Financial Year ended 30 September
(kgCO2e/m²)
15.6
78.6
79.0
83.3
FY2017
FY2018
FY2019
FY2017
FY2018
FY2019
Our overall building energy intensity increased by 5.6% year-on-year to 199.0 kWh/m2. Likewise, our greenhouse gas
(“GHG”) emissions intensity increased to 83.3 kgCO2e/m2 in tandem with the increase in energy consumption. The
increase in energy intensity was attributed to higher occupancy and a rise in the proportion of food & beverage (“F&B”)
tenants in our portfolio during the year. High occupancy drives higher energy demand, particularly for air conditioning
and mechanical ventilation systems. F&B businesses tend to consume higher energy compared to other trades for the
same area, hence a rise in the proportion of F&B also increases overall energy intensity. Other contributing factors to
higher energy intensity was the increased chiller utilisation at Bedok Point due to rise in the mall’s occupancy and the
installation of an additional escalator and extended operating hours at YewTee Point due to increased shopper traffic
demand.
We are aware of our energy consumption and continuously monitor our energy use to improve our energy management.
We are always seeking opportunities to improve the energy efficiency of our properties. Our BCA Green Mark certified
properties are subjected to energy audits every three years to ensure that the systems are operating efficiently.
2
3
4
5
6
Includes Waterway Point which was acquired in Q3 FY2019.
Excludes Waterway Point for comparison against FY2018 and FY2017.
Includes Waterway Point which was acquired in Q3 FY2019.
Excludes Waterway Point for comparison against FY2018 and FY2017.
Source of GHG Emissions Factors: Singapore - Singapore Energy Statistics 2019
Annual Report 2019 85
Water
We are mindful and actively manage our water consumption through initiatives to reduce water wastage. For example,
we installed fittings in our water taps in our properties that help to reduce water waste. These fittings received positive
rating the Water Efficiency Labels Scheme (“WELS”) from the Public Utilities Board (“PUB”). All our properties achieved
PUB’s Water Efficient Building (“WEB”) Certification.
Building Water Consumption
Financial Year ended 30 September
(‘000 m3)
478.7
488.07
Building Water Consumption
Financial Year ended 30 September
(m3/m2)
560.7
3.0
3.1
3.1
FY2017
FY2018
FY2019
FY2017
FY2018
FY2019
In FY2019, our overall building water consumption increased to 560,723 m3, an increase of 14.8% compared to FY2018.
This increase is mainly attributed to the inclusion of Waterway Point, which FCT acquired during in Q4 of FY2019. Our
water intensity has also increased by 1.7% to 3.13 m3/m2 due to the increase in occupancy rate as well.
Waste
We are committed to encouraging and supporting waste reduction through various initiatives in our properties to
promote the awareness and action in recycling among our tenants, employees and shoppers.
Total weight of
non-hazardous waste collected
Financial Year ended 30 September
(tonnes)
Total weight of
waste sent for recycling
Financial Year ended 30 September
(tonnes)
Recycling rate
Financial Year ended 30 September
(%)
10,033
602.5
6.0%
6.2%
6.0%
7,1849
7,832
428.0
487.4
FY2017
FY2018
FY20198
FY2017
FY2018
FY20198
FY2017
FY2018
FY20198
We monitor the waste disposal and recycling activities at our properties. Our properties generated a total of 10,033
tonnes of waste, of which 602.5 tonnes was sent for recycling and the rest disposed in accordance with the Singapore
regulations. This reflects the continuous efforts of our partnership with various organisations such as Starhub, on waste
collection and recycling and the introduction of green facilities, such as the reverse vending machines (“RVM”), at our
malls. Since the start of our partnership with Starhub, we have collected 10,758 kg of e-waste for recycling through
the e-waste bins placed at our properties. This year, we introduced the RVMs at two of our properties YewTee Point
and Waterway Point in partnership with Fraser & Neave (“F&N”), NTUC Fairprice and TOMRA Recycling Technology Co.
Ltd. The RVMs encourage our shoppers to recycle plastic bottles or aluminum cans. The shopper receives F&N discount
coupons for every four plastic bottles or aluminum cans deposited into the RVMs. The campaign collected 50,604 of
bottles and cans between January 2018 and April 2019. Due to the positive response, we plan to introduce more RVMs
at our other properties from the end of 2019.
7 Water consumption restated based on availability of actual data against previously estimated data, and changes in 2017 emissions factors by official
sources in its latest report.
8 Waste data includes Waterway Point which was acquired in Q3 FY2019.
9
Excludes Waterway Point for comparison against FY2018 and FY2017.
86 Frasers Centrepoint Trust
Sustainability Report
Focusing on
People
Focusing on People
Why
is Focusing
on People
important?
People drive our business growth and success. We strive
to have a diverse, safe and healthy work environment
for our people to perform in their work. We also want
to support and protect the interests and wellbeing of
all our stakeholders – employees, tenants, customers
and communities through our business practices and
community investments.
Which SDGs
do FCT
contribute to?
How
does FCT
manage this?
Policies
Establish policies that focus on
strengthening our human capital and
leaving positive impacts in communities
where we operate
Practices
Adopt practices that enable our
business to develop our people and
contribute positively to the community
Highlights
in FY2019
87% of FCAM employees expressed high
satisfaction at work
Average training hours per employee
increased to 56.1 hours per employee
No incidents of injury during the year
Annual Report 2019 87
Diversity & Inclusion
We believe every employee could contribute to FCT and the Group with their experiences, perspectives and cultures,
and collectively they become diverse and valuable assets that enable us to deliver the shared value of ‘experience
matters’.
An inclusive and collaborative workforce fuels our business growth and long-term success. We strive to provide equal
and fair opportunities to all our employees in FCT, guided by the Group’s commitment to the Tripartite Alliance for Fair
& Progressive Employer Practices (TAFEP) in Singapore and the Singapore National Employer Federation. Along with
the Group, an open performance appraisal system is also applied to all employees of the Manager, providing employees
with opportunities based on merit.
FCAM’s Employee Profile
Financial Year ended 30 September
Number and Rate of
New Employee Hires
Financial Year ended 30 September
Number and Rate of
Employee Turnover
Financial Year ended 30 September
Gender Diversity
New Hire by Gender
Turnover by Gender
FY2017
FY2018
FY2019
n Male
n Female
4(30.8%) 5(33.3%) 8(44.4%)
9(69.2%) 10(66.7%) 10(55.6%)
n Male
n Female
FY2017
FY2018
FY2019
0(0%)
2(100%)
2(100%)
3(100%)
0(0%)
0(0%)
n Male
n Female
FY2017
FY2018
FY2019
0(0%)
0(0%)
1(100%)
4(100%)
2(100%)
0 (0%)
Age Diversity
New Hire by Age Group
Turnover by Age Group
FY2017
FY2018
FY2019
FY2017
FY2018
FY2019
FY2017
FY2018
FY2019
n < 30 years old
0(0%)
0(0%)
1(5.6%)
n < 30 years old
0(0%)
0(0%)
0(0.0%)
n < 30 years old
0(0%)
1(50%)
n 30-50 years old 10(76.9%) 13(86.7%) 13(72.2%)
n 30-50 years old
2(67%)
2(100%)
1(50%)
n 30-50 years old
4(100%)
0(0%)
0 (0%)
0 (0%)
n > 50 years old
3(23.1%) 2(13.3%) 4(22.2%)
n > 50 years old
1(33%)
0(0%)
1(50%)
n > 50 years old
0(0%)
1(50%)
1(100%)
The employee data10 disclosed in this report is in relation to the Manager. As at 30th September, FCT has a total of 18
employees. All employees are full-time employees of the Manager. Majority of FCAM’s employees are within the 30-50
years old age group, making up 72.2% of the total workforce. The Manager hired 2 new employees with 1 turnover in
FY2019.
This year, the Manager conducted an employee satisfaction survey to engage with its employees. The objective of the
survey was to gauge the employees’ feedback on work-life balance, satisfaction at work and obtain insights on areas of
improvements. Key highlights of the survey outcome include:
• Employees feel a strong connection with FCT and feel proud to be part of the team
• 68% of the employees felt positive with regards to their career prospects at FCT
• More than half of the employees feel that they are valued and rewarded during their tenure
• 87% of the employees felt that they are improving their skills and learning, above their daily jobs
• Employees expressed high degree of job satisfaction within FCAM
10 All information disclosed are full-time permanent employees of FCT.
88 Frasers Centrepoint Trust
Sustainability Report
Skills & Leadership
At FCT, we believe that employees are key to our long-term growth and value. As such, we empower and invest in the
development of our talents to equip our people with the relevant skills and knowledge to enhance our viability to excel
in the disruptive age as well as to help them achieve their potential.
The Group’s in-house training facility, the Learning Academy, provides a comprehensive range of Learning and
Development (“L&D”) programmes and training opportunities to support personal and career development for our
people. Besides the L&D training, the Learning Academy also conduct the following knowledge sharing sessions:
• Lunch and Learn Series - a peer-learning platform where colleagues from various business units are invited to share
their experiences on interesting projects
• Heart-to-Heart Talk Series - an employee engagement platform for our younger colleagues in Singapore to share
their thoughts about the Group and their aspirations with senior management
In FY2019, we recorded a an average of 56.1 training hours per employee, a 4% increase from a year ago. The average
training hours achieved per employee remains higher than the targeted 40 hours required by the Group.
Average Training Hours by Gender
Financial Year ended 30 September
Average Training Hours by Category
Financial Year ended 30 September
Average Training Hours per Employee
Financial Year ended 30 September
66.5
66.7
55.7
50.3
63.8
50.0
69.7
48.5
56.1
57.9
53.9
56.1
66.6
23.3
26.0
FY2017
FY2018
FY2019
FY2017
FY2018
FY2019
FY2017
FY2018
FY2019
n Male
n Female
n Executive
n Non-executive
Health & Wellbeing
Health, wellbeing and safety are top priorities within the Group. We emphasise on providing safe environment for our
employees, tenants, shoppers and other stakeholders by putting in place policies and procedures to promote workplace
safety awareness and to seek continuous improvements.
We have implemented OHSAS 18001 and SS506 Part1:2009 occupational health and safety management system at our
properties, in line with the Group’s direction and we comply with the Group’s Workplace Health and Safety Policy. Our
properties are “BizSAFE Level Star” certified by the Workplace Safety and Health Council.
There were zero incident of injury or fatality in FY2019. There was also no breaches of health and safety regulations at
our properties during the year.
FCAM employees also participated in various health and safety activities organised by the Group which include “Eating
Healthy 9-5”, “Watch and Eat with Your Colleagues”, “Walk-Jog @ Kent Ridge Park”, “Frasers Property Global Wellness
Challenge” and health screening for all employees.
The Group engaged Aetos, a security consultant, to conduct a safety audit on all our Singapore retail (which includes
FCT properties) and office properties. The audit focused on maintenance and improvement measures for each of the
malls. One of the improvement initiatives which followed from the audit was the installation of bollards as pedestrian
safeguard at drop-off points of our retail properties.
Our retail properties also work with the authorities on raising awareness on terrorism through participation in the
SGSecure Roadshow. During the year, Northpoint City hosted the launch of the SGSecure Roadshow, a national
movement aimed at raising corporate and public awareness on terrorism threat. The Singapore Police Force and
Singapore Civil Defence Force demonstrated a live simulation of terror attack at one of our tenant’s shops. The exercise
provided visitors with a live demonstration on how to prevent, deal with and recover from a terrorist attack and improve
the community’s response and mobilisation in an actual ordeal.
Annual Report 2019 89
Community
Connectedness
We take pride in enriching and connecting with the community. FCT hopes to demonstrate our corporate citizenship by
playing an active role to foster positive changes and enable inclusion in the society. Through our initiatives, we leverage
on our diverse resources and competencies to look after those in need. We also collaborate with organisations to
further compound our collective efforts.
Reaching Out to Those in Need
With the support of donations from shoppers, Bedok Point and YewTee Point jointly donated 800 kilograms
of rice to Shan You Wellness Centre in April 2019, where it was repacked into rations for the old and
underprivileged.
Supporting Community Connectedness and
Diversity & Inclusion
FCAM was delighted to support Blossom Seeds’
for their inaugural Charity Day to raise funds for
the furnishing and fitting out of their new day
activity centre for senior citizens at Canberra Street.
Blossom Seeds is an organisation that supports
lonely and senior citizens in need, regardless of race
and religion, and helps them to integrate with the
society.
We contributed in both cash contributions (S$5,000)
and participated in their inaugural fundraising event
“Ready Set Gold” on 6 March 2019. The event saw
an overwhelming response in participation from
the public and the support from the Minister Ong Ye
Kung, who is Minister for Education and the member
of parliament for Sembawang GRC.
Mr Lim Swee Say, Member of Parliament for East Coast GRC,
addressing the participants at the launch of the event at Bedok
Point on 4 August 2019.
Dr Chew Tuan Chiong, then-CEO of FCAM receiving a plaque of
appreciation from Minister Ong Ye Kung, Minister for Education
and the member of Parliament for Sembawang GRC.
Support the Health and Wellbeing of the Elderly
Bedok Point was proud to sponsor the event venue
for a health awareness event organised by SATA.
The event, which was launched on 4 August 2019
and graced by Mr Lim Swee Say, the Member of
Parliament for East Coast GRC, featured on-site
interactive machines that assess fall risk for the
elderly. Fall risk is common for the elderly and can be
dangerous especially for the elderly who are frail, as
fall could lead to risk of fracture and head injuries.
The interactive machine was designed to detect early
signs of fall risk and evaluate the elderly’s risk level
of falls and SATA can then follow-up with the elderly,
if needed, for further assessment by their doctors
and therapists. The campaign ran for 2 months at
Bedok Point from August to October 2019.
90 Frasers Centrepoint Trust
GRI Content
Index
GRI Standards
2016
Disclosure
Number
Disclosure Title
Section and Page Reference / Notes
Universal Standards
Organisational Profile
GRI 102:
General Disclosures
102-1
102-2
102-3
102-4
102-5
Location of headquarters
Location of operations
Ownership and legal form
102-6
Markets served
Name of the organisation
Frasers Centrepoint Trust
Activities, brands, products, and services
About Frasers Centrepoint Trust (Pg 2)
Corporate Information
(inside back cover)
About Frasers Centrepoint Trust (Pg 2)
About Frasers Centrepoint Trust (Pg 2)
Corporate Structure (Pg 3)
Portfolio Overview (Pg 48)
Property Profiles (Pgs 50-64)
102-7
Scale of the organisation
About Frasers Centrepoint Trust (Pg 2)
102-8
Information on employees and other workers
102-9
Supply chain
Financial Highlights (Pg 6)
Focusing on People – Diversity and
Inclusion (Pgs 87-88)
Focusing on People – Diversity and
Inclusion (Pgs 87-88)
Consuming Responsibly (Pgs 83-85)
Stakeholder Engagement (Pgs 76-77)
102-10
Significant changes to organisation and its
supply chain
About This Report – Report Scope
(Pg 73)
102-11
Precautionary principle or approach
102-12
External initiatives
102-13
Membership of associations
FCT does not specifically refer
to the precautionary approach
when managing risk; however, our
management approach is risk-based,
and underpinned by our internal audit
framework.
Managing Sustainability – Stakeholder
Engagement (Pgs 76-77)
Acting Progressively – Responsible
Investment (Pg 82)
Managing Sustainability – Stakeholder
Engagement (Pgs 76-77)
Acting Progressively – Responsible
Investment (Pg 82)
102-14
Statement from senior decision-maker
Board Statement (Pg 74)
102-16
Values, principles, standards, and norms of
behaviour
Acting Progressively – Risk-based
Management (Pg 81)
102-18
Governance structure
Corporate and Organisation Structure
(Pg 3)
Board of Directors (Pg 16-19)
Management Team (Pgs 20-21)
Corporate Governance (Pgs 93-123)
Managing Sustainability –
Sustainability Governance (Pg 76)
Strategy
GRI 102:
General Disclosures
Ethics and Integrity
GRI 102:
General Disclosures
Governance
GRI 102:
General Disclosures
GRI Standards
2016
Disclosure
Number
Disclosure Title
Stakeholder Engagement
GRI 102:
General Disclosures
102-40
List of stakeholder groups
102-41
Collective bargaining agreements
102-42
Identifying and selecting stakeholders
102-43
Approach to stakeholder engagement
102-44
Key topics and concerns raised
Reporting Practice
GRI 102:
General Disclosures
102-45
Entities included in the consolidated financial
statements
102-46
Defining report content and topic Boundaries
102-47
List of material topics
102-48
Restatements of information
102-49
Changes in reporting
102-50
Reporting period
102-51
Date of most recent report
102-52
Reporting cycle
Annual Report 2019 91
Section and Page Reference / Notes
Managing Sustainability – Stakeholder
Engagement (Pgs 76-77)
There are no collective bargaining
agreements in place.
Managing Sustainability – Stakeholder
Engagement (Pgs 76-77)
Managing Sustainability – Stakeholder
Engagement (Pgs 76-77)
Managing Sustainability – Stakeholder
Engagement (Pgs 76-77)
About this Report (Pg 73)
Structure of Frasers Centrepoint Trust
(Pg 3)
Notes to Financial Statements (Pg 139)
About This Report – Report Scope
(Pg 73)
Our Sustainability Framework (Pg 75)
Managing Sustainability – Stakeholder
Engagement (Pgs 76-77), Materiality
Assessment (Pgs 78-79)
Managing Sustainability – Materiality
Assessment (Pgs 78-79)
Consuming Responsibly - Energy &
Carbon (Pg 84), Water (Pg 85)
None
About This Report (Pg 73)
December 2018
Annual
102-53
Contact point for questions regarding the report
About This Report – Feedback (Pg 73)
102-54
Claims of reporting in accordance with GRI
Standards
About This Report (Pg 73)
102-55
GRI content index
102-56
External assurance
GRI Content Index (Pgs 90-92)
We have not sought external
assurance on this data; however we
intend to review this stance in the
future.
Management Approach
GRI 103: Management
Approach
103-1
Explanation of the material topic and its
boundary
Managing Sustainability – Materiality
Assessment (Pgs 78-79)
Topic-specific Standards
Economic Performance
GRI 103: Management
Approach
GRI 201:
Economic
Performance
Anti-corruption
GRI 103: Management
Approach
GRI 205: Anti-
corruption
103-2
103-3
201-1
103-2
103-3
205-3
The management approach and its components
Corporate Strategy (Pg 4)
Evaluation of the management approach
Direct economic value generated and distributed Financial Review (Pgs 31-33)
Financial Statements (Pgs 124-195)
The management approach and its components
Evaluation of the management approach
Confirmed incidents of corruption and actions
taken
Acting Progressively – Risk-based
Management (Pg 81)
92 Frasers Centrepoint Trust
GRI Content Index
GRI Standards
2016
Disclosure
Number
Disclosure Title
Section and Page Reference / Notes
Environmental Compliance
GRI 103: Management
Approach
GRI 307:
Environmental
Compliance
Ethical Marketing
GRI 103: Management
Approach
GRI 417: Marketing
and Labelling
Energy & Emissions
GRI 103: Management
Approach
GRI 302: Energy
GRI 305: Emissions
Water
GRI 103: Management
Approach
GRI 303: Water
103-2
103-3
307-1
103-2
103-3
417-3
103-2
103-3
302-1
302-3
305-2
305-4
103-2
103-3
303-1
The management approach and its components
Evaluation of the management approach
Non-compliance with environmental laws and
regulations
Acting Progressively – Risk-based
Management (Pg 81)
The management approach and its components
Evaluation of the management approach
Incidents of non-compliance concerning
marketing communications
Acting Progressively – Risk-based
Management (Pg 81)
The management approach and its components
Evaluation of the management approach
Energy consumption within the organization
Energy intensity
Energy indirect (Scope 2) GHG emissions
GHG emissions intensity
Consuming Responsibly – Energy and
Carbon (Pg 84)
The management approach and its components
Evaluation of the management approach
Water withdrawal by source
Consuming Responsibly – Water
(Pg 85)
Employment & Training and Education
GRI 103: Management
Approach
103-2
103-3
The management approach and its components
Evaluation of the management approach
GRI 401: Employment 401-1
New employee hires and employee turnover
GRI 404: Training and
Education
404-1
Average hours of training per year per employee
Focusing on People – Skills and
Leadership (Pg 88)
Focusing on People - Diversity &
Inclusion (Pg 88)
Focusing on People – Skills and
Leadership (Pg 88)
404-2
404-3
Programs for upgrading employee skills and
transition assistance programs
Focusing on People – Skills and
Leadership (Pg 88)
Percentage of employees receiving regular
performance and career development reviews
Focusing on People – Skills and
Leadership (Pg 88)
Labour/Management Relations
GRI 103: Management
Approach
GRI 402: Labour/
Management
Relations
103-2
103-3
402-1
The management approach and its components
Evaluation of the management approach
Minimum notice periods regarding operational
changes
Focusing on People – Diversity &
Inclusion (Pg 87)
This is currently not covered in Group-
wide collective agreements. The
notice period varies
Occupational Health and Safety
GRI 103: Management
Approach
GRI 403: Occupational
Health and Safety
Local Communities
GRI 103: Management
Approach
GRI 413:
Local Communities
103-2
103-3
403-1
403-2
103-2
103-3
413-1
The management approach and its components
Evaluation of the management approach
Workers representation in formal joint
management–worker health and safety
committees
Types of injuries and rates of injury, occupational
diseases, lost days, and absenteeism, and
number of work-related fatalities
The management approach and its components
Evaluation of the management approach
Operations with local community engagement,
impact assessments, and development programs
Focusing on People – Health and
Wellbeing (Pg 88)
FCT is represented in the Sponsor’s
Health & Safety senior management
committee.
Focusing on People – Community
Connectedness (Pg 89)
Corporate
Governance Report
Annual Report 2019 93
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.
(the "Manager"), a wholly-owned subsidiary of Frasers Property Limited ("FPL" or the "Sponsor" and together with its
subsidiaries, “FPL Group”).
In line with the listing rules of the SGX-ST (the "Listing Rules") and its obligations under the Guidelines to All Holders of a
Capital Markets Services Licence for Real Estate Investment Trust Management (Guideline No: SFA04–G07) issued by the
Monetary Authority of Singapore ("MAS"), the Manager complies with the principles of the Code of Corporate Governance
2018 (the "CG Code"). Even though the CG Code applies to annual reports covering financial years commencing from
1 January 2019, the Manager has elected to adopt and comply with Rule 710 of the listing manual of the SGX-ST (the
"SGX-ST Listing Manual") to describe its corporate governance practices with specific reference to the principles and the
provisions of the CG Code (and not the Code of Corporate Governance 2012).
The practices and activities of the Board of Directors (the “Board”) and the management of the Manager (the “Management”)
adhere closely to the provisions under the CG Code.
To the extent the practices may vary from any provision of the CG Code, the Manager will explain the reason for the
variation and how the practices nevertheless are consistent with the intent of the relevant principle of the CG Code. The
Manager is also guided by the voluntary Practice Guidance which was issued to complement the CG Code and which sets
out best practices for issuers; as this will build investor and stakeholder confidence in FCT and the Manager. A summary of
compliance with the express disclosure requirements in the principles and provisions of the CG Code is set out on pages
120 to 123.
The Manager
The Manager has general powers of management over the assets of FCT. As a manager of a REIT, the Manager holds a
Capital Markets Services Licence issued by the MAS to carry out REIT management activities.
The Manager’s main responsibility is to manage FCT’s assets and liabilities for the benefit of unitholders of FCT
(“Unitholders”). To this end, the Manager is able to set the strategic direction of FCT and make recommendations to HSBC
Institutional Trust Services (Singapore) Limited, in its capacity as trustee of FCT (the “Trustee”), on acquisitions, divestments
and enhancement of the assets of FCT. It also supervises the property manager, Frasers Property Retail Management Pte
Ltd., in its day-to-day management of the malls within FCT’s portfolio, 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 role of the Manager includes the pursuit of a business model
that sustains the growth and enhances the value of FCT and is focussed on delivering regular and stable distributions to
Unitholders. Other functions and responsibilities of the Manager include preparing annual asset plans and undertaking
regular individual asset performance analysis and market research analysis, and managing finance functions relating to
FCT (which includes financial and tax reporting, capital management, treasury and preparation of consolidated budgets).
The Values of the Manager
1.
2.
The Manager is committed to upholding and maintaining high standards of corporate governance, corporate
transparency and sustainability, and instituting sound corporate practices and controls to facilitate the Manager’s
role in safeguarding and enhancing FCT’s asset value so as to maximise returns from investments, and ultimately
the total return to Unitholders. The Manager believes that a robust and sound governance framework is an
essential foundation on which to build, evolve and innovate a business which is sustainable over the long term and
one which is resilient in the face of the demands of a dynamic, fast-changing environment.
The Manager adheres to corporate policies, business practices and systems of risk management and internal
controls, which are designed to ensure that it maintains consistently high standards of integrity, accountability
and governance in FCT and its own daily operations.
CorporateGovernance Report 94 Frasers Centrepoint Trust
3.
The Manager ensures that the business and practices of FCT are carried out in a manner that complies with
applicable laws, rules and regulations, including the Securities and Futures Act (Chapter 289 of Singapore) (“SFA”),
the SGX-ST Listing Manual, the CG Code, the Code on Collective Investment Schemes (the “CIS Code”) issued by
the MAS (including Appendix 6 of the CIS Code, the “Property Funds Appendix”), the trust deed constituting FCT
between the Manager and the Trustee dated 5 June 2006 (as amended and restated) (“Trust Deed”), as well as
the written directions, notices, codes and other guidelines that the MAS and other regulators may issue from
time to time.
The Board works with Management to ensure that these values underpin its leadership of the Manager.
The Manager is staffed by an experienced and well-qualified team who manage the operational matters of FCT and the
Manager. The Manager is appointed in accordance with the terms of the Trust Deed. The Manager can be removed by
notice in writing given by the Trustee in favour of a corporation appointed by the Trustee under certain circumstances
outlined in the Trust Deed, including where Unitholders, by a resolution duly passed by a simple majority of Unitholders
present and voting (with no Unitholder being disenfranchised) at a Unitholders’ meeting, decide that the Manager is to
be removed.
BOARD MATTERS
The Board
The Board is responsible for the overall leadership and oversight of both FCT’s and the Manager’s business, financial,
investment and material operational affairs and performance objectives, and its long-term success. The Board sets
the strategic direction of FCT and the Manager and the Manager’s approach to corporate governance, including the
organisational culture, values and ethical standards of conduct, and works with Management on its implementation across
all levels of the organisation, as well as focus on value creation, innovation and sustainability. The Board, supported by
Management, ensures necessary resources are in place for FCT and the Manager to meet its strategic objectives. Through
the enterprise-wide risk management framework of FCT and its subsidiaries (the “Group”), the Board establishes and
maintains a sound risk management framework to effectively monitor and manage risks. It also oversees Management to
ensure transparency and accountability to key stakeholder groups.
The Chairman
The chairman of the Board (the “Chairman”) leads the Board. The Chairman sets the right ethical and behavioural tone and
ensures the Board’s effectiveness by, among other things, encouraging active and effective engagement, participation by
and contribution from all directors of the Manager (the “Directors”) and facilitating positive relations among and between
them and Management. The Chairman promotes a culture of openness at Board meetings and encourages Directors
to engage in productive and thorough discussions and constructive debate on strategic, business and other key issues
pertinent to the business and operations of the Group and the Manager, leading to better decision-making and enhanced
business performance.
Role of Management
The Management is led by the Chief Executive Officer (the “CEO”) of the Manager. The CEO is responsible and is accountable
to the Board for the conduct and performance of Management. Senior Management comprising the CEO and the Chief
Financial Officer (“CFO”) of the Manager (collectively, “Key Management Personnel”) are responsible for executing the
Manager’s strategies and policies and are accountable to the Board for the planning, direction, control, conduct and
performance of the business operations of the Manager.
CorporateGovernance Report Annual Report 2019 95
Division of Responsibilities between the Chairman and CEO
The Chairman and the CEO are separate persons and the division of responsibilities between the Chairman and the CEO
is clearly demarcated. This avoids concentration of power and ensures a degree of checks and balances, an increased
accountability, and greater capacity of the Board for independent decision-making. Such separation of roles between the
Chairman and CEO promotes robust deliberations by the Board and Management on the business activities of FCT.
Relationships between the CEO and Board
None of the members of the Board and the CEO are related to one another, and none of them has any business relationships
among them.
Board Committees
The Board has formed committees of the Board (the “Board Committees”) to oversee specific areas, for greater efficiency.
There are two Board Committees, namely, the Audit, Risk and Compliance Committee (“ARCC”), and the Nominating and
Remuneration Committee (“NRC”).
Minutes of all Board Committee meetings are circulated to the Board so that Directors are aware of and kept updated as
to the proceedings, matters discussed and decisions made during such meetings, and to enable the Directors to weigh in
on any key points under consideration.
Audit, Risk And Compliance Committee (1)
Membership
Key Objectives
Mr Ho Chee Hwee Simon, Chairman (2)
Dr Cheong Choong Kong, Member
Mr Philip Eng Heng Nee, Member
Mr Ho Chai Seng, Member
Ms Koh Choon Fah, Member (3)
•
Assist Board in fulfilling responsibility for overseeing
the quality and integrity of the accounting, auditing,
internal controls, risk management and financial
practices of the Manager
Notes:
(1) Unless otherwise stated, the information provided herein is as of 30 September 2019.
(2) With effect from 1 November 2019, Mr Ho Chee Hwee Simon relinquished his role as the chairman of the ARCC and remains as a non-
executive and non-independent Director and a member of the ARCC and the NRC.
(3) Ms Koh Choon Fah was appointed as a non-executive and independent Director, a member of the ARCC and a member of the NRC with
effect from 1 October 2019. Ms Koh Choon Fah is appointed as the chairman of the ARCC with effect from 1 November 2019.
As at 30 September 2019, the ARCC is made up of non-executive Directors, the majority of whom, including the chairman
of the ARCC, are independent Directors. The members of the ARCC, including the chairman of the ARCC, are appropriately
qualified and have recent and/or relevant accounting and related financial management expertise or experience. Their
collective wealth of experience and expertise enables them to discharge their responsibilities competently.
Under the Terms of Reference of the ARCC, a former partner or director of FCT’s existing auditing firm or auditing
corporation shall not act as a member of the ARCC: (a) within a period of two years commencing on the date of his ceasing
to be a partner of the auditing firm or a director of the auditing corporation; and in any case, (b) for so long as he has
any financial interest in the auditing firm or auditing corporation. None of the members of the ARCC is a former partner
of FCT’s external auditors, KPMG LLP and none of the members of the ARCC has any financial interest in FCT’s external
auditors, KPMG LLP.
CorporateGovernance Report 96 Frasers Centrepoint Trust
AUDIT FUNCTIONS
The Terms of Reference of the ARCC provide that some of the key responsibilities of the ARCC include:
•
•
•
•
•
•
•
•
External Audit Process: reviewing and reporting to the Board the scope, quality, results and performance of the
external audit(s), its cost effectiveness and the independence and objectivity of the external auditors. It shall also
review the nature and extent of non-audit services performed by external auditors;
Internal Audit: establishing an effective internal audit function which shall be adequately qualified to perform an
effective role, adequately resourced, independent of the activities which it audits and able to discharge its duties
objectively, and to approve the hiring, removal, evaluation and compensation of the head of the internal audit
function, or the accounting/auditing firm or corporation to which the internal audit function is outsourced;
Financial Reporting: reviewing and reporting to the Board, the significant financial reporting issues and judgments
so as to ensure the integrity of the financial statements of FCT and the Manager and any announcements relating
to FCT’s and the Manager’s financial performance, and to review the assurance provided by the CEO and the CFO
that the financial records have been properly maintained and the financial statements give a true and fair view of
FCT’s and/or the Manager’s operations and finances;
Internal Controls and Risk Management: reviewing and reporting to the Board at least annually, its assessment of
the adequacy and effectiveness of the Manager’s internal controls for FCT and the Manager, including financial,
operational, compliance and information technology controls (including those relating to compliance with existing
legislation and regulations), and risk management policies and systems established by Management;
Interested Person Transactions: reviewing interested person transactions (as defined in the SGX-ST Listing Manual)
and interested party transactions (as defined in the Property Funds Appendix) (both such types of transactions
constituting “Related/Interested Person Transactions”) entered into from time to time and the internal audit
reports to ensure compliance with applicable legislation, the SGX-ST Listing Manual and the Property Funds
Appendix;
Conflicts of Interests: deliberating on resolutions relating to conflicts of interest situations involving FCT;
Whistle-blowing: reviewing the policy and arrangements by which staff of the Manager, FCT and any other persons
may, in confidence, safely raise concerns about possible improprieties in matters of financial reporting or other
matters and ensure that arrangements are in place for such concerns to be raised and independently investigated
and for appropriate follow-up action to be taken; and
Investigations: reviewing the findings of internal investigations into any suspected fraud or irregularity, or
suspected infringement of any Singapore laws or regulations or rules of the SGX-ST or any other regulatory
authority in Singapore, which the ARCC becomes aware of, and which has or is likely to have a material impact on
FCT’s operating results or financial position.
In carrying out its role, the ARCC is empowered to investigate any matter within its Terms of Reference, with full access to,
and cooperation by, Management, to seek information it may require from any Director and/or employee of the Manager.
The ARCC also has full discretion to invite any Director or executive officer to attend its meetings, and reasonable
resources to enable it to discharge its functions properly. The Chairman, non-executive Directors, the CEO, the CFO, the
head of the internal audit function, representatives of the external auditor(s), or other person with relevant experience
and expertise may attend the meetings of the ARCC at the invitation of the ARCC. The meetings serve as a forum to review
and discuss material risks and exposures of the Manager’s businesses and strategies to mitigate risks. The ARCC meets
with internal auditors and external auditors without the presence of Management at least once a year to review various
audit matters, including reviewing the audit plans, and evaluating the internal accounting controls, the audit reports and
the assistance given by Management to the internal and external auditors. In carrying out its function, the ARCC may
also obtain independent or external legal or other professional advice or appoint external consultants as it considers
necessary at the Manager’s cost.
CorporateGovernance Report Annual Report 2019 97
Regular updates on changes in accounting standards and treatment are prepared by external auditors and circulated
to members of the ARCC so that they are kept abreast of such changes and its corresponding impact on the financial
statements, if any.
Risk Management
The ARCC shall review the framework and processes established by Management to achieve compliance with applicable
laws, regulations, standards, best practice guidelines and the Manager’s policies and procedures. The ARCC shall assist
the Board in ensuring that Management maintains a sound system of risk management and internal controls to safeguard
the interests of the Manager or the interests of Unitholders (as the case may be) and the assets of the Manager and the
assets of FCT. The ARCC also assists the Board in its determination of the nature and extent of significant risks which the
Board is willing to take in achieving the Manager’s strategic objectives and the overall levels of risk tolerance and risk
policies. Further information on the key activities conducted by the ARCC can be found in the sections titled “Financial
Performance, Reporting and Audit” on page 111 and “Governance of Risk and Internal Controls” on pages 113 to 115.
Nominating And Remuneration Committee (1)
Membership
Key Objectives
Mr Ho Chai Seng, Chairman
Dr Cheong Choong Kong, Member
Mr Ho Chee Hwee Simon, Member
Mr Christopher Tang Kok Kai, Member
Ms Koh Choon Fah, Member (2)
•
•
•
•
•
Establish a formal and transparent process for
appointment and re-appointment of Directors
Develop a process for evaluation of the performance
and annual assessment of the effectiveness of the
Board as a whole and each of its board committees,
and individual Directors
Review succession plans
Assist the Board
in establishing a formal and
transparent process for developing policies on
Director and executive remuneration, and for fixing
the remuneration packages of individual Directors
and Key Management Personnel
Review and recommend to the Board, for endorsement
of the Board a general framework of remuneration
for the Board and Key Management Personnel and
specific remuneration packages for each Director and
Key Management Personnel
Notes:
(1) Unless otherwise stated, the information provided herein is as of 30 September 2019.
(2) Ms Koh Choon Fah was appointed as a non-executive and independent Director, a member of the ARCC and a member of the NRC
with effect from 1 October 2019.
CorporateGovernance Report 98 Frasers Centrepoint Trust
As at 30 September 2019, all the members of the NRC are non-executive and the majority of whom, including the
chairman of the NRC, are independent.
The NRC is guided by written Terms of Reference approved by the Board which set out the duties and responsibilities of the
NRC. The NRC’s responsibilities, in relation to its functions as a nominating committee, include reviewing the structure, size
and composition and independence of the Board and its Board Committees, reviewing and making recommendations to
the Board on the succession plans for Directors, the Chairman and Key Management Personnel, making recommendations
to the Board on all Board appointments and re-appointments, and determining the independence of Directors. The
NRC also proposes for the Board’s approval, the objective performance criteria and process for the evaluation of the
effectiveness of the Board, the Board Committees and individual Directors, and ensures that proper disclosures of such
process is made. The NRC is also responsible for making recommendations to the Board on training and professional
development programmes for the Board and the Directors.
Further information on the main activities of the NRC, in relation to its functions as a nominating committee, are outlined
in the following sections:
•
•
•
•
“Training and development of Directors” on page 101
“Board Composition” on pages 101 to 105
“Directors’ Independence” on pages 103 to 105
“Board Performance Evaluation” on page 105
The NRC’s responsibilities, in reviewing remuneration matters, include: (i) reviewing and recommending to the Board, a
framework of remuneration for the Board and Key Management Personnel, and (ii) ensuring that the remuneration of
executive Directors shall not be linked in any way to FCT’s gross revenue.
On an annual basis, the NRC also reviews and recommends, for the Board’s approval, the Manager’s remuneration and
benefits policies and practices (including long-term incentive schemes), and the performance and specific remuneration
packages for each Director and Key Management Personnel, in accordance with the approved remuneration policies
and processes.
The NRC also proposes, for the Board’s approval, criteria to assist in the evaluation of the performance of Key Management
Personnel, and (where applicable) reviews the obligations of the Manager arising in the event of the termination of the
service agreements of Key Management Personnel to ensure that such contracts of service contain fair and reasonable
termination clauses which are not overly generous. The NRC also administers and approves awards under the Restricted
Unit Plan (“RUP”) and/or other long-term incentive schemes to senior executives of the Manager.
In carrying out its review on remuneration matters, the Terms of Reference of the NRC provide that the NRC shall consider
all aspects of remuneration, including Directors’ fees, special remuneration to Directors who render special or extra
services to the Manager, salaries, allowances, bonuses, options, Unit-based incentives and awards, benefits-in-kind and
termination payments, and shall aim to be fair and to avoid rewarding poor performance.
If necessary, the NRC can seek expert advice on remuneration within the Manager’s Human Resources Department or
from external sources. Where such advice is obtained from external sources, the NRC ensures that existing relationships, if
any, between the Manager and the appointed remuneration consultants will not affect the independence and objectivity
of the remuneration consultants.
CorporateGovernance Report Annual Report 2019 99
Delegation of authority framework
As part of the Manager’s internal controls, the Board has adopted a framework of delegated authorisations in its Manual
of Authority (the “MOA”). The MOA sets out the levels of authorisation required for particular types of transactions to be
carried out, and specifies whether Board approval needs to be sought. It also sets out approval limits for operating and
capital expenditure as well as investments and asset enhancement initiatives.
While day-to-day operations of the business are delegated to Management, in the Board’s exercise of its leadership and
oversight of FCT, the MOA contains a schedule of matters specifically reserved for approval by the Board. These include
approval of annual budgets, financial plans, business strategies and material transactions, namely, major acquisitions,
divestments, funding and investment proposals, and appointment of key executives.
Meetings of the Board and Board Committees
The Board meets regularly, at least once every quarter, and also as required by business needs or if their members deem
it necessary or appropriate to do so.
The following table summarises the number of meetings of the Board and Board Committees and general meetings held
and attended by the Directors in the financial year ended 30 September 2019 (“FY19”):
Audit, Risk and
Compliance
Committee
Meetings
Nominating and
Remuneration
Committee
Meetings
Board
Meetings
Annual
General
Meeting
Extraordinary
General
Meeting (1)
Meetings held for FY19
Dr Cheong Choong Kong
Dr Chew Tuan Chiong (3)
Mr Philip Eng Heng Nee
Mr Ho Chee Hwee Simon (4)
Mr Ho Chai Seng
Mr Christopher Tang Kok Kai
5
5 (C) (2)
3
5
5
5
5
4
4
4
4 (C) (2)
4
1
1
1
1 (C) (2)
1
1
1 (C) (2)
1
1
1
1
1
1
1
1
–
1
1
1
Notes:
(1) Extraordinary General Meeting held on 28 June 2019.
(2) (C) refers to chairman
(3) Dr Chew Tuan Chiong retired as a Director and CEO on 1 July 2019.
(4) With effect from 1 November 2019, Mr Ho Chee Hwee Simon relinquished his role as the chairman of the ARCC and remains as a non-
executive and non-independent Director and a member of the ARCC and the NRC.
A calendar of activities is scheduled for the Board a year in advance.
The Manager’s Constitution provides for Board members who are unable to attend physical meetings to participate
through telephone conference, video conference or similar communications equipment.
Directors are provided with Board papers setting out relevant information on the agenda items to be discussed at Board
and Board Committee meetings around a week in advance of the meeting (save in cases of urgency), to give Directors
sufficient time to prepare for the meeting and review and consider the matters being tabled so that discussions can be
more meaningful and productive and Directors have the necessary information to make sound and informed decisions.
Senior members of the Management attend Board meetings, and where necessary, Board Committee meetings, to brief
and make presentations to the Directors, provide input and insight into matters being discussed, and respond to queries
and take any follow-up instructions from the Directors. At least once a year and if required, time is set aside after scheduled
Board meetings for discussions amongst the Board without the presence of Management.
CorporateGovernance Report 100 Frasers Centrepoint Trust
Where required by the Directors, external advisers may also be present or available whether at Board and Board
Committee meetings or otherwise, and (if necessary), at the Manager’s expense where applicable, to brief the Directors
and provide their advice.
Matters discussed by Board and Board Committees in FY19
Board
Strategy
Business and Operations Update
•
•
Financial Performance
Governance
•
•
Feedback from Board Committees
Networking
Audit, Risk and Compliance Committee
Nominating and Remuneration Committee
External and Internal Audit
Financial Reporting
Internal Controls and Risk Management
Related/Interested Person Transactions
Conflicts of Interests
•
•
•
•
•
Board Composition and Renewal
Board, Board Committees and Director Evaluations
Training and Development
Remuneration Policies and Framework
Succession Planning
•
•
•
•
•
•
•
Board Oversight
Outside of Board and Board Committee meetings, Management also provides Directors with reports on major operational
matters, business development activities, financial performance, potential investment opportunities and budgets
periodically, as well as such other relevant information on an on-going and timely basis to enable them to discharge their
duties and responsibilities properly. Where required or requested by Directors, site visits are also arranged for Directors to
have an intimate understanding of the key business operations of each division and to promote active engagement with
Management.
Directors are provided with sufficient information to enable them to ensure that they prepare adequately for Board and
Board Committee meetings, and devote sufficient time and attention to the affairs of FCT and the Manager. At Board
and Board Committee meetings, the Directors actively participate, discuss, deliberate and appraise matters requiring
their attention and decision. Where necessary for the proper discharge of their duties, the Directors may seek and obtain
independent professional advice at the Manager’s expense.
The Company Secretary
The Company Secretary of the Manager (“Company Secretary”), who is legally trained and familiar with company
secretarial practices, is responsible for overseeing compliance with Board and Board Committee procedures, and the
relevant guidelines, notices, rules and regulations, including disclosure requirements under the SFA, applicable MAS
guidelines and notices, the CIS Code, the SGX-ST Listing Manual and the Trust Deed, and provides advice and guidance on
corporate governance practices and processes.
The Company Secretary attends Board and Board Committee meetings and drafts and reviews the minutes of proceedings
thereof, and facilitates and acts as a channel of communication for the smooth flow of information to and within the
Board and its various Board Committees, as well as between and with senior Management.
The Company Secretary solicits and consolidates Directors’ feedback and evaluation, facilitates induction and orientation
programmes for new Directors, and assists with Directors’ professional development matters. The Company Secretary
also acts as the Manager’s primary channel of communication with the SGX-ST.
The appointment and removal of the Company Secretary is subject to the approval of the Board.
CorporateGovernance Report Annual Report 2019 101
Training and development of Directors
The NRC is tasked with identifying and developing training programmes for the Board and Board Committees for the
Board’s approval and ensuring that Directors have the opportunity to develop their skills and knowledge.
Upon appointment, each new Director is issued a formal letter of appointment setting out his or her duties and obligations,
including his or her responsibilities as fiduciaries and on the policies relating to conflicts of interest. An induction and
orientation programme is also conducted to provide new appointees with information on the business activities, strategic
direction, policies and corporate governance practices of the Manager, as well as their statutory and other duties and
responsibilities as Directors.
The Directors are kept continually and regularly updated on FCT’s business and the regulatory and industry specific
environments in which the entities of the Group operate. 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 and such updates may be in writing, by way of briefings held by the Manager’s
lawyers and external auditors or disseminated by way of presentations and/or handouts. During FY19, the Directors were
updated on (a) changes in Financial Reporting Standards and (b) recent changes to the CG Code and Listing Rules.
To ensure the Directors can fulfil their obligations and to continually improve the performance of the Board, all Directors
are encouraged to undergo continual professional development during the term of their appointment, and provided with
opportunities to develop and maintain their skills and knowledge at the Manager’s expense. The Manager maintains a
training record to track Directors’ attendance at training and professional development courses.
Directors are encouraged to be members of the Singapore Institute of Directors (“SID”) and for them to receive updates
and training from SID to stay abreast of relevant developments in financial, legal and regulatory requirements, and
business trends.
BOARD COMPOSITION
The following table shows the composition of the Board and the various Board Committees (1):
Dr Cheong Choong Kong
Mr Philip Eng Heng Nee
Mr Ho Chee Hwee Simon (2)
Mr Ho Chai Seng
Mr Christopher Tang Kok Kai
Ms Koh Choon Fah (3)
Chairman, Non-Executive
(Independent) Director
Non-Executive
(Non-Independent) Director
Non-Executive
(Independent) Director
Non-Executive
(Independent) Director
Non-Executive
(Non-Independent) Director
Non-Executive
(Independent) Director
Audit, Risk and
Compliance
Committee
Nominating and
Remuneration
Committee
•
•
•
(Chairman)
•
•
•
•
•
(Chairman)
•
•
Notes:
(1) Unless otherwise stated, the information provided herein is as of 30 September 2019.
(2) With effect from 1 November 2019, Mr Ho Chee Hwee Simon relinquished his role as the chairman of the ARCC and remains as a non-
executive and non-independent Director and a member of the ARCC and the NRC.
(3) Ms Koh Choon Fah was appointed as a non-executive and independent Director, a member of the ARCC and a member of the NRC with
effect from 1 October 2019. Ms Koh Choon Fah is appointed as the chairman of the ARCC with effect from 1 November 2019.
CorporateGovernance Report 102 Frasers Centrepoint Trust
Profiles of each of the Directors can be found at pages 16 to 19.
As can be seen from the table above, as at 30 September 2019, all of the Directors are non-executive and the majority of
the Board is independent.
The NRC has assessed that the current structure, size and composition of the Board are appropriate for the scope and
nature of FCT’s and the Manager’s operations. No individual or group dominates the Board’s decision-making process or
has unfettered powers of decision-making. The NRC is of the opinion that the Directors with their diverse backgrounds
and experience (including banking, finance, accounting and other relevant industry knowledge, entrepreneurial and
management experience, and familiarity with regulatory requirements and risk management) provide the appropriate
balance and mix of skills, knowledge, experience, competencies and other aspects of diversity that fosters constructive
debate and ensures the effectiveness of the Board and its Board Committees. The Board concurs with the views of the NRC.
Board Composition in terms of Age Group, Independence and Tenure
(as at 30 September 2019)
Age Group
Independence
51–65
66–80
60%
40%
Non-Independent and
Non-Executive
Directors
Independent and
Non-Executive
Directors
40%
60%
Tenure
Non-Executive and
Independent Directors
Non-Executive and
Non-Independent Directors
0
2
4
6
8
10
12
14
16
Number of Years as Director (as at 30 September 2019)
Directors are not subject to periodic retirement by rotation. Under its Terms of Reference, the NRC is tasked with reviewing
the succession plans for Directors, the Chairman and Key Management Personnel.
CorporateGovernance Report Annual Report 2019 103
Under the NRC Terms of Reference, the NRC is tasked with making recommendations to the Board on all Board appointments
and re-appointments, taking into account, among other things, the scope and nature of the operations of the Group, the
requirements of the business, whether Directors who have multiple board representations are able to carry out and have
been carrying out their duties as Directors and whether the Directors have given sufficient time and attention to the
affairs of FCT and the Manager. The process for the selection, appointment and re-appointment of Directors also takes
into account the composition and progressive renewal of the Board and Board Committees, each Director’s experience,
education, expertise, judgment, personal qualities and general and sector specific knowledge in relation to the needs of
the Board as well as whether the candidates will add diversity to the Board and whether they are likely to have adequate
time to discharge their duties. The NRC considers a range of different channels to source and screen candidates for Board
appointments, depending on the requirements, including tapping on existing networks and recommendations. Suitable
candidates are carefully evaluated by the NRC so that recommendations made on proposed candidates are objective and
well supported. Instead of prescribing a maximum number of directorships and/or other principal commitments that
each Director may have, the NRC adopts a holistic assessment of each Director’s individual capacity and circumstances to
carry out his or her duties, taking into consideration not only the number of other board and other principal commitments
held by each Director, but also the nature and complexity of such commitments. No new members were appointed to the
Board during FY19.
Board Diversity Policy
In FY19, the Board adopted, with the recommendation of the NRC, a board diversity policy. The NRC will monitor and
implement this policy, and will take the principles of the policy into consideration when determining the optimal
composition of the Board, the appointment and re-appointment of Directors and when recommending any proposed
changes to the Board. On the recommendation of the NRC, the Board may set certain measurable objectives/specific
diversity targets, with a view to achieving an optimal Board composition, and these objectives/specific diversity targets
may be reviewed by the NRC from time to time to ensure their appropriateness.
The Board views diversity at the Board level as an essential element for driving value in decision-making and proactively
seeks as part of its board diversity policy, to maintain an appropriate balance of expertise, skills and attributes among the
Directors. This is reflected in the diversity of backgrounds and competencies of the Directors, whose competencies range
from banking, finance and accounting, coupled with relevant industry knowledge, entrepreneurial and management
experience, and familiarity with regulatory requirements and risk management. This is beneficial to FCT, the Manager
and Management as decisions by, and discussions with, the Board would be enriched by the broad range of views and
perspectives and the breadth of experience of the Directors.
Directors’ Independence
The Directors exercise their judgment independently and objectively in the interests of FCT and the Manager. The
Directors complete a declaration of independence annually which is reviewed by the NRC. The NRC determines annually,
and as and when circumstances require, if a Director is independent. Based on the declarations of independence of the
Directors, and having regard to the circumstances set forth in Provision 2.1 of the CG Code, Rule 210(5)(d) of the SGX-ST
Listing Manual, the MAS Guidelines No. SFA04-G07 “Guidelines to all Holders of a Capital Markets Services Licence for
Real Estate Investment Trust Management” dated 1 January 2016 and Regulations 13D to 13H of the Securities and
Futures (Licensing and Conduct of Business) Regulations (“SFLCB Regulations”), the NRC and the Board have determined
that for FY19, there are three independent Directors on the Board, namely Dr Cheong Choong Kong, Mr Ho Chee Hwee
Simon, and Mr Ho Chai Seng.
During FY19, the NRC reviewed the appointments held by Mr Ho Chee Hwee Simon as the vice-chairman of the board of
directors of Frasers Hospitality International Pte Ltd (“FHI”), a subsidiary of FPL, and an advisor to FPL and was satisfied
that such appointments did not affect his continued ability to exercise strong objective judgment and be independent in
the expression of his views and in his participation in the deliberations and decision-making of the Board and the Board
Committees of which he is a member.
Based on each independent Director’s declaration of independence, which includes questions relating to his relationship
with FCT, the Manager, the Trustee and the Sponsor, all independent Directors have declared that there were no
relationships or instances that would otherwise deem them not to be independent.
CorporateGovernance Report 104 Frasers Centrepoint Trust
The Board has considered the relevant requirements under the SFLCB Regulations and its views in respect of the
independence of each Director for FY19 are as follows:
The Director:
Dr Cheong
Choong Kong
Mr Philip Eng
Heng Nee (1)
Mr Ho Chee
Hwee Simon (2)
Mr Ho Chai
Seng
Mr Christopher
Tang Kok Kai (3)
(i)
(ii)
(iii)
(iv)
(v)
had been independent
from the management
of the Manager and FCT
during FY19
had been independent
from any business
relationship with the
Manager and FCT
during FY19
had been independent
from every substantial
shareholder of the
Manager and every
substantial Unitholder
during FY19
had not been a
substantial shareholder
of the Manager or a
substantial Unitholder
during FY19
has not served as a
director of the Manager
for a continuous period
of 9 years or longer as at
the last day of FY19
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
P
Notes:
(1) Mr Philip Eng Heng Nee is a director of FPL, which wholly-owns the Manager and is a substantial Unitholder. As such, during FY19,
Mr Philip Eng Heng Nee is deemed (i) to have a business relationship with the Manager and FCT; and (ii) connected to a substantial
shareholder of the Manager and substantial Unitholder. The Board of the Manager is satisfied that, as at 30 September 2019, Mr Philip
Eng Heng Nee was able to act in the best interests of all Unitholders as a whole. As at 30 September 2019, Mr Philip Eng Heng Nee was
able to act in the best interests of all Unitholders as a whole.
(2) Mr Ho Chee Hwee Simon was appointed as (a) the vice-chairman of the board of FHI; and (b) an advisor to FPL (collectively referred to
as the “Appointments”) on 16 July 2018, and would receive director’s fees amounting to S$75,000 per year (“Director’s Fees”) and
advisor’s fees amounting to S$175,000 per year (“Advisor’s Fees”) respectively. FPL wholly-owns the Manager and is a substantial
Unitholder. Pursuant to the SFLCB Regulations, during FY19, Mr Ho Chee Hwee Simon is deemed to (i) have a business relationship
with the Manager and FCT; and (ii) be connected to a substantial shareholder of the Manager and a substantial Unitholder, by virtue
of the Appointments. Mr Ho Chee Hwee Simon is not involved in the day-to day management of the Manager and as far as the Board
of the Manager is aware, apart from the Appointments, Mr Ho does not have any other existing relationships whether in business or
otherwise with FCT, the Manager, related corporations of the Manager, officers of the Manager and the trustee of FCT.
Taking into account, inter alia, the declaration of independence by Mr Ho Chee Hwee Simon, the Board of the Manager is satisfied
that, as at 30 September 2019, the Appointments in relation to Mr Ho Chee Hwee Simon and the payment of the Director’s Fees and
Advisor’s Fees to him do not affect his continued ability to exercise strong objective judgment and be independent in the expression
of his views and in his participation in the deliberations and decision- making of the Board and the Board Committees of which he is a
member and that Mr Ho Chee Hwee Simon is able to act in the best interests of all Unitholders as a whole. As at 30 September 2019,
Mr Ho Chee Hwee Simon was able to act in the best interests of all Unitholders as a whole.
With effect from 1 November 2019, Mr Ho Chee Hwee Simon relinquished his role as the chairman of the ARCC and remains as a non-
executive and non-independent Director and a member of the ARCC and the NRC.
(3) Mr Christopher Tang Kok Kai is currently employed by a related corporation of the Manager and is a director of various
subsidiaries and/or associated companies of FPL, which wholly-owns the Manager and is a substantial Unitholder. As such,
during FY19, he is deemed (i) to have a management relationship with the Manager and FCT; and (ii) connected to a substantial
shareholder of the Manager and substantial Unitholder. The Board of the Manager is satisfied that, as at 30 September 2019,
Mr Christopher Tang Kok Kai was able to act in the best interests of all Unitholders as a whole. As at 30 September 2019,
Mr Christopher Tang Kok Kai was able to act in the best interests of all Unitholders as a whole.
CorporateGovernance Report Annual Report 2019 105
The independent Directors lead the way in upholding good corporate governance at the Board level and their presence
facilitates the exercise of objective independent judgment on corporate affairs. Their participation and input also ensure
that key issues and strategies are critically reviewed, constructively challenged, fully discussed and thoroughly examined,
taking into account the long-term interests of FCT and its Unitholders. As of 30 September 2019, none of the independent
Directors have been on the Board for more than nine years.
As at least half of the Board comprises independent Directors, the Manager will not be subjecting any appointment or
re-appointment of Directors to voting by Unitholders under Regulation 13D of the SFLCB Regulations. The Chairman is
presently an independent Director.
No alternate directors have been appointed on the Board for FY19.
Conflict Policy
To address and manage possible conflicts of interest (including in relation to Directors, officers and employees) that may
arise in managing FCT, the Manager has put in place procedures which, among other things, specify that: (a) the Manager
shall be dedicated to the management of FCT and will not directly or indirectly manage other REITs; (b) all executive
officers of the Manager will be employed by the Manager; (c) 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; (d)
at least one-third of the Board shall comprise independent Directors; (e) on matters where FPL and/or its subsidiaries have
an interest (directly or indirectly), Directors nominated by FPL and/or its subsidiaries shall abstain from voting. On such
matters, the quorum must comprise a majority of independent Directors and must exclude nominee Directors of FPL and/
or its subsidiaries; and (f) 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.
The Manager does not have a practice of extending loans to Directors, and as at 30 September 2019, there were no loans
granted by the Manager to Directors. If there are such loans, the Manager will comply with its obligations under the
Companies Act (Chapter 50 of Singapore) in relation to loans, quasi-loans, credit transactions and related arrangements
to Directors.
Board Performance Evaluation
The NRC is tasked with developing a process for evaluation of the performance and annual assessment of the Board as a
whole, each of the Board Committees and individual Directors.
For FY19, the NRC recommended and the Board approved the process of conducting a Board evaluation survey facilitated
by an independent external consultant, Ernst & Young LLP. The external consultant has no connection with FCT, the
Manager or any of the Directors, apart from being the consultant in previous financial year(s).
The survey was designed to provide an evaluation of current effectiveness of the Board and to support the Chairman and
the Board to proactively consider what can enhance the readiness of the Board to address emerging strategic priorities
for FCT as a whole. As part of the survey, questionnaires were sent by the external consultant to the Directors to obtain
feedback, and interviews would be conducted to clarify the responses where required. The objective performance criteria
covered in the Board evaluation exercise translated into the following key segments in the questionnaire: (a) the Board’s
contribution to the overall development of the Manager’s strategic and performance orientation; (b) Board composition
and skills; (c) Governance of the Board and organisation focus; (d) Board functioning and dynamics, including the Board’s
internal operations, as well as engagement with key investors, Unitholders and strategic stakeholders; (e) the Board’s
relations with Management; (f) Board’s role in respect of Director development and succession planning for the Board and
Management; (g) Director performance; (h) the Board’s governance in the management of a REIT; and (i) the effectiveness of
the Board Committees. The responses would be summarised by the external consultant and a report would be submitted
to the NRC. Findings and recommendations of the external consultant which include feedback from Directors would be
taken into consideration and any necessary follow-up actions would be undertaken with a view to improving the overall
effectiveness of the Board in fulfilling its role and meeting its responsibilities to Unitholders.
In addition to the survey, the contributions and performance of each Director would be assessed by the NRC as part of
its periodic reviews of the composition of the Board and the various Board Committees. Based on the NRC’s review, the
Board and the various Board Committees operate effectively and each Director is contributing to the overall effectiveness
of the Board.
CorporateGovernance Report 106 Frasers Centrepoint Trust
REMUNERATION MATTERS
The remuneration of the staff of the Manager and Directors’ fees are paid by the Manager from the management fees
it receives from FCT, and not by FCT. With the recommendations of the NRC, the Board has put in place a formal and
transparent process for developing policies on remuneration of Directors and Key Management Personnel and for fixing
the remuneration packages of individual Directors and Key Management Personnel.
Compensation Philosophy
The Manager seeks to incentivise and reward consistent and sustained performance through market competitive,
internally equitable, performance-orientated and Unitholder-aligned compensation programmes. This compensation
philosophy serves as the foundation for the Manager’s remuneration framework, and guides the Manager’s remuneration
framework and strategies. In addition, the Manager’s compensation philosophy seeks to align the aspirations and interests
of its employees with the interests of FCT and its Unitholders, resulting in the sharing of rewards for both employees
and Unitholders on a sustained basis. The Manager’s comprehensive human capital strategy serves to attract, retain and
motivate employees. The Manager aims to connect employees’ desire to develop and fulfil their aspirations with the
growth opportunities afforded by the Manager’s strategic vision and corporate initiatives.
Compensation Principles
All compensation programme design, determination and administration are guided by the following principles:
(a)
Pay-for-Performance
The Manager’s Pay-for-Performance principle encourages excellence, in a manner consistent with the Manager’s
core values. The Manager takes a total compensation approach, which recognises the value and responsibility of
each role, and differentiates and rewards performance through its incentive plans.
(b)
Unitholder Returns
Performance measures for incentives are established to drive initiatives and activities that are aligned with
both short-term value creation and long-term Unitholder wealth creation, thus ensuring a focus on delivering
Unitholder returns.
(c)
Sustainable Performance
The Manager believes sustained success depends on the balanced pursuit and consistent achievement of short-term
and long-term goals. Hence, variable incentives incorporate a significant pay-at-risk element to align employees
with sustainable performance for the Manager.
(d) Market Competitiveness
The Manager aims to be market competitive by benchmarking its compensation levels with relevant comparators
accordingly. However, the Manager embraces a holistic view of employee engagement that extends beyond
monetary rewards. Recognising each individual as unique, the Manager seeks to motivate and develop employees
through all the levers available to the Manager through its comprehensive human capital platform.
Engagement of External Consultants
The NRC may from time to time, and where necessary or required, engage external consultants in framing the remuneration
policy and determining the level and mix of remuneration for Directors and Management. Among other things, this helps
the Manager to stay competitive in its remuneration packages. During FY19, Korn Ferry was appointed as the Manager’s
remuneration consultant. The remuneration consultant does not have any relationship with FCT, the Manager, its
controlling shareholders, its related entities and/or its Directors which would affect its independence and objectivity.
CorporateGovernance Report Annual Report 2019 107
Remuneration Framework
The NRC reviews and makes recommendations to the Board on the remuneration framework for the independent
Directors and other non-executive Directors and the Key Management Personnel. The remuneration framework is
endorsed by the Board.
The remuneration framework covers all aspects of remuneration including salaries, allowances, performance bonuses,
grant of awards of units of FCT (“Units”) and incentives for the Key Management Personnel and fees for the independent
Directors and other non-executive Directors.
Remuneration Policy in respect of Management and other employees
The NRC reviews the level, structure and mix of remuneration and benefits policies and practices (where appropriate) of
the Manager, to ensure that they are appropriate and proportionate to the sustained performance and value creation of
FCT and the Manager, taking into account the strategic objectives of FCT and the Manager, and designed to attract, retain
and motivate the Key Management Personnel to successfully manage FCT and the Manager for the long-term. The NRC
takes into account all aspects of remuneration, including termination terms, to ensure that they are fair.
The remuneration framework comprises fixed and variable components, which include short-term and long-term
incentives. When conducting its review of the remuneration, the NRC takes into account the performance of FCT and
individual performance. The performance of FCT is measured based on pre-set financial and non-financial indicators.
Individual performance is measured via the employee’s annual appraisal based on indicators such as core values,
competencies and key performance indicators.
Fixed Component
The fixed component in the Manager’s remuneration framework is structured to remunerate employees for the roles they
perform, and is benchmarked against relevant industry market data. It comprises base salary, fixed allowances and any
statutory contribution. The base salary and fixed allowances for Key Management Personnel are reviewed annually by
the NRC and approved by the Board.
Variable Component
An appropriate proportion of the remuneration of key executives of the Manager comprises a variable component which
is structured so as to link rewards to corporate and individual performance and incentivise sustained performance in both
the short and long-term. The variable incentives are measured based on quantitative and qualitative targets, and overall
performance will be determined at the end of the year and approved by the NRC.
1.
Short-Term Incentive Plans
The short-term incentive plans (“STI Plans”) aim to incentivise excellence in performance in the short-term. All Key
Management Personnel’s performance are assessed through either a balanced scorecard or annual performance
review with pre-agreed financial and non-financial key performance indicators (“KPIs”). The financial KPIs are
based on the performance of FCT. Non-financial KPIs may include measures on People, Corporate Governance,
Sustainability or specified projects. These targets are established at the beginning of each financial year. At the end
of the financial year, the achievements are measured against the pre-agreed targets and the short-term incentives
of each Key Management Personnel are determined.
The NRC recommends the final short-term incentives that are awarded to Key Management Personnel for the
Board’s approval, taking into consideration any other relevant circumstances.
CorporateGovernance Report 108 Frasers Centrepoint Trust
2.
Long-Term Incentive Plans
The NRC administers the Manager's long-term incentive plan, namely, the RUP. The RUP was approved by the Board
and adopted on 8 December 2017. Through the RUP, the Manager seeks to foster a greater ownership culture within
the Manager by aligning more directly the interests of senior executives (including the CEO) with the interests of
Unitholders and other stakeholders, and for such employees to participate and share in FCT's growth and success,
thereby ensuring alignment with sustainable value creation for Unitholders over the long-term.
The RUP is available to selected senior executives of the Manager. Its objectives are to increase the Manager’s
flexibility and effectiveness in its continuing efforts to attract, retain and motivate talented senior executives
and to reward these executives for the future performance of FCT and the Manager. The RUP applies to senior
executives who shoulder the responsibility of FCT’s future performance and who are able to drive the growth of
FCT and the Manager through superior performance. It serves as further motivation to the participants in striving
for excellence, promoting FCT’s and the Manager’s long-term success and delivering long-term Unitholder value.
Under the RUP, the Manager grants Unit-based awards (“Initial Awards”) with pre-determined performance
targets being set at the beginning of the performance period. The NRC recommends the Initial Awards granted to
Key Management Personnel to the Board for approval, taking into consideration the Key Management Personnel’s
individual performance. The performance period for the RUP is two years. The pre-set targets are net property
income and distribution per Unit. Such performance conditions are generally performance indicators that are key
drivers of Unitholder value creation and aligned to FCT’s business objectives. The RUP awards represent the right
to receive fully paid Units, their equivalent cash value or a combination thereof, free of charge, provided certain
prescribed performance conditions are met. The final number of Units to be released (“Final Awards”) will depend on
the achievement of the pre-determined targets at the end of the performance period. If such targets are exceeded,
more Units than the Initial Awards can be delivered, subject to a maximum multiplier of the Initial Awards. The
Final Awards will vest to the participants in three tranches over two years after a two-year performance period.
The obligation to deliver the Units is expected to be satisfied out of the Units held by the Manager.
The NRC has absolute discretion to decide on the Final Awards, taking into consideration any other relevant
circumstances.
Approach to Remuneration of Key Management Personnel
The Manager advocates a performance-based remuneration system that is highly flexible and responsive to the market,
which also takes into account FCT’s performance and that of its employees.
In designing the compensation structure, the NRC seeks to ensure that the level and mix of remuneration is competitive,
relevant and appropriate in finding a balance between current versus long-term compensation and between cash versus
equity incentive compensation.
Executives who have a greater ability to influence outcomes within the Manager have a greater proportion of overall
reward at risk. The NRC exercises broad discretion and independent judgment in ensuring that the amount and mix of
compensation are aligned with interests of Unitholders and other stakeholders and promote the long-term success of FCT.
CorporateGovernance Report Annual Report 2019 109
Performance Indicators for Key Management Personnel
As set out above, the Manager's variable remuneration comprises short-term and long-term incentives, taking into
account both FCT’s and individual performance. This is to ensure employee remuneration is linked to performance. In
determining the short-term incentives, both FCT's financial and non-financial performance as per the balanced scorecard
are taken into consideration. The performance targets align the interests of the Key Management Personnel with the
long-term growth and performance of FCT and the Manager. The financial performance indicators on which the Key
Management Personnel are evaluated comprise (a) FCT's net property income, (b) distribution per Unit, and (c) FCT’s
Total Return (against a peer group). These performance indicators are quantitative and are objective measures of FCT's
performance. The non-financial performance indicators on which the Key Management Personnel are evaluated include
(i) people development, (ii) corporate governance and compliance, (iii) sustainability and (iv) branding. These qualitative
performance indicators will align the Key Management Personnel’s performance with FCT's strategic objectives.
In relation to long-term incentives, the Manager has implemented the RUP with effect from the financial year ended
30 September 2018 as set out above. The release of long-term incentive awards to Key Management Personnel are
conditional upon the performance targets being met. The performance targets of the KPIs align the interests of the
Key Management Personnel with the long-term growth and performance of FCT. In FY19, the pre-determined target
performance levels for the RUP grant were met.
Currently, the Manager does not have claw-back provisions which allow it to reclaim incentive components of
remuneration from its Key Management Personnel in exceptional circumstances of misstatement of financial results or
misconduct resulting in financial loss.
Remuneration Packages of Key Management Personnel
The NRC reviews and makes recommendations on the specific packages and service terms for the Key Management
Personnel for endorsement by the Board. The NRC will review 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.
No Director or Key Management Personnel is involved in deciding his or her remuneration.
The NRC aligns the CEO’s leadership, through appropriate remuneration and benefit policies, with FCT’s and the Manager’s
strategic objectives and key challenges. Performance targets are also set for the CEO and his performance is evaluated
yearly.
Remuneration Policy in respect of Non-Executive Directors
The remuneration of non-executive Directors has been designed to be appropriate to the level of contribution, taking into
account factors such as effort, time spent, and responsibilities, on the Board and Board Committees, and to attract, retain
and motivate the Directors to provide good stewardship of FCT.
Non-executive Directors do not receive bonuses, options or Unit-based incentives and awards.
The Manager engages consultants to review Directors’ fees by benchmarking such fees against the amounts paid
by listed industry peers. Each non-executive Director’s remuneration comprises a basic fee and attendance fees for
attending Board and Board Committee meetings. In addition, non-executive Directors who perform additional services
in Board Committees are paid an additional fee for such services. The chairman of each Board Committee is also paid a
higher fee compared with the members of the respective Board Committees in view of the greater responsibility carried
by that office.
CorporateGovernance Report 110 Frasers Centrepoint Trust
Disclosure of Remuneration of Directors and Key Executives of the Manager
Information on the remuneration of Directors and key executives of the Manager for FY19 is set out below.
Directors of the Manager
Dr Cheong Choong Kong
Dr Chew Tuan Chiong
Mr Philip Eng Heng Nee
Mr Ho Chee Hwee Simon
Mr Ho Chai Seng
Mr Christopher Tang Kok Kai
Remuneration
S$
138,500
– (1)
78,500
112,000 (2)
93,500
60,000 (3)
Notes:
(1) Dr Chew Tuan Chiong retired as a Director and CEO on 1 July 2019. In his capacity as an executive Director, he does not receive
Director’s fees.
(2) Excludes S$75,000 and S$175,000 being payment of Director’s Fees and Advisor’s Fees for the Appointments from FPL Group (excluding
the Manager).
(3) Director’s fees are paid to Frasers Property Corporate Services Pte. Ltd.
Remuneration of CEO for FY19
Between S$500,000 to S$750,000
Dr Chew Tuan Chiong (1)
Between S$250,000 to S$500,000
Mr Richard Ng (2)
Remuneration of key
executives of the Manager (3)
(excluding CEO) for FY19
Ms Tay Hwee Pio
Mr Alex Chia
Mr Rene Lee
Mr Chen Fung Leng
Aggregate Total Remuneration
Salary
%
Bonus
%
Allowances
and
Benefits
%
Long-Term
Incentives
%
43
66
16
27
6
7
35
–
Salary
%
Bonus
%
Allowances
and
Benefits
%
Long-Term
Incentives
%
Total
%
100
100
Total
%
58 (4)
16 (4)
2 (4)
24 (4)
100
(including CEO)
S$1,219,252
S$393,239
S$78,467
S$525,816 S$2,216,774
Notes:
(1) Calculated from 1 October 2018 to 30 June 2019. Dr Chew Tuan Chiong retired as a Director and CEO on 1 July 2019.
(2) Calculated from 15 April 2019 (being first day of appointment as CEO-Designate) to 30 September 2019. Mr Richard Ng was
subsequently appointed as CEO on 1 July 2019. The amount excludes a one-off payment contractually agreed in connection with his
appointment within FPL Group which will become payable upon satisfaction of a stipulated period of his appointment.
(3) The key executives of the Manager (excluding the CEO) listed in this table are the CFO and the division heads of the Manager.
(4) Derived based on the aggregation of the respective remuneration components of each of the key executives of the Manager (excluding
the CEO) and represented as percentages against the total remuneration for these key executives.
CorporateGovernance Report Annual Report 2019 111
There are no existing or proposed service agreements entered into or to be entered into by the Manager or any of its
subsidiaries with Directors or Key Management Personnel which provide for compensation in the form of stock options,
or pension, retirement or other similar benefits, or other benefits, upon termination of employment.
Pursuant to the MAS Notice to All Holders of a Capital Markets Services Licence for Real Estate Investment Trust
Management (Notice No: SFA4-N14), REIT managers are required to disclose the remuneration of the CEO and each
individual Director on a named basis, and 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 REIT manager
may provide an explanation if it does not wish to or is unable to comply with such requirement. The Manager has decided
(a) to disclose the CEO’s remuneration in bands of S$250,000 (instead of on a quantum basis), (b) not to disclose the
remuneration of the other key executives of the Manager in bands of S$250,000 and (c) to disclose the aggregate
remuneration of all key executives of the Manager (including the CEO), for the following reasons:
(i)
(ii)
(iii)
(iv)
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 exact remuneration of its CEO and the other key executives of the
Manager as this may give rise to recruitment and talent retention issues as well as the risk of unnecessary key
management turnover;
the composition of the current management team has been 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;
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
the remuneration of the CEO and the other key executives of the Manager are paid by the Manager and there is full
disclosure of the total amount of fees paid to the Manager set out at page 110 of this Annual Report.
As at 30 September 2019, there are no employees within the Manager who is a substantial Unitholder or who is an
immediate family member of a Director, the CEO or a substantial Unitholder.
FINANCIAL PERFORMANCE, REPORTING AND AUDIT
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.
The Manager prepares the financial statements of FCT 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, the applicable requirements of the CIS Code issued by the Monetary Authority of Singapore and
the provisions of the Trust Deed.
The Board releases FCT’s quarterly and full year financial results, other price sensitive information and material corporate
developments through announcements to the SGX-ST and, where appropriate, press releases, FCT’s website, and/or
media and analysts’ briefings.
External Audit
The ARCC conducts an assessment of the external auditors, and recommends its appointment, re-appointment and
removal to the Board. The assessment is based on factors such as the performance and quality of its audit, the cost
effectiveness and the independence and objectivity of the external auditors.
At the annual general meeting (“AGM”) held on 21 January 2019, KPMG LLP was re-appointed by Unitholders as the
external auditors of FCT for FY19. Pursuant to the requirements of the SGX-ST, an audit partner may only be in charge of a
maximum of five consecutive annual audits and may then return after two years. The current KPMG LLP audit partner for
the Group was appointed at the AGM held on 21 January 2016 and has held this appointment for less than five consecutive
audits, thereby meeting the requirement.
CorporateGovernance Report 112 Frasers Centrepoint Trust
During FY19, the ARCC conducted a review of the scope, quality, results and performance of audit by the external
auditors and its cost effectiveness, as well as the independence and objectivity of the external auditors. It also reviewed
all non-audit services provided by the external auditors during the financial period, and the aggregate amount of fees
paid to them for such services. Details of fees payable to the external auditors in respect of audit and non-audit services
for FY19 are set out in the table below:
Fees relating to external auditors for FY19
For audit and audit-related services
For non-audit services
Total
S$ '000
178.5
60.9
239.4
The ARCC has conducted a review of all non-audit services provided by KPMG LLP during the financial period. The ARCC
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 LLP is put at risk. KPMG LLP attended the ARCC meetings held every quarter
for FY19, and where appropriate, has met with the ARCC without the presence of Management to discuss their findings,
if any.
The Manager, on behalf of FCT, confirms that FCT has complied with Rule 712 of the SGX-ST Listing Manual which requires,
amongst others, that a suitable auditing firm should be appointed by FCT having regard to certain factors. FCT has also
complied with Rule 715 of the SGX-ST Listing Manual which requires that the same auditing firm of FCT based in Singapore
audits its Singapore-incorporated subsidiaries and significant associated companies, and that a suitable auditing firm be
engaged for its significant foreign-incorporated subsidiaries and associated companies.
In the review of the financial statements for FY19, the ARCC discussed the following key audit matters identified by the
external auditors with Management:
Key Audit Matter
How this issue was addressed by the ARCC
Valuation of investment properties
The ARCC considered the methodologies and key assumptions
applied by the valuers in arriving at the valuation of the properties.
The ARCC 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 ARCC 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 ARCC was satisfied with the valuation process, the
methodologies used and the valuation for investment properties
as adopted as at 30 September 2019.
CorporateGovernance Report Annual Report 2019 113
GOVERNANCE OF RISK AND INTERNAL CONTROLS
The Board is responsible for the governance of risk and ensures that Management maintains a sound system of risk
management and internal controls.
Enterprise Risk Management and Risk Tolerance
The Manager has established a sound system of risk management and internal controls comprising procedures and
processes to safeguard FCT’s assets and FCT’s and its Unitholders’ interests. The ARCC 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 ARCC, 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 ARCC ensures primarily that key objectives
are met, material assets are properly safeguarded, fraud or errors (if any) 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 ARCC, reviews the adequacy and effectiveness of the Manager’s risk management framework
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 70 to 71.
Periodic updates are provided to the ARCC on FCT’s and the Manager’s risk profiles. These updates would involve an
assessment of FCT’s and the Manager’s key risks by risk categories, current status, the effectiveness of any mitigating
measures taken, and the action plans undertaken by Management to manage such risks.
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 ARCC. 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 CFO that as at 30 September 2019:
(a)
(b)
(c)
the financial records of FCT have been properly maintained and the financial statements for FY19 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 to address financial, operational, compliance
and information technology risks which the Manager considers relevant and material to FCT’s operations; and
the risk management system in place for FCT is adequate and effective to address risks which the Manager considers
relevant and material to FCT’s operations.
CorporateGovernance Report 114 Frasers Centrepoint Trust
Board’s Comment 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 ARCC and assurance from the CEO and the CFO, the Board is of
the view that the internal controls in place for FCT were adequate and effective as at 30 September 2019 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 adopted by the Manager, review performed by Management
and assurance from the CEO and the CFO, the Board is of the view that the risk management system in place for FCT was
adequate and effective as at 30 September 2019 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.
The ARCC concurs with the Board’s view that as at 30 September 2019, the internal controls of FCT (including financial,
operational, compliance and information technology controls) and risk management systems were adequate and effective
to address risks which the Manager considers relevant and material to FCT’s operations.
Internal Audit
The internal audit function of the Manager is performed by FPL Group’s internal audit department (“FPL Group IA”). FPL
Group IA is responsible for conducting objective and independent assessments on the adequacy and effectiveness of the
Manager’s system of internal controls, risk management and governance practices. The Head of the FPL Group IA, who
is a Certified Fraud Examiner and a Fellow of the Institute of Singapore Certified Accountants, CPA Australia and ACCA,
reports directly to the chairman of the ARCC, and administratively to the Group Chief Executive Officer of the Sponsor or
such other officer as may be charged with this responsibility from time to time. The appointment and removal of the FPL
Group’s internal audit department as the service provider of the Manager’s internal audit function requires the approval
of the ARCC. In performing internal audit services, FPL Group IA has adopted and complies with the Standards for the
Professional Practice of Internal Auditing set by The Institute of Internal Auditors.
As at 30 September 2019, FPL Group IA comprises 23 professional staff. The Head of the FPL Group IA and the Singapore-
based FPL Group IA staff are members of The Institute of Internal Auditors, Singapore. To ensure that the internal audit
activities are effectively performed, FPL Group IA recruits and employs suitably qualified staff with the requisite skills and
experience. Such staff are given relevant training and development opportunities to update their technical knowledge and
auditing skills. All staff members of FPL Group IA also receive relevant technical training and attend seminars organised by
The Institute of Internal Auditors, Singapore and other professional bodies. FPL Group IA operates within the framework
of a set of terms of reference as contained in the Internal Audit Charter approved by the ARCC. It adopts a risk-based audit
methodology to develop its audit plans, and its activities are aligned to key risks of FCT. The results of the risk assessments
determine the level of focus and the review intervals for the various activities audited (i.e. greater focus and appropriate
review intervals are set for higher risk activities and material internal controls). FPL Group IA conducts its audit reviews
based on internal audit plans approved by the ARCC. FPL Group IA has unfettered access to all of FCT’s and the Manager’s
documents, records, properties and personnel, including access to the ARCC members. All audit reports detailing audit
findings and recommendations are provided to Management who would respond with the actions to be taken.
CorporateGovernance Report Annual Report 2019 115
Each quarter, FPL Group IA will submit reports to the ARCC on the status of the audit plans and on audit findings and
actions taken by Management on such findings. Key findings are highlighted at ARCC meetings for discussion. The ARCC
monitors the timely and proper implementation of the required follow-up measures undertaken by Management. The
ARCC is satisfied that for FY19, the internal audit function is independent, effective and adequately resourced and has
appropriate standing within FCT and the Manager to perform its functions effectively. Quality assurance reviews on FPL
Group’s internal audit function are periodically carried out by qualified professionals from an external organisation. The
last review was performed in the financial year ended 30 September 2018.
Related/Interested Person Transactions
The Manager has established internal processes such that the Board, with the assistance of the ARCC, is required to
be satisfied that all Related/Interested Person Transactions are undertaken on normal commercial terms, and are
not 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). Directors who are interested in any proposed Related/Interested Person
Transaction to be entered into by FCT are required to abstain from any deliberations or decisions in relation to that
Related/Interested Person Transaction.
All Related/Interested Person Transactions are entered in a register maintained by the Manager. The Manager incorporates
into its internal audit plan a review of the Related/Interested Person Transactions recorded in the register to ascertain
that internal procedures and requirements of the SGX-ST Listing Manual and Property Funds Appendix have been
complied with. The ARCC reviews the internal audit reports at least twice a year to ascertain that the guidelines and
procedures established to monitor Related/Interested Person Transactions have been complied with. The review includes
the examination of the nature of the Related/Interested Person Transactions and its supporting documents or such other
data deemed necessary by the ARCC. In addition, the Trustee also has the right to review any such relevant internal audit
reports to ascertain that the Property Funds Appendix has been complied with.
Any Related/Interested Person Transaction proposed to be entered into between FCT and an interested person, would
require the Trustee to satisfy itself that such Related/Interested Person Transaction is conducted on normal commercial
terms, is not prejudicial to the interests of FCT and its Unitholders, and is in accordance with all applicable requirements
of the CIS Code and the SGX-ST Listing Manual.
Whistle-Blowing Policy
The Manager has put in place a whistle-blowing policy (the “Whistle-Blowing Policy”). The Whistle-Blowing Policy
provides an independent feedback channel through which matters of concern about possible improprieties in matters of
financial reporting, suspected fraud and corruption or other matters may be raised by employees and any other persons
in confidence and in good faith, without fear of reprisal. Whistle-Blowers may report any matters of concern by mail,
email or calling a hotline, details of which are provided in the Whistle-Blowing Policy, which is available on FCT’s website.
Any report submitted through this channel would be received by the Head of the internal audit function. For employees,
the Whistle-Blowing Policy provides assurance that employees will be treated fairly, and protected from reprisals or
victimisation for whistle-blowing in good faith.
The improprieties that are reportable under the Whistle-Blowing Policy include: (a) financial or professional misconduct;
(b) improper conduct, dishonest, fraudulent or unethical behaviour; (c) any irregularity or non-compliance with laws/
regulations or the Manager’s policies and procedures, and/or internal controls; (d) violence at the workplace, or any conduct
that may threaten health and safety; (e) corruption or bribery; (f) conflicts of interest; and (g) any other improprieties or
matters that may adversely affect Unitholders’/shareholders’ interests in, and assets of, FCT/the Manager as well as FCT’s/
the Manager’s reputation. The Whistle-Blowing Policy is covered during staff training. All whistle-blowing complaints
raised are independently investigated and if appropriate, an investigation committee will be constituted. The outcome
of each investigation and any action taken is reported to the ARCC. The ARCC reviews and ensures that independent
investigations and any appropriate follow-up actions are carried out.
CorporateGovernance Report 116 Frasers Centrepoint Trust
UNITHOLDER MATTERS
The Manager treats all Unitholders fairly and equitably in order to enable them to exercise their Unitholders’ rights and
have the opportunity to communicate their views on matters affecting FCT.
Investor Relations
The Manager prides itself on its high standards of disclosure and corporate transparency. The Manager aims to provide
accurate, objective and timely information regarding FCT’s performance and progress and matters concerning FCT and its
business which are likely to materially affect the price or value of the Units, to Unitholders and the investment community,
to enable them to make informed investment decisions.
The Manager’s dedicated Investor Relations (“IR”) manager is tasked with, and focuses on, facilitating communications
between FCT and its Unitholders, as well as with the investment community, analysts and media. Contact details of the
IR manager (“IR Contact”) are available on FCT’s website at https://www.frasersproperty.com/reits/fct for Unitholders,
investors and other stakeholders to channel their comments and queries.
Continuous and informed dialogue between the Manager and Unitholders is a central tenet of good corporate
governance. Regular engagement between these parties will promote greater transparency. Material and other pertinent
information such as press releases and presentation slides are released to the SGX-ST via SGXNET and FCT’s website.
Announcements through SGXNET and FCT’s website are the principal media of communication with Unitholders. The
Management (including the IR manager), participates in investor conferences, roadshows, and one-on-one meetings to
keep the investment community informed of FCT’s corporate developments, financial and operational performance and
strategies. Analysts’ briefings or conference calls, and investors’ luncheons were conducted after the announcements of
FY19 financial results for each quarter. Webcasts of the Manager’s presentations of FCT’s half year and full year results are
available on FCT’s website on the day of release of the respective results.
Details of the IR activities during the year can be found in the Investor Relations section of this Annual Report on
pages 22 to 25.
An electronic copy of this Annual Report is available on FCT’s website at https://fct.frasersproperty.com/publications.
html. Unitholders can also request for printed copies of this Annual Report via IR Contact.
The Trust Deed is also available for inspection upon request at the Manager’s office1.
Conduct of general meetings
The Board supports and encourages active Unitholder participation at AGMs as it believes that general meetings serve as
an opportune forum for Unitholders to meet the Board and senior Management, and to interact with them. To encourage
participation, FCT’s general meetings are held at convenient locations. Unitholders are given the opportunity to
participate effectively and vote at FCT’s general meetings, where relevant rules and procedures governing such meetings
(for instance, how to vote) are clearly communicated prior to the start of the meeting.
At general meetings, the Manager sets out separate resolutions on each substantially separate issue. Unitholders are
given the opportunity to raise questions and clarify any issues that they may have relating to the resolutions sought to
be passed.
1 Prior appointment with the Manager is appreciated.
CorporateGovernance Report Annual Report 2019 117
For greater transparency, the Manager has implemented electronic poll voting at general meetings. This entails
Unitholders being invited to vote on each of the resolutions by poll, using an electronic voting system (instead of voting
by hands), thereby allowing all Unitholders present or represented at the meeting to vote on a one Unit, one vote basis.
The voting results of all votes cast for, against, or abstaining from each resolution is then screened at the meeting and
announced to the SGX-ST after the meeting. An independent external party is appointed as scrutineer for the electronic
voting process to count and validate the votes at general meetings. The Manager will continue to use the electronic
poll voting system at the forthcoming AGM. As the authentication of Unitholder identity and other related security and
integrity issues still remain a concern, the Manager has decided for the time being, not to implement absentia voting
methods such as voting via mail, e-mail or fax.
At the AGM, the Manager will make a presentation to update Unitholders on FCT’s financial and operational performance
for the financial year. The presentation materials are made available on SGXNET and FCT’s website before the
commencement of the AGM for the benefit of Unitholders.
Board members and senior Management are present at each Unitholders’ meeting to respond to any questions from
Unitholders, unless they are unable to attend due to exigencies. Certain external consultants including FCT’s external
auditors are also present to address queries about the conduct of audit and the preparation and content of the
auditors’ report.
The minutes of Unitholders’ meetings which include the attendance of Board members at the meetings, matters approved
by Unitholders, voting results and substantial and relevant comments or queries from Unitholders relating to the agenda
of the general meeting together with responses from the Board and Management, are prepared by the Manager. The
minutes will be available on FCT’s website after the Board’s approval.
Distributions
FCT’s distribution policy is to distribute at least 90.0% of its taxable income, comprising substantially its income from the
letting of its properties and related property maintenance services income after deduction of allowable expenses and
such distributions are typically paid on a quarterly basis. For FY19, FCT made four distributions to Unitholders.
STAKEHOLDER ENGAGEMENT
The Board adopts an inclusive approach by considering and balancing the needs and interests of material stakeholders, as
part of its overall responsibility to ensure that the best interests of FCT are served.
The conduct of employees of the Manager is governed by the FPL Code of Business Conduct. Its key objectives are to
provide clear guidelines on ethics and relationships, in order to safeguard the reputation and interests of FPL Group. The
Code of Business Conduct sets out the policies and procedures dealing with various issues such as conflicts of interests,
the maintenance of records and reports, equal employment opportunities and sexual harassment. Where applicable/
appropriate, the Code of Business Conduct is also made available to other stakeholders such as the Manager’s agents,
suppliers, business associates and customers.
In order to review and assess the material factors relevant to FCT’s business activities, the Manager from time to time
proactively engages with various stakeholders, including employees, vendors and tenants, and the investment community,
to gather feedback on the sustainability matters which have significant impact to the business and operations of FCT
and its stakeholders. Please refer to the Sustainability Report on pages 72 to 92 of this Annual Report, which sets out
information on the Manager’s arrangements to identify and engage with its material stakeholder groups and to manage
its relationships with such groups, and the Manager’s strategy and key areas of focus in relation to the management of
stakeholder relationships during FY19.
CorporateGovernance Report 118 Frasers Centrepoint Trust
POLICY ON DEALINGS IN SECURITIES
The Manager has adopted a dealing policy regarding securities trading (“Dealing Policy”) setting out the procedure for
dealings in FCT’s securities by its Directors, officers and employees. In compliance with Rule 1207(19) of the SGX-ST
Listing Manual on best practices on dealing in securities, the Group issues quarterly reminders to its Directors, officers and
employees on the restrictions in dealings in listed securities of the Group during the period commencing (a) two weeks
prior to the announcement of financial results of each of the first three quarters of the financial year, and (b) one month
before the announcement of full year results, and ending on the date of such announcements (“Prohibition Period”).
Directors, officers and employees are also reminded not to trade in listed securities of FCT at any time while in possession
of unpublished price sensitive information and to refrain from dealing in FCT’s securities on short-term considerations.
Outside of the Prohibition Period, Directors and the CEO are also required to report their dealings in FCT’s securities within
two business days.
Every quarter, each Director, officer and employee is required to complete and submit a declaration form to the designated
compliance officer to report any trades he/she made in Units in the previous quarter and confirm that no trades were
made during the Prohibition Period. A quarterly report will be provided to the ARCC. Any non-compliance with the Dealing
Policy will be reported to the ARCC 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 Units. The Manager has undertaken that it will not deal in Units:
(i)
during the period commencing (A) two weeks prior to the announcement of financial results of each of the first
three quarters of the financial year, and (B) one month before the announcement of full year results and (where
applicable) property valuations, and ending on the date of such announcements; or
(ii)
whenever it is in possession of unpublished material price sensitive information.
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
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.
for
The Base Fee compensates
the
Manager
the costs
incurred
includes
in managing FCT, which
overheads, day-to-day operational
costs,
monitoring
and
reporting costs as well as
administrative expenses.
compliance,
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.
CorporateGovernance Report
Annual Report 2019 119
ADDITIONAL DISCLOSURE ON FEES PAYABLE TO THE MANAGER (CONT’D)
Type of Fee
Computation and Form of Payment
Rationale and Purpose
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 of FCT (calculated before
accounting for the Performance Fee in that
financial year) 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.
is
The Performance Fee, which
based on Net Property
Income,
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 the Manager to ensure
the long-term sustainability of the
assets instead of taking on excessive
short-term risks to the detriment of
Unitholders.
The Acquisition Fee and Divestment
Fee seek to motivate and compensate
for the 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.
The Manager provides these services
over and above the provision of
ongoing management services with
the aim of enhancing
long-term
income sustainability and
returns,
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
evaluating
conducting due
and
for an acquisition, as
diligence
compared to a divestment.
CorporateGovernance Report
120 Frasers Centrepoint Trust
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.
Note:
Capitalised terms used in this section shall have the same meanings ascribed to them in the Trust Deed.
SUMMARY OF COMPLIANCE WITH EXPRESS DISCLOSURE REQUIREMENTS IN PRINCIPLES AND PROVISIONS OF CG CODE
Principles and Provisions of the 2018 Code of Corporate Governance
BOARD’S CONDUCT OF AFFAIRS
Page
Reference
Of Annual
Report
2019
Provision 1.2
Induction,
existing Directors
training and development provided
to new and
101
Provision 1.3
Matters requiring Board approval
Provision 1.4
Names of Board Committee members, terms of reference of Board
Committees, any delegation of Board’s authority to make decisions and
a summary of each Board Committee’s activities
99 to 100
95 to 100
Provision 1.5
Number of Board and Board Committee meetings and each individual
Directors’ attendances at such meeting
99
CorporateGovernance Report Annual Report 2019 121
SUMMARY OF COMPLIANCE WITH EXPRESS DISCLOSURE REQUIREMENTS IN PRINCIPLES AND PROVISIONS OF CG CODE
(CONT’D)
Principles and Provisions of the 2018 Code of Corporate Governance
BOARD COMPOSITION AND GUIDANCE
Page
Reference
Of Annual
Report
2019
Provision 2.2
The Board diversity policy and progress made towards implementation
of the policy, including objectives
103
BOARD MEMBERSHIP
Provision 4.3
Provision 4.4
Provision 4.5
BOARD PERFORMANCE
Provision 5.2
Process for the selection, appointment and re-appointment of
Directors to the Board, including the criteria used to identify and
evaluate potential new Directors and channels used in searching for
appropriate candidates
Relationships that independent Directors have with FCT, its related
corporations, its substantial Unitholders or its officers, if any, which
may affect their independence, and the reasons why the Board, having
taken into account the views of the NRC, has determined that such
Directors are still independent
Listed company directorships and principal commitments of each
Director, and where a Director holds a significant number of such
directorships and commitments, the NRC’s and Board’s reasoned
assessment of the ability of the Director to diligently discharge his or
her duties
How the assessments of the Board, its Board Committees and each
Director have been conducted, including the identity of any external
facilitator and its connection, if any, with the Manager or any of
its Directors
98, 102
to 103
103 to 105
16 to 19,
103
98, 105
PROCEDURES FOR DEVELOPING REMUNERATION POLICIES
Provision 6.4
Engagement of any remuneration consultants and their independence
106, 109
CorporateGovernance Report 122 Frasers Centrepoint Trust
SUMMARY OF COMPLIANCE WITH EXPRESS DISCLOSURE REQUIREMENTS IN PRINCIPLES AND PROVISIONS OF CG CODE
(CONT’D)
Principles and Provisions of the 2018 Code of Corporate Governance
DISCLOSURE ON REMUNERATION
Page
Reference
Of Annual
Report
2019
Provision 8.1
Policy and criteria for setting remuneration, as well as names, amounts
and breakdown of remuneration of:
106 to 111
Provision 8.2
(a)
each individual Director and the CEO; and
(b)
at least the top five key management personnel (who are
not Directors or the CEO) in bands no wider than S$250,000
and in aggregate the total remuneration paid to these key
management personnel
Names and remuneration of employees who are substantial
shareholders of the Manager or substantial Unitholders, or are
immediate family members of a Director, the CEO or such a substantial
shareholder or substantial Unitholder, and whose remuneration
exceeds S$100,000 during the year, in bands no wider than S$100,000.
The employee’s relationship with the relevant Director or the CEO or
substantial shareholder or substantial Unitholder should also be stated.
111
Provision 8.3
All forms of remuneration and other payments and benefits, paid by
the Manager and its subsidiaries to Directors and Key Management
Personnel
106 to 111
RISK MANAGEMENT AND INTERNAL CONTROLS
Provision 9.2
Board’s assurance from:
113
(a)
(b)
the CEO and the CFO that the financial records have been
properly maintained and the financial statements give a true
and fair view of the REIT’s operations and finances; and
the CEO and other key management personnel who are
responsible, regarding the adequacy and effectiveness of the
REIT’s risk management and internal control systems.
CorporateGovernance Report Annual Report 2019 123
SUMMARY OF COMPLIANCE WITH EXPRESS DISCLOSURE REQUIREMENTS IN PRINCIPLES AND PROVISIONS OF CG CODE
(CONT’D)
Principles and Provisions of the 2018 Code of Corporate Governance
UNITHOLDER RIGHTS AND ENGAGEMENT
UNITHOLDER RIGHTS AND CONDUCT OF GENERAL MEETINGS
Page
Reference
Of Annual
Report
2019
Provision 11.3
Directors’ attendance at general meetings of Unitholders held during
the financial year
99, 117
ENGAGEMENT WITH UNITHOLDERS
Provision 12.1
Steps taken by the Manager to solicit and understand the views of
Unitholders
116 to 117
ENGAGEMENT WITH STAKEHOLDERS
Provision 13.2
The Manager’s strategy and key areas of focus in relation to the
management of stakeholder relationships during the reporting period
117
CorporateGovernance Report 124 Frasers Centrepoint Trust
Financial Statements
Contents
Report of the Trustee
Statement by the Manager
Independent Auditors’ Report
Balance Sheets
Statements of Total Return
Distribution Statements
Statements of Movements in Unitholders’
Funds and Reserve
Portfolio Statements
Consolidated Cash Flow Statements
Notes to the Financial Statements
125
126
127
131
132
133
134
135
138
139
Report of
the Trustee
Annual Report 2019 125
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 subsidiaries (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, a fourth supplemental deed dated 19 January 2017
and a fifth supplemental deed dated 24 January 2018) (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 131 to 195, 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
Authorised Signatory
Singapore
15 November 2019
126 Frasers Centrepoint Trust
Statement by
the Manager
In the opinion of the directors of Frasers Centrepoint Asset Management Ltd., the accompanying financial statements set
out on pages 131 to 195, 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 2019, and the consolidated statement
of total return, consolidated distribution statement, consolidated statement of movement in unitholders’ funds and
reserves and consolidated cash flow statement of the Group and the statement of total return, distribution statement,
statement of movements in unitholders’ funds and reserves 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 consolidated financial position of the Group and the financial position of the Trust as at 30 September 2019,
the consolidated total return, consolidated distributable income, consolidated movements in unitholders’ funds and
reserves and consolidated cash flows of the Group and the total return, distributable income, movements in unitholders’
funds and reserves of the Trust 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.
Dr Cheong Choong Kong
Director
Christopher Tang Kok Kai
Director
Singapore
15 November 2019
Annual Report 2019 127
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 subsidiaries (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 2019, the consolidated statement of total return, consolidated
distribution statement, consolidated statement of movements in unitholders’ funds and reserves 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 131 to 195.
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 and the consolidated portfolio statement of the Group and the financial
position and the portfolio statement of the Trust as at 30 September 2019 and the consolidated total return, consolidated
distributable income, consolidated movements in unitholders’ funds and reserves and consolidated cash flows of the
Group and the total return, distributable income and movements in unitholders’ funds and reserves 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 4 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 2019, the investment properties, with carrying amount of $2.85 billion (2018: $2.75 billion),
represent the single largest asset category on the balance sheets of the Group and 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.
128 Frasers Centrepoint Trust
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 are supported by market practices
and data.
Accounting of acquisitions
(Refer to Notes 8 and 9 to the financial statements)
Risk
The Group makes acquisitions as part of its business strategy. For the financial year ended 30 September 2019, the Group
acquired PGIM Real Estate AsiaRetail Fund Limited (“PGIM ARF”) for an aggregate considerations of $380.0 million, and
Sapphire Star Trust (“SST”) for an aggregate considerations of $288.5 million.
Such transactions can be complex and judgement is involved in determining whether each transaction is a business
combination or an acquisition of an asset, with different accounting treatment applicable. In accounting for a business
combination, judgements are applied and there exist inherent uncertainty in estimating the fair value of the identified
assets and liabilities that make up the acquisition; and allocating the overall purchase price to those identified assets and
liabilities, with any excess or shortfall being recognised as goodwill on the balance sheet or a bargain purchase in the
statement of total return respectively.
The assessment of this judgement is a key focus area of our audit.
Our response
We have assessed the accounting of the acquisitions by examining legal and contractual documents to determine whether
these acquisitions are business combinations or the acquisition of assets.
When an acquisition is determined to be a business combination, we read the purchase price allocation report and
assessed the allocation of the purchase price to significant identified assets and liabilities acquired. We compared the
methodologies and key assumptions used in deriving the significant allocated values to generally accepted market
practices and market data.
Our findings
The acquisition in PGIM ARF has been appropriately accounted for as a business combination. The methods and
assumptions used in estimating the fair values of significant identified assets and liabilities and the resulting allocation in
the purchase price were appropriate.
The acquisition in SST has been appropriately accounted for as an acquisition of asset.
Annual Report 2019 129
Independent
Auditors’ Report
TO THE UNITHOLDERS
FRASERS CENTREPOINT TRUST
(CONSTITUTED UNDER A TRUST DEED (AS AMENDED) IN THE REPUBLIC OF SINGAPORE)
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 all other information prior to the date of this auditors’ report except for the Statistics of Unitholdings
(the “Report”) which 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 Report, 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.
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.
130 Frasers Centrepoint Trust
Independent
Auditors’ Report
TO THE UNITHOLDERS
FRASERS CENTREPOINT TRUST
(CONSTITUTED UNDER A TRUST DEED (AS AMENDED) IN THE REPUBLIC OF SINGAPORE)
•
•
•
•
•
Obtain an understanding of internal controls 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.
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 2019
Balance
Sheets
AS AT 30 SEPTEMBER 2019
Non-current assets
Investment properties
Fixed assets
Intangible assets
Investment in subsidiaries
Investment in associates
Investment in joint ventures
Loan to joint venture
Current assets
Trade and other receivables
Financial derivatives
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Current portion of security deposits
Deferred income
Interest-bearing borrowings
Provision for taxation
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
Hedging reserve
Unitholders’ funds and reserves
Units in issue (’000)
Net asset value per Unit ($)
* Denotes amount less than $500
Annual Report 2019 131
Group
Trust
Note
2019
$’000
2018
$’000
2019
$’000
2018
$’000
4
5
6
7
8
9
9
10
11
12
13
14
15
11
15
14
16
17
18
2,846,000
85
–
–
457,470
177,273
113,810
3,594,638
2,749,000
149
12
–
66,060
227
–
2,815,448
2,846,000
85
–
1
64,608
173,558
113,810
3,198,062
2,749,000
149
12
*
64,608
1
–
2,813,770
3,142
–
13,103
16,245
3,004
56
21,864
24,924
193,346
–
12,834
206,180
3,004
56
21,864
24,924
3,610,883
2,840,372
3,404,242
2,838,694
47,329
22,609
2
295,049
11
365,000
975
744,756
29,093
–
774,824
46,203
16,292
13
217,000
–
279,508
–
595,588
31,518
2
627,108
47,380
22,609
2
295,049
–
365,040
975
554,900
29,093
–
584,968
46,227
16,292
13
217,000
–
279,532
–
595,588
31,518
2
627,108
1,139,824
906,616
950,008
906,640
2,471,059
1,933,756
2,454,234
1,932,054
2,489,921
(18,829)
(33)
2,471,059
1,952,572
(18,816)
–
1,933,756
2,454,234
–
–
2,454,234
1,932,054
–
–
1,932,054
1,116,284
926,392
1,116,284
926,392
2.21
2.08
2.20
2.08
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
132 Frasers Centrepoint Trust
Statements of
Total Return
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2019
Gross revenue
Property expenses
Net property income
Interest income
Other income
Interest income from joint venture
Borrowing costs
Asset management fees
Valuation fees
Trustee’s fees
Audit fees
Other professional fees
Other charges
Net income
Distributions from subsidiary
Distributions from associate
Distributions from joint ventures
Share of results of associates
– operations
– revaluation gain/(deficit)
Share of results of joint ventures
– operations
– revaluation gain
Impairment loss on investment in joint venture
Surplus on revaluation of investment properties
Unrealised (loss)/gain from fair valuation
of derivatives
Expenses in relation to acquisitions of an
associate and a joint venture
Total return before tax
Taxation
Total return for the year
Earnings per Unit (cents)
Basic
Diluted
Note
19
20
21
22
9
4
23
24
Group
2019
$’000
2018
$’000
Trust
2019
$’000
2018
$’000
196,386
(57,103)
139,283
193,347
(56,161)
137,186
196,386
(57,103)
139,283
193,347
(56,161)
137,186
–
131
587
(24,648)
(16,756)
(101)
(477)
(115)
(557)
(670)
96,677
–
–
–
12,665
9,883
3,159
3,250
(1,132)
93,290
25
–
–
(20,040)
(15,212)
(98)
(429)
(106)
(857)
(534)
99,935
–
–
–
4,023
(801)
550
–
–
62,740
–
–
587
(24,596)
(16,756)
(101)
(477)
(113)
(554)
(671)
96,602
7,060
3,547
2,920
–
–
–
–
(1,132)
93,290
25
–
–
(20,040)
(15,212)
(98)
(429)
(106)
(857)
(537)
99,932
–
3,420
566
–
–
–
–
–
62,740
(998)
373
(998)
373
(10,838)
205,956
(11)
205,945
–
166,820
–
166,820
(10,838)
190,451
–
190,451
–
167,031
–
167,031
20.78
18.02
19.22
18.04
20.74
17.98
19.18
18.01
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
Distribution
Statements
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2019
Income available for distribution to Unitholders
at beginning of year
Net income
Net tax adjustments (Note A)
Distribution from subsidiary
Distributions from associates
Distributions from joint ventures
Income available for distribution to Unitholders
Distributions to Unitholders:
Distribution of 2.970 cents per Unit for period
from 1/7/2017 to 30/9/2017
Distribution of 3.000 cents per Unit for period
from 1/10/2017 to 31/12/2017
Distribution of 3.100 cents per Unit for period
from 1/1/2018 to 31/3/2018
Distribution of 3.053 cents per Unit for period
from 1/4/2018 to 30/6/2018
Distribution of 2.862 cents per Unit for period
from 1/7/2018 to 30/9/2018
Distribution of 3.020 cents per Unit for period
from 1/10/2018 to 31/12/2018
Distribution of 3.137 cents per Unit for period
from 1/1/2019 to 31/3/2019
Distribution of 1.909 cents per Unit for period
from 1/4/2019 to 27/5/2019
Distribution of 1.091 cents per Unit for period
from 28/5/2019 to 30/6/2019
Annual Report 2019 133
Group
Trust
2019
$’000
2018
$’000
2019
$’000
2018
$’000
27,483
96,677
8,368
–
10,753
2,920
118,718
146,201
–
–
–
–
26,550
28,021
29,158
17,746
28,410
99,935
7,395
–
3,420
566
111,316
139,726
27,480
27,771
28,709
28,283
–
–
–
–
27,480
96,602
8,589
7,060
3,547
2,920
118,718
146,198
–
–
–
–
26,550
28,021
29,158
17,746
28,407
99,932
7,398
–
3,420
566
111,316
139,723
27,480
27,771
28,709
28,283
–
–
–
–
12,175
113,650
–
112,243
12,175
113,650
–
112,243
Income available for distribution to
Unitholders at end of year
32,551
27,483
32,548
27,480
Distribution per unit (cents) *
12.070
12.015
12.070
12.015
Note A – Net tax adjustments relate to the following items:
– Asset management fees paid/payable in Units
– Amortisation of loan arrangement fees
– Amortisation of lease incentives
– Deferred income and amortisation of rental deposits
– Other items
Net tax adjustments
5,518
1,136
1,303
1
410
8,368
5,326
715
(182)
8
1,528
7,395
5,518
1,134
1,303
1
633
8,589
5,326
715
(182)
8
1,531
7,398
* The Distribution per unit relates to the distributions in respect of the relevant financial year. The distribution relating to the last quarter
of 2019 will be paid after 30 September 2019.
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
134 Frasers Centrepoint Trust
Statements of Movements in
Unitholders’ Funds and Reserves
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2019
Group
2019
$’000
2018
$’000
Trust
2019
$’000
2018
$’000
Net assets at beginning of year
1,933,756
1,872,203
1,932,054
1,871,940
Operations
Total return for the year
205,945
166,820
190,451
167,031
Unitholders’ transactions
Creation of Units
– proceeds from equity fund raising
– issued/issuable as satisfaction of asset management fees
– issued as satisfaction of acquisition fees
Issue expenses
Distributions to Unitholders
Net increase/(decrease) in net assets resulting from
Unitholders’ transactions
Share of movements in other reserves of an associate
Movement in translation reserve (Note 16)
Movement in hedging reserve
437,366
5,518
8,999
(6,504)
(113,650)
331,729
(325)
(13)
(33)
–
5,326
–
–
(112,243)
(106,917)
–
1,650
–
437,366
5,518
8,999
(6,504)
(113,650)
331,729
–
5,326
–
–
(112,243)
(106,917)
–
–
–
–
–
–
Net assets at end of year
2,471,059
1,933,756
2,454,234
1,932,054
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
Annual Report 2019 135
Portfolio
Statements
AS AT 30 SEPTEMBER 2019
GROUP
Description of
Property
Term of
Lease
Location
Existing
Use
Investment properties in Singapore
Occupancy
Rate as at
30 September
2019
%
At Valuation
2019
$’000
2018
$’000
Percentage of
Total Assets
2018
2019
%
%
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
99-year
leasehold
from
3 January
2006
99-year
leasehold
from
15 March
1978
60-year
leasehold
from
30 April
2009
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
Yishun 10 Retail
Podium
99-year
leasehold
from
1 April 1990
51 Yishun
Central 1
Commercial
97.0 1,298,000 1,218,000
35.9
42.9
Commercial
99.0
771,500
771,000
21.4
27.1
Commercial
79.0
113,500
110,000
3.1
3.9
Commercial
97.1
189,000
186,000
5.2
6.6
Commercial
95.7
94,000
94,000
2.6
3.3
Commercial
95.9
342,000
332,000
9.5
11.7
Commercial
99.5
38,000
38,000
1.1
1.3
Investment properties, at valuation
2,846,000 2,749,000
78.8
96.8
Investment in associates (see Note 8)
Investment in joint ventures, including loan to joint venture (see Note 9)
Other assets
Total assets attributable to Unitholders
457,470
291,083
66,060
227
3,594,553 2,815,287
12.7
8.0
99.5
2.3
–
99.1
16,330
25,085
3,610,883 2,840,372
0.5
0.9
100.0 100.0
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
136 Frasers Centrepoint Trust
Portfolio
Statements
AS AT 30 SEPTEMBER 2019
TRUST
Description
of Property
Term of
Lease
Location
Existing
Use
Investment properties in Singapore
Occupancy
Rate as at
30 September
2019
%
At Valuation
2019
$’000
2018
$’000
Percentage of
Total Assets
2018
2019
%
%
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
99-year
leasehold
from
3 January
2006
99-year
leasehold
from
15 March
1978
60-year
leasehold
from
30 April
2009
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
Yishun 10 Retail
Podium
99-year
leasehold
from
1 April 1990
51 Yishun
Central 1
Commercial
97.0 1,298,000 1,218,000
38.1
42.9
Commercial
99.0
771,500
771,000
22.7
27.2
Commercial
79.0
113,500
110,000
3.3
3.9
Commercial
97.1
189,000
186,000
5.6
6.5
Commercial
95.7
94,000
94,000
2.8
3.3
Commercial
95.9
342,000
332,000
10.0
11.7
Commercial
99.5
38,000
38,000
1.1
1.3
Investment properties, at valuation
2,846,000 2,749,000
83.6
96.8
Investment in associates (see Note 8)
Investment in joint ventures, including loan to joint venture (see Note 9)
64,608
287,368
64,608
1
3,197,976 2,813,609
1.9
8.4
93.9
2.3
–
99.1
Other assets
Total assets attributable to Unitholders
206,266
0.9
25,085
3,404,242 2,838,694 100.0 100.0
6.1
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
Portfolio
Statements
AS AT 30 SEPTEMBER 2019
Annual Report 2019 137
On 30 September 2019, independent valuations of the investment properties were undertaken by CBRE Pte Ltd (“CBRE”),
Colliers International Consultancy & Valuation (Singapore) Pte Ltd (“Colliers”) and Savills Valuation and Professional
Services (S) Pte Ltd (“Savills”). 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
Causeway Point
Valuer
Valuation Method
Savills
(2018: Knight Frank)
Valuation
2019
$’000
2018
$’000
1,298,000
1,218,000
771,500
771,000
113,500
110,000
189,000
186,000
94,000
94,000
342,000
332,000
38,000
38,000
Capitalisation approach, discounted cash flow
analysis and direct comparison method (2018:
Capitalisation approach and discounted cash
flow analysis)
Capitalisation approach, discounted cash flow
analysis and direct comparison method (2018:
Capitalisation approach, discounted cash flow
analysis and direct comparison method)
Capitalisation approach, discounted cash flow
analysis and direct comparison method (2018:
Capitalisation approach, discounted cash flow
analysis and direct comparison method)
Capitalisation approach, discounted cash flow
analysis and direct comparison method (2018:
Capitalisation approach, discounted cash flow
analysis and direct comparison method)
Capitalisation approach, discounted cash flow
analysis and direct comparison method (2018:
Capitalisation approach, discounted cash flow
analysis and direct comparison method)
Capitalisation approach, discounted cash flow
analysis and direct comparison method (2018:
Capitalisation approach, discounted cash flow
analysis and direct comparison method)
Capitalisation approach, discounted cash flow
analysis and direct comparison method (2018:
Capitalisation approach, discounted cash flow
analysis and direct comparison method)
Northpoint City
North Wing
Colliers
(2018: Savills)
Anchorpoint
Colliers
(2018: Colliers)
YewTee Point
CBRE
(2018: CBRE)
Bedok Point
CBRE
(2018: CBRE)
Changi City Point Savills
(2018: Savills)
Yishun 10 Retail
Podium
Savills
(2018: Colliers)
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 $9,441,000
(2018: $9,211,000).
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
138 Frasers Centrepoint Trust
Consolidated Cash Flow
Statement
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2019
Operating activities
Total return before tax
Adjustments for:
Allowance for doubtful receivables
Write back of allowance for doubtful receivables
Borrowing costs
Asset management and acquisition fees paid/payable in Units
Depreciation of fixed assets
Amortisation of intangible assets
Share of associates’ results
Share of joint ventures’ results
Impairment loss on investment in joint venture
Surplus on revaluation of investment properties
Unrealised loss/(gain) from fair valuation of derivatives
Amortisation of lease incentives
Deferred income recognised
Write 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 associates
Distributions received from joint ventures
Capital expenditure on investment properties
Acquisition of fixed assets
Acquisition of investment in associate
Acquisition of investment in joint venture
Loan to a joint venture
Cash flows used in investing activities
Financing activities
Proceeds from borrowings
Proceeds from issue of new units
Repayment of borrowings
Borrowing costs paid
Distributions to Unitholders
Payment of transaction costs
Payment of issue expenses
Cash flows generated from/(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 12)
Significant Non-Cash Transactions
Group
2019
$’000
2018
$’000
205,956
166,820
8
(16)
24,648
14,517
93
12
(22,548)
(6,409)
1,132
(93,290)
998
1,303
(13)
–
126,391
255
4,109
130,755
9,907
2,920
(4,990)
(29)
(379,953)
(174,689)
(113,810)
(660,644)
1,121,115
437,366
(892,032)
(22,627)
(113,650)
(2,540)
(6,504)
521,128
(8,761)
21,864
13,103
62
(59)
20,040
5,326
92
18
(3,222)
(550)
–
(62,740)
(373)
(182)
(134)
1
125,099
738
11,036
136,873
3,420
566
(15,400)
(146)
–
–
–
(11,560)
180,000
–
(165,000)
(19,596)
(112,243)
(157)
–
(116,996)
8,317
13,547
21,864
During the financial years, 2,116,627 (2018: 2,392,218) Units were issued and issuable in satisfaction of asset management
fees payable in Units, amounting to a value of $5,518,174 (2018: $5,326,294) in respect of the financial year.
1,445,217 and 141,216 units were issued on 16 April 2019 and 6 May 2019 respectively in satisfaction of acquisition
fees of $3,760,320 in connection with the acquisition of PGIM ARF completed on 4 April and 26 April 2019 respectively.
1,819,199 units were issued on 17 July 2019 in satisfaction of acquisition fees of $4,333,333 in connection with the
acquisition of 33⅓% stake in SST completed on 11 July 2019. 317,996 and 14,388 units were issued on 24 September
2019 in satisfaction of acquisition fees of $905,881 in connection with the acquisition of 6⅔% stake in SST completed on
18 September 2019 and payment of an additional sum of S$3.9 million in connection with the acquisition of PGIM ARF.
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
Annual Report 2019 139
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 subsidiaries (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 subsidiaries is set out in Note 7.
The financial statements were authorised for issue by the Manager and the Trustee on 15 November 2019.
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.
Notes to theFinancial Statements 30 SEPTEMBER 2019 140 Frasers Centrepoint Trust
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 2019, the Manager has opted to receive 20% to 55%
(2018: 20% to 50%) of the asset management fees in the form of Units with the balance in cash. The portion of the
base management fees 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.
BASIS OF PREPARATION
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 have been prepared on the historical cost basis except as otherwise described in the notes
below. This is the first set of the Group’s annual financial statements in which FRS 115 Revenue from Contracts
with Customers and FRS 109 Financial Instruments have been applied. Changes to significant accounting policies
are described in Note 2.2.
These financial statements are presented in Singapore dollars, which is the Trust’s functional currency. All financial
information presented in Singapore dollars have been rounded to the nearest thousand, unless otherwise stated.
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. Actual results may differ from these estimates.
The estimates and associated assumptions are based on historical experience and relevant factors, including
expectation of further events that are believed to be reasonable under the circumstances and are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised
and in any future periods affected.
Notes to theFinancial Statements 30 SEPTEMBER 2019 Annual Report 2019 141
2.
BASIS OF PREPARATION (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 notes:
(i)
Note 3.1(i) – Business combinations;
(ii)
Note 8 – Investment in associates; and
(iii)
Note 9 – Investment in joint ventures.
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 4 – Valuation of investment properties; and
(ii)
Note 11 – Valuation of financial derivatives.
2.2
Changes in accounting policies
The Group has applied the following FRSs, amendments to and interpretations of FRS for the first time for the
annual period beginning on 1 October 2018:
•
•
•
•
•
•
•
•
•
FRS 115 Revenue from Contracts with Customers;
Clarifications to FRS 115 Revenue from Contracts with Customers (Amendments to FRS 115);
FRS 109 Financial Instruments;
Applying FRS 109 Financial Instruments with FRS 104 Insurance Contracts (Amendments to FRS 104);
Classification and Measurement of Share-based Payment Transactions (Amendments to FRS 102);
Transfers of Investment Property (Amendments to FRS 40);
Deletion of short-term exemptions for first-time adopters (Amendments to FRS 101);
Measuring an Associate or Joint Venture at Fair Value (Amendments to FRS 28); and
INT FRS 122 Foreign Currency Transactions and Advance Consideration.
Other than FRS 109, the adoption of these FRSs, amendments to standards and interpretations did not have a
material effect on the Group’s and the Trust’s financial statements.
Notes to theFinancial Statements 30 SEPTEMBER 2019 142 Frasers Centrepoint Trust
2.
BASIS OF PREPARATION (CONT’D)
2.2
Changes in accounting policies (cont’d)
FRS 109 Financial Instruments
FRS 109 sets out requirements for recognising and measuring financial assets, financial liabilities and some
contracts to buy or sell non-financial items. It also introduces a new expected credit loss (“ECL”) model and a
general hedge accounting model.
As a result of the adoption of FRS 109, the Group has adopted consequential amendments to FRS 1 Presentation
of Financial Statements, which require impairment of financial assets to be presented in a separate line item in the
statements of total return. Previously, the Group’s approach was to include the impairment of trade receivables in
other property expenses.
Additionally, the Group has adopted consequential amendments to FRS 107 Financial Instruments: Disclosures
that are applied to disclosures about 2019 but have not been generally applied to comparative information.
Changes in accounting policies resulting from the adoption of FRS 109 have been applied by the Group
retrospectively, except as described below.
•
•
The Group has used an exemption not to restate comparative information for prior periods with respect
to classification and measurement (including impairment) requirements. Accordingly, the information
presented for 2018 does not generally reflect the requirement of FRS 109, but rather those of FRS 39.
The following assessments have been made on the basis of the facts and circumstances that existed at the
date of initial application.
–
–
The determination of the business model within which a financial asset is held.
The designation and revocation of previous designations of certain financial assets and financial
liabilities as measured at fair value through profit or loss (“FVTPL”).
(i)
Classification and measurement of financial assets and financial liabilities
FRS 109 contains three principal classification categories for financial assets: measured at amortised cost,
fair value through other comprehensive income (“FVOCI”) or FVTPL. The classification of financial assets is
generally based on the business model in which a financial asset is managed and its contractual cash flow
characteristics. FRS 109 eliminates the previous FRS 39 Financial Instruments: Recognition and Measurement
categories of held-to-maturity, loans and receivables and available-for-sale.
FRS 109 largely retains the existing requirements in FRS 39 for the classification and measurement of
financial liabilities.
The adoption of FRS 109 has not had a significant effect on the Group’s accounting policies related to
financial liabilities and derivative financial instruments.
For an explanation of how the Group classifies and measures financial assets and financial liabilities and
related gains and losses under the FRS 109, see Note 3.5.
Notes to theFinancial Statements 30 SEPTEMBER 2019 Annual Report 2019 143
2.
BASIS OF PREPARATION (CONT’D)
2.2
Changes in accounting policies (cont’d)
(i)
Classification and measurement of financial assets and financial liabilities (cont’d)
The following table and the accompanying notes below explain the original measurement categories under
FRS 39 and the new measurement categories under FRS 109 of each class of the Group’s and the Trust’s
financial assets and financial liabilities as at 1 October 2018.
Original
classification
under
FRS 39
New
classification
under
FRS 109
Loans and
receivables
Designated at
FVTPL
Loans and
receivables
Amortised cost
Mandatorily at
FVTPL
Amortised cost
Other financial
liabilities
Other financial
liabilities
Other financial
liabilities
Other financial
liabilities
Other financial
liabilities
Other financial
liabilities
Loans and
receivables
Designated at
FVTPL
Loans and
receivables
Amortised cost
Mandatorily at
FVTPL
Amortised cost
Other financial
liabilities
Other financial
liabilities
Other financial
liabilities
Other financial
liabilities
Other financial
liabilities
Other financial
liabilities
1 October 2018
Original
carrying
amount
under
FRS 39
$’000
New
carrying
amount
under
FRS 109
$’000
1,745
1,745
56
56
21,864
23,665
21,864
23,665
45,141
45,141
812,588
812,588
47,810
905,539
47,810
905,539
1,745
1,745
56
56
21,864
23,665
21,864
23,665
45,165
45,165
812,588
812,588
47,810
905,563
47,810
905,563
Group
Financial assets
Trade and other receivables (1)
Financial derivatives
Cash and cash equivalents
Total financial assets
Financial liabilities
Trade and other payables (2)
Loans and borrowings
Security deposits
Total financial liabilities
Trust
Financial assets
Trade and other receivables (1)
Financial derivatives
Cash and cash equivalents
Total financial assets
Financial liabilities
Trade and other payables (2)
Loans and borrowings
Security deposits
Total financial liabilities
(1) Excludes prepayments and loan arrangement fees
(2) Excludes withholding tax
Notes to theFinancial Statements 30 SEPTEMBER 2019 144 Frasers Centrepoint Trust
2.
BASIS OF PREPARATION (CONT’D)
2.2
Changes in accounting policies (cont’d)
(ii)
Impairment of financial assets
FRS 109 replaces the ‘incurred loss’ model in FRS 39 with an ECL model. The new impairment model applies
to financial assets measured at amortised cost but not to equity instruments. The Group and the Trust have
determined that the application of FRS 109 impairment requirements at 1 October 2018 is immaterial.
3
SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied by the Group entities consistently to all the periods
presented in these financial statements, except as explained in Note 2.2, which addresses changes in accounting
policies arising from the adoption of new standards.
3.1 Basis of consolidation
(i)
Business combinations
The Group accounts for business combinations using the acquisition method when control is transferred to
the Group.
The Group measures goodwill at the date of acquisition as:
•
•
•
the fair value of the consideration transferred; plus
the recognised amount of any non-controlling interest (“NCI”) in the acquiree; plus
if the business combination is achieved in stages, the fair value of the pre-existing equity interest in
the acquiree,
over the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities
assumed. Any goodwill that arises is tested annually for impairment.
When the excess is negative, a bargain purchase gain is recognised immediately in statements of total return.
The consideration transferred does not include amounts related to the settlement of pre-existing
relationships. Such amounts are generally recognised in statements of total return.
Any contingent consideration payable is recognised at fair value at the date of acquisition and included
in the consideration transferred. If the contingent consideration that meets the definition of a financial
instrument is classified as equity, it is not remeasured and settlement is accounted for within equity.
Otherwise, other contingent consideration is remeasured at fair value at each reporting date and subsequent
changes to the fair value of the contingent consideration are recognised in statements of total return.
NCI (if any) that are present ownership interests and entitle their holders to a proportionate share of the
acquiree’s net assets in the event of liquidation are measured either at fair value or at the NCI’s proportionate
share of the recognised amounts of the acquiree’s identifiable net assets, at the date of acquisition. The
measurement basis taken is elected on a transaction-by-transaction basis. All other NCI are measured at
acquisition-date fair value, unless another measurement basis is required by FRSs.
Notes to theFinancial Statements 30 SEPTEMBER 2019 Annual Report 2019 145
3
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.1 Basis of consolidation (cont’d)
(i)
Business combinations (cont’d)
Costs related to the acquisition, other than those associated with the issue of debt or equity investments,
that the Group incurs in connection with a business combination are expensed as incurred.
Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as
transactions with owners in their capacity as owners and therefore no adjustments are made to goodwill and
no gain or loss is recognised in statements of total return. Adjustments to NCI arising from transactions that
do not involve the loss of control are based on a proportionate amount of the net assets of the subsidiary.
(ii)
Subsidiaries
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 subsidiaries
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.
When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary,
and any related NCI and other components of equity. Any resulting gain or loss is recognised in profit or loss.
Any interest retained in the former subsidiary is measured at fair value when control is lost.
(iii)
Investments in associates and joint ventures
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.
Notes to theFinancial Statements 30 SEPTEMBER 2019 146 Frasers Centrepoint Trust
3
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.1 Basis of consolidation (cont’d)
(iii)
Investments in associates and joint ventures (cont’d)
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 ventures, the Group
recognises its share of such changes in other comprehensive income. Unrealised gains and losses resulting
from transactions between the Group and associates or joint ventures 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.
The financial statements of the associates and joint ventures are prepared as the same reporting date as
the Trust. 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 8 and 9, respectively.
(iv)
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group
transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising
from transactions with equity-accounted investees are eliminated against the investment to the extent of
the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains,
but only to the extent that there is no evidence of impairment.
(v)
Property acquisitions and business combinations
Where property is acquired, via corporate acquisitions or otherwise, management considers the substance
of the assets and activities of the acquired entity in determining whether the acquisition represents the
acquisition of a business or the acquisition of an asset. The Group accounts for an acquisition as a business
combination where an integrated set of activities is acquired in addition to the property. More specifically,
consideration is made of the extent to which significant processes are acquired and, in particular, the extent
of services provided by the subsidiary.
When the acquisition does not represent a business, it is accounted for as an acquisition of a group of assets
and liabilities. The cost of the acquisition is allocated to the assets and liabilities acquired based upon their
relative fair values, and no goodwill or deferred tax is recognised.
Notes to theFinancial Statements 30 SEPTEMBER 2019 Annual Report 2019 147
3
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.2
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.
3.3
Earnings per unit
The Group presents basic and diluted earnings per unit data for its units. Basic earnings per unit is calculated
by dividing the total return attributable to Unitholders of the Group by the weighted-average number of units
outstanding during the year. Diluted earnings per unit is determined by adjusting the total return attributable to
Unitholders and the weighted-average number of units outstanding, for the effects of all dilutive potential units.
3.4
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.
Notes to theFinancial Statements 30 SEPTEMBER 2019 148 Frasers Centrepoint Trust
3
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.5
Financial instruments
(i)
Recognition and initial measurement
Non-derivative financial assets and financial liabilities
Trade receivables are initially recognised when they are originated. All other financial assets and financial
liabilities are initially recognised when the Group becomes a party to the contractual provisions of
the instrument.
A financial asset (unless it is a trade receivable without a significant financing component) or financial
liability is initially measured at fair value plus, for an item not at fair value through profit or loss (“FVTPL”),
transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a
significant financing component is initially measured at the transaction price.
(ii)
Classification and subsequent measurement
Non-derivative financial assets – Policy applicable from 1 October 2018
On initial recognition, a financial asset is classified as measured at: amortised cost; FVOCI – debt investment;
FVOCI – equity investment; or FVTPL.
Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its
business model for managing financial assets, in which case all affected financial assets are reclassified on
the first day of the first reporting period following the change in the business model.
Financial assets at amortised cost
A financial asset is measured at amortised cost if it meets both of the following conditions and is not
designated as at FVTPL:
•
•
it is held within a business model whose objective is to hold assets to collect contractual cash flows;
and
its contractual terms give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
Financial assets at FVTPL
All financial assets not classified as measured at amortised cost or FVOCI are measured at FVTPL. On initial
recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements
to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an
accounting mismatch that would otherwise arise.
Notes to theFinancial Statements 30 SEPTEMBER 2019 Annual Report 2019 149
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SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.5
Financial instruments (cont’d)
(ii)
Classification and subsequent measurement (cont’d)
Financial assets: Business model assessment – Policy applicable from 1 October 2018
The Group makes an assessment of the objective of the business model in which a financial asset is held at
a portfolio level because this best reflects the way the business is managed and information is provided to
management. The information considered includes:
•
•
•
•
the stated policies and objectives for the portfolio and the operation of those policies in practice.
These include whether management’s strategy focuses on earning contractual interest income,
maintaining a particular interest rate profile, matching the duration of the financial assets to the
duration of any related liabilities or expected cash outflows or realising cash flows through the sale
of the assets;
how the performance of the portfolio is evaluated and reported to the Group’s management;
the risks that affect the performance of the business model (and the financial assets held within that
business model) and how those risks are managed; and
the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such
sales and expectations about future sales activity.
Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not
considered sales for this purpose, consistent with the Group’s continuing recognition of the assets.
Non-derivative financial assets: Assessment whether contractual cash flows are solely payments of
principal and interest – Policy applicable from 1 October 2018
For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial
recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk
associated with the principal amount outstanding during a particular period of time and for other basic
lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.
In assessing whether the contractual cash flows are solely payments of principal and interest, the Group
considers the contractual terms of the instrument. This includes assessing whether the financial asset
contains a contractual term that could change the timing or amount of contractual cash flows such that it
would not meet this condition. In making this assessment, the Group considers:
•
•
•
•
contingent events that would change the amount or timing of cash flows;
terms that may adjust the contractual coupon rate, including variable rate features;
prepayment and extension features; and
terms that limit the Group’s claim to cash flows from specified assets (e.g. non-recourse features).
Notes to theFinancial Statements 30 SEPTEMBER 2019 150 Frasers Centrepoint Trust
3
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.5
Financial instruments (cont’d)
(ii)
Classification and subsequent measurement (cont’d)
Financial assets: Business model assessment – Policy applicable from 1 October 2018 (cont’d)
A prepayment feature is consistent with the solely payments of principal and interest criterion if the
prepayment amount substantially represents unpaid amounts of principal and interest on the principal
amount outstanding, which may include reasonable additional compensation for early termination of the
contract. Additionally, for a financial asset acquired at a significant discount or premium to its contractual
par amount, a feature that permits or requires prepayment at an amount that substantially represents the
contractual par amount plus accrued (but unpaid) contractual interest (which may also include reasonable
additional compensation for early termination) is treated as consistent with this criterion if the fair value of
the prepayment feature is insignificant at initial recognition.
Non-derivative financial assets: Subsequent measurement and gains and losses – Policy applicable from
1 October 2018
Financial assets at FVTPL
These assets are subsequently measured at fair value. Net gains and losses, including any interest or
dividend income, are recognised in the statements of total return.
Financial assets at amortised cost
These assets are subsequently measured at amortised cost using the effective interest method. The
amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and
impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in the statements
of total return.
Non-derivative financial assets – Policy applicable before 1 October 2018
The Group classifies non-derivative financial assets into the following categories: loans and receivables and
financial assets at FVTPL.
Loans and receivables
Non-derivative financial assets with fixed or determinable payments that were not quoted in an active
market were classified as loans and receivables. Subsequent to initial recognition, loans and receivables
were carried at amortised cost using the effective interest method, less any impairment losses. Gains or
losses were recognised in the statements of total return when the loans and receivables were derecognised
or impaired, as well as through the amortisation process.
Notes to theFinancial Statements 30 SEPTEMBER 2019 Annual Report 2019 151
3
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.5
Financial instruments (cont’d)
(ii)
Classification and subsequent measurement (cont’d)
Financial assets at FVTPL
Financial assets at fair value through profit or loss included 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 included 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, were also classified as held for trading unless they were 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.
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.
Non-derivative financial liabilities: Classification, subsequent measurement and gains and losses
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified
as at FVTPL if it is classified as held-for-trading or it is designated as such on initial recognition. Financial
liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are
recognised in profit or loss. Directly attributable transaction costs are recognised in statements of total
return as incurred.
Other financial liabilities are initially measured at fair value less directly attributable transaction costs. They
are subsequently measured at amortised cost using the effective interest method. Interest expense and
foreign exchange gains and losses are recognised in statements of total return. These financial liabilities
comprised loans and borrowings, trade and other payables and security deposits.
(iii)
Derecognition
Financial assets
The Group derecognises a financial asset when the contractual rights to the cash flows from the financial
asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which
substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the
Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not
retain control of the financial asset.
The Group enters into transactions whereby it transfers assets recognised in its balance sheets, but retains
either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred
assets are not derecognised.
Notes to theFinancial Statements 30 SEPTEMBER 2019 152 Frasers Centrepoint Trust
3
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.5
Financial instruments (cont’d)
(iii)
Derecognition (cont’d)
Financial liabilities
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled, or
expire. The Group also derecognises a financial liability when its terms are modified and the cash flows of
the modified liability are substantially different, in which case a new financial liability based on the modified
terms is recognised at fair value.
On derecognition of a financial liability, the difference between the carrying amount extinguished and the
consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in the
statements of total return.
(iv)
Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the statements of
financial position when, and only when, the Group currently has a legally enforceable right to set off the
amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability
simultaneously.
(v)
Cash and cash equivalent
Cash and cash equivalents comprise cash balances and short-term deposits with maturities of three months
or less from the date of acquisition that are subject to an insignificant risk of changes in their fair value, and
are used by the Group in the management of its short-term commitments.
(vi)
Derivative financial instruments and hedge accounting
The Group holds derivative financial instruments to hedge its interest rate risk exposures. Embedded
derivatives are separated from the host contract and accounted for separately if the host contract is not a
financial asset and certain criteria are met.
Derivatives are initially measured at fair value and any directly attributable transaction costs are recognised
in statements of total return as incurred. Subsequent to initial recognition, derivatives are measured at fair
value, and changes therein are generally recognised in statements of total return.
The Group designates certain derivatives and non-derivative financial instruments as hedging instruments
in qualifying hedging relationships. At inception of designated hedging relationships, the Group documents
the risk management objective and strategy for undertaking the hedge. The Group also documents the
economic relationship between the hedged item and the hedging instrument, including whether the
changes in cash flows of the hedged item and hedging instrument are expected to offset each other.
Notes to theFinancial Statements 30 SEPTEMBER 2019 Annual Report 2019 153
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SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.5
Financial instruments (cont’d)
(vi)
Derivative financial instruments and hedge accounting (cont’d)
Cash flow hedges
The Group designates certain derivatives as hedging instruments to hedge the variability in cash flows
associated with highly probable forecast transactions arising from changes in interest rates.
When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the
fair value of the derivative is recognised in unitholders’ funds and accumulated in the hedging reserve. The
effective portion of changes in the fair value of the derivative that is recognised in unitholders’ funds is
limited to the cumulative change in fair value of the hedged item, determined on a present value basis, from
inception of the hedge. Any ineffective portion of changes in the fair value of the derivative is recognised
immediately in statements of total return.
If the hedge no longer meets the criteria for hedge accounting or the hedging instrument is sold, expires, is
terminated or is exercised, then hedge accounting is discontinued prospectively. When hedge accounting
for cash flow hedges is discontinued, the amount that has been accumulated in the hedging reserve and
the cost of hedging reserve remains in unitholders’ funds until it is reclassified to statements of total return
in the same period or periods as the hedged expected future cash flows affect statements of total return.
If the hedged future cash flows are no longer expected to occur, then the amounts that have been
accumulated in the hedging reserve and the cost of hedging reserve are immediately reclassified to
statements of total return.
(vii) 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.
3.6
Fixed assets
(i)
Recognition and measurement
Items of fixed assets are measured at cost less accumulated depreciation and accumulated impairment
losses. Cost includes expenditure that is directly attributable to the acquisition of the asset.
When parts of an item of fixed asset have different useful lives, they are accounted for as separate items
(major components) of fixed asset.
The gain or loss on disposal of an item of fixed asset is recognised in statements of total return.
(ii)
Subsequent costs
The cost of replacing a component of an item of fixed asset is recognised in the carrying amount of the item
if it is probable that the future economic benefits embodied within the component will flow to the Group,
and its cost can be measured reliably. The carrying amount of the replaced component is derecognised. The
costs of the day-to-day servicing of fixed asset are recognised in statements of total return as incurred.
Notes to theFinancial Statements 30 SEPTEMBER 2019 154 Frasers Centrepoint Trust
3
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.6
Fixed assets (cont’d)
(iii)
Depreciation
Depreciation is based on the cost of an asset less its residual value. Significant components of individual
assets are assessed and if a component has a useful life that is different from the remainder of that asset,
that component is depreciated separately.
Depreciation is recognised as an expense in statements of total return on a straight-line basis over the
estimated useful lives of each component of an item of fixed asset, unless it is included in the carrying
amount of another asset. Leased assets are depreciated over the shorter of the lease term and their useful
lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term.
Depreciation is recognised from the date that the fixed assets are installed and are ready for use. The
estimated useful lives for the current and comparative years are 2 years to 10 years.
Depreciation methods, useful lives and residual values are reviewed at the end of each reporting period and
adjusted if appropriate.
3.7
Foreign currency
Foreign currency transactions
Transactions in foreign currencies are measured and recorded on initial recognition in Singapore dollars, the
functional currency of the Trust and subsidiaries, 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 the
Unitholders’ Funds as translation reserve in the Balance Sheets and recognised in the Statements of Total Return
on disposal of the foreign operation.
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 the Unitholders' Funds 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.
Notes to theFinancial Statements 30 SEPTEMBER 2019 Annual Report 2019 155
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SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.8
Impairment
(i)
Non-derivative financial assets
Policy applicable from 1 October 2018
The Group recognises loss allowances for expected credit losses (ECLs) on financial assets measured at
amortised cost.
Loss allowances of the Group are measured on either of the following bases:
•
•
12-month ECLs: these are ECLs that result from default events that are possible within the 12 months
after the reporting date (or for a shorter period if the expected life of the instrument is less than
12 months); or
Lifetime ECLs: these are ECLs that result from all possible default events over the expected life of a
financial instrument.
Simplified approach
The Group applies the simplified approach to provide for ECLs for all trade receivables. The simplified
approach requires the loss allowance to be measured at an amount equal to lifetime ECLs.
General approach
The Group applies the general approach to provide for ECLs on all other financial instruments. Under the
general approach, the loss allowance is measured at an amount equal to 12-month ECLs at initial recognition.
At each reporting date, the Group assesses whether the credit risk of a financial instrument has increased
significantly since initial recognition. When credit risk has increased significantly since initial recognition,
loss allowance is measured at an amount equal to lifetime ECLs.
When determining whether the credit risk of a financial asset has increased significantly since initial
recognition and when estimating ECLs, the Group considers reasonable and supportable information that
is relevant and available without undue cost or effort. This includes both quantitative and qualitative
information and analysis, based on the Group’s historical experience and informed credit assessment and
includes forward-looking information.
If credit risk has not increased significantly since initial recognition or if the credit quality of the financial
instruments improves such that there is no longer a significant increase in credit risk since initial recognition,
loss allowance is measured at an amount equal to 12-month ECLs.
The Group considers a financial asset to be in default when the borrower is unlikely to pay its credit
obligations to the Group in full, without recourse by the Group to actions such as realising security (if any is
held), or when the financial asset is more than 90 days past due.
The maximum period considered when estimating ECLs is the maximum contractual period over which the
Group is exposed to credit risk.
Notes to theFinancial Statements 30 SEPTEMBER 2019 156 Frasers Centrepoint Trust
3
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.8
Impairment (cont’d)
(i)
Non-derivative financial assets (cont’d)
Measurement of ECLs
ECLs are probability-weighted estimates of credit losses. Credit losses are measured at the present value
of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the
contract and the cash flows that the Group expects to receive). ECLs are discounted at the effective interest
rate of the financial asset.
Credit-impaired financial assets
At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit-
impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on
the estimated future cash flows of the financial asset have occurred.
Evidence that a financial asset is credit-impaired includes the following observable data:
•
•
•
•
•
significant financial difficulty of the borrower or issuer;
a breach of contract such as a default or being more than 90 days past due;
the restructuring of a loan or advance by the Group on terms that the Group would not consider
otherwise;
it is probable that the borrower will enter bankruptcy or other financial reorganisation; or
the disappearance of an active market for a security because of financial difficulties.
Presentation of allowance for ECLs in the balance sheets
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying
amount of these assets.
Write-off
The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that
there is no realistic prospect of recovery. This is generally the case when the Group determines that the
debtor does not have assets or sources of income that could generate sufficient cash flows to repay the
amounts subject to the write-off. However, financial assets that are written off could still be subject to
enforcement activities in order to comply with the Group’s procedures for recovery of amounts due.
Notes to theFinancial Statements 30 SEPTEMBER 2019 Annual Report 2019 157
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SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.8
Impairment (cont’d)
(i)
Non-derivative financial assets (cont’d)
Policy applicable before 1 October 2018
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.
(ii)
Associates and joint ventures
An impairment loss in respect of an associate or joint venture is measured by comparing the recoverable
amount of the investment with its carrying amount in accordance with the requirements for non-financial
assets. An impairment loss is recognised in the statements of total return. An impairment loss is reversed if
there has been a favourable change in the estimates used to determine the recoverable amount.
Notes to theFinancial Statements 30 SEPTEMBER 2019 158 Frasers Centrepoint Trust
3
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.8
Impairment (cont’d)
(iii)
Non-financial assets
The carrying amounts of the Group’s non-financial assets, other than investment properties, are reviewed
at each reporting date to determine whether there is any indication of impairment. If any such indication
exists, then the assets’ recoverable amounts are estimated.
The recoverable amount of an asset or cash-generating unit (“CGU”) is the greater of its value in use and its
fair value less costs to sell. 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 or CGU. For the purpose of impairment testing, assets that cannot
be tested individually are grouped together into the smallest group of assets that generates cash inflows
from continuing use that are largely independent of the cash inflows of other assets or CGU.
An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated
recoverable amount. Impairment losses are recognised in the statements of total return.
Impairment losses recognised in prior periods are assessed at each reporting date for any indications that
the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the
estimates used to determine the 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 or amortisation, if no impairment loss had been recognised.
3.9
Intangible assets
Software is initially recognised at cost and subsequently carried at cost less accumulated amortisation.
Amortisation is recognised in statements of total return on a straight-line basis over its estimated useful life of
5 years.
Amortisation methods, useful lives and residual values are reviewed at the end of each reporting period and
adjusted if appropriate.
3.10
Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent
to initial recognition, interest-bearing borrowings are stated at amortised cost with any difference between cost
and redemption rate being recognised in the Statements of Total Return over the period of the borrowings on an
effective interest basis.
3.11
Interest income and borrowing costs
Interest income is recognised as it accrues, using the effective interest method.
Borrowing costs comprise interest expense on loans and borrowings, and amortisation of loans and borrowings
related costs. Finance costs are recognised in the statements of total return using the effective interest method.
Notes to theFinancial Statements 30 SEPTEMBER 2019 Annual Report 2019 159
3
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.12
Investment properties
Investment properties are properties held either to earn rental income or for capital appreciation or for both, but
not for sale in the ordinary course of business, use in production or supply of goods or services or for administrative
purposes. Investment properties are measured at cost on initial recognition and subsequently at fair value
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 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.
Cost includes expenditure that is directly attributable to the acquisition of the investment property. Any gain or
loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal
and the carrying amount of the item) is recognised in statements of total return.
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.
3.13 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 3.15(i).
3.14 Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that
can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the
obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects
current market assessments of the time value of money and the risks specific to the liability. The unwinding of the
discount is recognised as finance cost.
3.15 Revenue recognition
Rental income
Rental income from investment property is recognised as ‘revenue’ on a straight-line basis over the term of the
lease. Lease incentives granted are recognised as an integral part of the total rental income, over the term of the
lease. Rental income from subleased property is recognised as ‘other income’.
Notes to theFinancial Statements 30 SEPTEMBER 2019 160 Frasers Centrepoint Trust
3
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.16 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 financial liabilities is set out in Note 3.5.
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.
3.17 Segment reporting
An operating segment is a component of the Group that engages in business activities from which it may earn
revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s
other components. All operating segments’ operating results are reviewed regularly by the Board of Directors of
the Manager to make decisions about resources to be allocated to the segment and to assess its performance, and
for which discrete financial information is available.
Segment results that are reported to the Board of Directors of the Manager include items directly attributable
to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly
borrowing costs and asset management fees.
Segment capital expenditure is the total cost incurred to acquire investment properties and fixed assets.
3.18 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 that affects neither the accounting profit nor taxable profit or loss; and
are associated with investments in subsidiaries, associates and joint ventures 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.
Notes to theFinancial Statements 30 SEPTEMBER 2019 Annual Report 2019 161
3
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.18 Taxation (cont’d)
(ii)
Deferred tax (cont’d)
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, or
on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax
assets and liabilities will be realised simultaneously.
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.
Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it
has become probable that future taxable profits will be available against which they can be used.
In determining the amount of current and deferred tax, the Group takes into account the impact of uncertain
tax positions and whether additional taxes and interest may be due. The Group believes that its accruals
for tax liabilities are adequate for all open tax years based on its assessment of many factors, including
interpretations of tax law and prior experience. This assessment relies on estimates and assumptions and
may involve a series of judgements about future events. New information may become available that
causes the Group to change its judgement regarding the adequacy of existing tax liabilities; such changes
to tax liabilities will impact tax expense in the period that such a determination is made.
(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 Qualifying foreign non-individual investors or foreign funds or
where the Units are held by nominee Unitholders who can demonstrate that the Units are held for
beneficial owners who are Qualifying foreign non-individual investors or foreign funds, the Trustee
and the Manager will deduct/withhold tax at a reduced rate of 10% from the distributions.
Notes to theFinancial Statements 30 SEPTEMBER 2019 162 Frasers Centrepoint Trust
3
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.18 Taxation (cont’d)
(iii)
Tax transparency (cont’d)
A Qualifying non-individual investor or foreign fund refers to a non-resident non-individual unitholder or
foreign fund who:
does not have any permanent establishment in Singapore (other than a fund manager in Singapore); or
(i)
carries on any operation through a permanent establishment in Singapore (other than a fund
manager in Singapore), where the funds used by that person to acquire the units in the Trust are not
obtained from that operation.
A Qualifying Unitholder is a unitholder who is:
(i)
an individual (including those who purchased units in the Trust through agent banks or Supplementary
Retirement Scheme (“SRS”) operators which act as a nominee under the CPF Investment Scheme or
the SRS respectively);
(ii)
a company incorporated and resident in Singapore;
(iii)
a Singapore branch of a foreign company;
(iv)
(v)
(vi)
a body of persons (excluding companies or partnerships) incorporated or registered in Singapore,
including charities registered under Charities Act (Cap. 37) or established by any written law, town
councils, statutory boards, co-operative societies registered under the Co-operatives Societies Act
(Cap. 62) or trade unions registered under the Trade Unions Act (Cap. 333);
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); or
real estate investment trust exchange-traded funds (“REIT ETFs”) which have been accorded the tax
transparency treatment.
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.
(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.
Notes to theFinancial Statements 30 SEPTEMBER 2019 Annual Report 2019 163
3
SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
3.19 Unitholders’ funds
Unitholders’ funds represent the Unitholders’ residual interest in the Group’s net assets upon termination and
are classified as equity. Incremental costs directly attributable to the issuance of Units are deducted against
Unitholders’ funds.
3.20 New standards and interpretations not yet adopted
A number of new standards and interpretations and amendments to standards are effective for annual periods
beginning after 1 October 2018 and earlier application is permitted; however, the Group has not early adopted the
new or amended standards and interpretations in preparing these financial statements.
The following new FRSs, interpretations and amendments to FRSs are effective for annual periods beginning after
1 October 2018:
Applicable to 2020 financial statements
•
•
•
•
•
•
•
•
FRS 116 Leases;
INT FRS 123 Uncertainty over Income Tax Treatments;
Long-term Interests in Associates and Joint Ventures (Amendments to FRS 28);
Prepayment Features with Negative Compensation (Amendments to FRS 109);
Previously Held Interest in a Joint Operation (Amendments to FRS 103 and FRS 111);
Income Tax Consequences of Payments on Financial Instruments Classified as Equity (Amendments to FRS 12);
Borrowing Costs Eligible for Capitalisation (Amendments to FRS 23); and
Plan Amendment, Curtailment or Settlement (Amendments to FRS 19).
Applicable to 2022 financial statements
•
FRS 117 Insurance Contracts
Mandatory effective date deferred
•
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to FRS
110 and FRS 28)
The Group has assessed the estimated impact that initial application of FRS 116 will have on the financial statements
and the Group does not expect the impact on the financial statements to be significant as described below.
FRS 116 substantially carries forward the current existing lessor accounting requirements. Accordingly, the Group
continues to classify its leases as operating leases or finance leases, and to account for these two types of leases
using the existing operating lease and finance lease accounting models respectively. However, FRS 116 requires
more extensive disclosures to be provided by a lessor.
Notes to theFinancial Statements 30 SEPTEMBER 2019 164 Frasers Centrepoint Trust
4.
INVESTMENT PROPERTIES
At beginning
Capital expenditure
Surplus on revaluation taken to Statements of Total Return
At end
Group and Trust
2019
$’000
2018
$’000
2,749,000
5,013
2,754,013
2,668,100
17,978
2,686,078
91,987
2,846,000
62,922
2,749,000
The investment properties owned by the Group and the Trust are set out in the Portfolio Statements on pages 124
to 126.
Anchorpoint has been mortgaged as security for a $80 million secured five-year term loan from DBS Bank Ltd
(Note 15(a)(ii)).
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 15(a)(iii)).
Changi City Point has been mortgaged as security for a $190 million secured three- and five-year term loan from
BNP Paribas (Note 15(a)(iv)).
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 2019.
Notes to theFinancial Statements 30 SEPTEMBER 2019 Annual Report 2019 165
4.
INVESTMENT PROPERTIES (CONT’D)
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 liability that are not based on observable market data (unobservable inputs).
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 2019
Non-financial assets
Investment properties
At 30 September 2018
Non-financial assets
Investment properties
Level 3 fair value measurements
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
–
–
–
2,846,000
2,846,000
–
2,749,000
2,749,000
The following table shows the information about fair value measurements using significant unobservable inputs
(Level 3):
Fair value at
30 September
2019
$’000
Description
Valuation
techniques
Key
unobservable
inputs
Range of
unobservable inputs
Investment
properties
2,846,000 Capitalisation
approach
Capitalisation
rate
3.75% – 5.00%
(2018: 3.75% – 5.00%)
Discounted
cash flow
analysis
Discount rate
7.00% – 7.50%
(2018: 7.00% – 7.75%)
Terminal yield
4.00% – 5.25%
(2018: 4.00% – 5.25%)
Direct
comparison
method
Transacted
prices
$1,209 – $4,379 psf (1)
(2018: $1,209 – $2,525 psf)
Relationship of
unobservable
inputs to fair
value
The higher the
rates, the lower
the fair value.
The higher the
rates, the lower
the fair value.
The higher the
rates, the lower
the fair value.
The higher the
comparable
values, the higher
the fair value.
(1) For Causeway Point, YewTee Point, Bedok Point, Changi City Point and Yishun 10 (2018: YewTee Point and Bedok Point).
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.
Notes to theFinancial Statements 30 SEPTEMBER 2019 166 Frasers Centrepoint Trust
4.
INVESTMENT PROPERTIES (CONT’D)
Level 3 fair value measurements (cont’d)
The key unobservable inputs correspond to:
•
•
•
discount rate, based on the risk-free rate for 10-year bonds issued by the government of 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.
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
2019
$’000
91,987
1,303
93,290
2018
$’000
62,922
(182)
62,740
Direct operating expenses (including repairs and maintenance) arising from rental generating properties are
disclosed on Note 20 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.
Notes to theFinancial Statements 30 SEPTEMBER 2019 Annual Report 2019 167
Equipment,
furniture and fittings,
and others
Group and Trust
2019
$’000
2018
$’000
421
29
(49)
401
272
93
(49)
316
149
85
291
162
(32)
421
211
92
(31)
272
80
149
Software
Group and Trust
2019
$’000
2018
$’000
90
–
90
78
12
90
12
–
90
–
90
60
18
78
30
12
5.
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
6.
INTANGIBLE ASSETS
Cost
At beginning
Additions
At end
Accumulated depreciation
At beginning
Charge for the year
At end
Carrying amount
At beginning
At end
Notes to theFinancial Statements 30 SEPTEMBER 2019 168 Frasers Centrepoint Trust
7.
INVESTMENT IN SUBSIDIARIES
Unquoted equity investments, at cost
* Denotes amount less than $500.
Details of the subsidiaries are as follows:
Name of subsidiary
Place of incorporation/ business
FCT MTN Pte. Ltd. (1)
FCT Holdings (Sigma) Pte. Ltd. (1)
(1) Audited by KPMG LLP, Singapore
Singapore
Singapore
2019
$’000
1
Trust
2018
$’000
*
Effective equity
interest held by
the Trust
2019
%
100
100
2018
%
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.
FCT Holdings (Sigma) Pte. Ltd. (“FCT Sigma”) is a wholly-owned subsidiary with share capital of $1,000 comprising
1,000 ordinary shares. The principal activity of the subsidiary is investment holding.
8.
INVESTMENT IN ASSOCIATES
Investments, at cost
Share of post-acquisition reserves
Translation difference
Allowance for impairment
Details of the associates are as follows:
Group
Trust
2019
$’000
454,537
28,521
(18,829)
464,229
(6,759)
457,470
2018
$’000
74,584
17,051
(18,816)
72,819
(6,759)
66,060
2019
$’000
74,584
–
–
74,584
(9,976)
64,608
2018
$’000
74,584
–
–
74,584
(9,976)
64,608
Name of associates
Place of
incorporation/
business
Effective equity
interest held by
the Group
2019
%
2018
%
Effective equity
interest held by
the Trust
2019
%
2018
%
Hektar Real Estate
Investment Trust (1)
PGIM Real Estate AsiaRetail
Fund Limited (“PGIM ARF”) (2)
Malaysia
Bermuda/
Singapore
31.15
31.15
31.15
31.15
21.13 (3)
–
–
–
(1) Audited by BDO, Malaysia
(2) Audited by KPMG LLP, Singapore
(3) Following the investors’ share redemption in the capital of PGIM ARF on 30 September 2019, the Group’s equity interest is now
24.82%.
Notes to theFinancial Statements 30 SEPTEMBER 2019 Annual Report 2019 169
8.
INVESTMENT IN ASSOCIATES (CONT’D)
(a)
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.
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 2019, the Group has estimated the results of H-REIT for the
quarter ended 30 September 2019 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 results for H-REIT are equity accounted for at the Group level, net of 10% (2018: 10%) withholding tax
in Malaysia.
The fair value of H-REIT based on published price quotations was $46,774,000 (2018: $58,883,000).
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 deficit
Total return for the year
2019
$’000
2018
$’000
403,744
11,422
415,166
23,717
184,167
207,884
413,632
12,059
425,691
40,694
167,507
208,201
44,742
(31,746)
(3,076)
9,920
44,689
(30,658)
(2,699)
11,332
(4) The “Assets and liabilities” is based on the latest available unaudited management accounts as at 30 June 2019 and
30 June 2018, respectively.
(5) The “Results” is for six months ended 30 June 2019 and 30 June 2018 respectively and pro-rated six month results from
the audited financial statements for the period ended 31 December 2018 and 31 December 2017, respectively.
As at 30 September 2019, the associate’s property portfolio comprises Subang Parade in Selangor, Mahkota
Parade in Melaka, Wetex Parade and Segamat Central in Johor, Central Square and Kulim Central in Kedah.
Notes to theFinancial Statements 30 SEPTEMBER 2019 170 Frasers Centrepoint Trust
8.
INVESTMENT IN ASSOCIATES (CONT’D)
(b)
PGIM Real Estate AsiaRetail Fund Limited (“PGIM ARF”) is an open-end private investment vehicle set up as
a company incorporated in Bermuda and the largest non-listed retail mall fund in Singapore.
On 4 April 2019 and 26 April 2019, the Group, through its wholly-owned subsidiary, FCT Holdings (Sigma)
Pte. Ltd., purchased 99,150 shares in the capital of PGIM ARF for a total consideration of approximately
S$380.0 million.
The acquisition has been accounted for as a business combination, because of the strategic management
function and associated processes purchased along with the acquisition. The Group engaged an independent
firm to perform Purchase Price Allocation (“PPA”) for PGIM ARF and was finalised during the current financial year.
Included in the Group’s carrying amount of its investment in PGIM ARF is goodwill amounting to S$5,591,000.
No disclosure of fair value is made for the associate as it is not quoted on any market.
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 (1)
Non-current assets
Current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Results (2)
Revenue
Expenses
Revaluation surplus
Other comprehensive income
Total return for the period
2019
$’000
3,014,711
251,991
3,266,702
768,962
920,476
1,689,438
118,380
(80,864)
92,915
(1,396)
129,035
(1) The “Assets and liabilities” is based on the latest available unaudited management accounts as at 30 September 2019.
(2) The “Results” is for six months ended 30 September 2019.
As at 30 September 2019, the associate’s property portfolio comprises Tiong Bahru Plaza, White Sands,
Hougang Mall, Century Square and Tampines 1 and an office property (Central Plaza) in Singapore, Setapak
Central Mall in Kuala Lumpur and 1st Avenue Mall in Penang.
Group’s interest in associates at beginning of the year
66,060
64,608
2019
$’000
2018
$’000
Group’s share of:
– Profit after taxation
– Revaluation gain/(deficit)
– Other comprehensive income
Total comprehensive income
Additions during the year
Dividends received during the year
Translation difference
Carrying amount of interest at end of the year
12,665
9,883
(325)
22,223
379,953
(10,753)
(13)
457,470
4,023
(801)
–
3,222
–
(3,420)
1,650
66,060
Notes to theFinancial Statements 30 SEPTEMBER 2019 Annual Report 2019 171
9.
INVESTMENT IN JOINT VENTURES
Unquoted equity investments, at cost
Share of post-acquisition reserves
Allowance for impairment
Loan to joint venture
Details of the joint ventures are as follows:
Name of joint ventures
Changi City Carpark Operations LLP
Sapphire Star Trust
FC Retail Trustee Pte. Ltd.
Group
Trust
2019
$’000
2018
$’000
2019
$’000
2018
$’000
174,690
3,715
178,405
(1,132)
113,810
291,083
1
226
227
–
–
227
174,690
–
174,690
(1,132)
113,810
287,368
1
–
1
–
–
1
Place of
incorporation/
business
Singapore
Singapore
Singapore
Effective equity
interest held by the
Group and Trust
2019
%
43.68
40.00
40.00
2018
%
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.
During the year, the Group completed its acquisition of 40.00% stake in Sapphire Star Trust (“SST”), a private trust
that owns Waterway Point, a suburban shopping mall located in Punggol. The Group jointly controls the venture
with other partners under the contractual agreement and requires unanimous consent for all major decisions over
the relevant activities.
Loan to joint venture is unsecured and not expected to be repaid within the next twelve months. The loan bears
interest of 2.708% per annum.
No disclosure is of fair value is made for the joint ventures as they are not quoted on any market.
Notes to theFinancial Statements 30 SEPTEMBER 2019 172 Frasers Centrepoint Trust
9.
INVESTMENT IN JOINT VENTURES (CONT’D)
The following summarised financial information relating to the material joint venture has not been adjusted for
the percentage of ownership interest held by the Group.
Assets and liabilities (1)
Non-current assets
Current assets (a)
Total assets
Current liabilities
Non-current liabilities (b)
Total liabilities
(a) Includes cash and cash equivalents of $40,914,000
(b) Includes non-current financial liabilities (excluding trade and other payables and provisions) of $575,477,000
Results (2)
Revenue
Expenses (c)
Revaluation surplus
Total return for the period
(c)
Includes:
– depreciation of $2,000
–
–
interest income $82,000
interest expense $5,200,000
2019
$’000
1,300,010
42,891
1,342,901
39,594
869,157
908,751
16,444
(8,840)
221
7,825
(1) The “Assets and liabilities” is based on the latest available unaudited management accounts as at 30 September 2019.
(2) The “Results” is for period from 12 July 2019 to 30 September 2019.
Group’s interest in joint ventures at beginning of the year
227
243
2019
$’000
2018
$’000
Group’s share of:
– Profit after taxation
– Revaluation surplus
Total comprehensive income
Investment during the year
Loan to joint venture
Dividends received during the year
Allowance for impairment
Carrying amount of interest at end of the year
3,159
3,250
6,409
174,689
113,810
(2,920)
(1,132)
291,083
550
–
550
–
–
(566)
–
227
Notes to theFinancial Statements 30 SEPTEMBER 2019 Annual Report 2019 173
10.
TRADE AND OTHER RECEIVABLES
Trade receivables
Allowance for doubtful receivables
Net trade receivables
Deposits
Prepayments
Amount due from a subsidiary (non-trade)
Amount due from related parties (non-trade)
Other receivables
Loan arrangement fees
Group
Trust
2019
$’000
1,419
(11)
1,408
66
189
–
23
884
572
3,142
2018
$’000
1,650
(19)
1,631
66
225
–
35
13
1,034
3,004
2019
$’000
1,419
(11)
1,408
66
162
190,231
23
884
572
193,346
2018
$’000
1,650
(19)
1,631
66
225
–
35
13
1,034
3,004
Trade receivables are recognised at their original invoiced amounts which represent their fair values on initial
recognition. Non-trade amounts due from a subsidiary and related parties are unsecured, interest-free and
repayable on demand.
11.
FINANCIAL DERIVATIVES
Derivative assets
Interest rate swaps used for hedging
– Current
Derivative liabilities
Interest rate swaps used for hedging
– Non-current
Financial derivatives as a percentage of net assets
Group and Trust
2019
$’000
2018
$’000
–
56
975
–
0.04%
0.00%
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 2019, the Group has four (2018: two) interest rate swap contracts with a total notional amount
of $213 million (2018: $148 million). Under the contracts, the Group pays fixed interest rate in the range of 1.587%
to 1.905% (2018: 1.330% to 1.765%).
The fair value of the interest rate swaps is determined using valuation technique as disclosed in Note 26(b).
As at 30 September 2019, where the interest rate swaps are designated as the hedging instruments in qualifying
cash flow hedges, the effective portion of the changes in fair value of the interest rate swaps amounting to
$0.03 million loss (2018: $nil) was recognised in the hedging reserve. There was no ineffectiveness recognised
from the hedge.
Notes to theFinancial Statements 30 SEPTEMBER 2019 174 Frasers Centrepoint Trust
12.
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
13,103
21,864
12,834
21,864
Group
2019
$’000
2018
$’000
Trust
2019
$’000
2018
$’000
13.
TRADE AND OTHER PAYABLES
Trade payables and accrued operating expenses
Amounts due to related parties (trade)
Amounts due to a subsidiary (non-trade)
Deposits and advances
Interest payable
Other payables
Withholding tax
Group
Trust
2019
$’000
23,277
11,187
–
2,866
5,084
76
4,839
47,329
2018
$’000
26,738
9,502
–
4,630
4,213
58
1,062
46,203
2019
$’000
23,298
11,187
81
2,866
5,033
76
4,839
47,380
2018
$’000
26,762
9,502
–
4,630
4,213
58
1,062
46,227
Included in trade payables and accrued operating expenses is an amount due to the Trustee of $92,423 (2018: $72,375).
Included in amounts due to related parties are amounts due to the Manager of $6,965,686 (2018: $6,266,437)
and the Property Manager of $4,008,647 (2018: $3,016,739) respectively. The amounts due to related parties are
unsecured, interest free and payable within the next 3 months.
14.
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
Group and Trust
2019
$’000
2018
$’000
144
–
(113)
31
129
13
(113)
29
2
2
–
2
362
–
(218)
144
213
134
(218)
129
15
13
2
15
Notes to theFinancial Statements 30 SEPTEMBER 2019 Annual Report 2019 175
15.
INTEREST-BEARING BORROWINGS
Current liabilities
Term loan (unsecured)
Medium Term Notes (unsecured)
Loan from subsidiary (unsecured)
Short term loans (unsecured)
Non-current liabilities
Term loans (secured)
Term loan (unsecured)
Loan from subsidiary (unsecured)
Medium Term Notes (unsecured)
(a)
Term loans (secured)
Group
Trust
2019
$’000
2018
$’000
2019
$’000
2018
$’000
–
159,966
–
135,083
295,049
405,049
189,856
–
149,851
744,756
60,000
60,000
–
97,000
217,000
285,874
–
–
309,714
595,588
–
–
159,966
135,083
295,049
405,049
–
149,851
–
554,900
60,000
–
60,000
97,000
217,000
285,874
–
309,714
–
595,588
(i)
In December 2016, the Trust entered into a facility agreement with DBS Bank Ltd for a secured five-
year term loan of $70 million (the “$70 million Secured Term Loan”).
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.
The S$70 million Secured Term Loan had been fully repaid on 21 June 2019 and its mortgage had
been discharged.
(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.
Notes to theFinancial Statements 30 SEPTEMBER 2019 176 Frasers Centrepoint Trust
15.
INTEREST-BEARING BORROWINGS (CONT’D)
(a)
Term loans (secured) (cont’d)
(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.
(iv)
In April 2019, the Trust entered into a facility agreement with BNP Paribas for a secured three and
five-year term loan of S$190 million (the “S$190 million Secured Term Loan”).
The S$190 million Secured Term Loan is principally secured on the following:
•
•
•
•
a mortgage over Changi City 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 Changi City Point;
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 Changi City Point; and
a first fixed and floating charge over all present and future assets of FCT in connection with
Changi City Point.
(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
remaining unsecured term loan of $60 million was repaid in June 2019.
In September 2019, FCT Holdings (Sigma) Pte. Ltd. entered into a facility agreement with DBS Bank Ltd,
Citibank N.A. Singapore branch and BNP Paribas for an unsecured four-year term loan of $191 million.
Notes to theFinancial Statements 30 SEPTEMBER 2019 Annual Report 2019 177
15.
INTEREST-BEARING BORROWINGS (CONT’D)
(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 2019, the aggregate balance of the Notes issued by the Group under the FCT MTN
Programme amounted to $310 million (2018: $370 million), consisting of:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
$70 million (2018: $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;
$50 million (2018: $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;
$Nil (2018: $60 million) Fixed Rate Notes which matured on 10 April 2019 and bear a fixed interest
rate of 2.900% per annum payable semi-annually in arrear;
$90 million (2018: $90 million) 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;
$30 million (2018: $30 million) 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; and
$70 million (2018: $$70 million) Fixed Rate Notes which mature on 8 November 2024 and bear a
fixed interest rate of 2.770% per annum payable semi-annually in arrear.
(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 2019, no Note has been issued under this programme.
Notes to theFinancial Statements 30 SEPTEMBER 2019 178 Frasers Centrepoint Trust
15.
INTEREST-BEARING BORROWINGS (CONT’D)
(e)
Short term loans (unsecured)
The Trust has obtained unsecured credit facilities totalling $314 million (2018: $200 million). As at
30 September 2019, total borrowings drawn down by the Trust on these facilities amounted to $135.1 million
(2018: $97 million).
Reconciliation of movements of liabilities to cash flows arising from financing activities
Liabilities
Interest-
bearing
borrowings
$’000
Interest
payable
$’000
Derivative liabilities held
to hedge borrowings
Interest
rate swap -
assets
$’000
Interest
rate swap -
liabilities
$’000
Total
$’000
Group
Balance at 1 October 2017
Changes from financing cash flows
Proceeds from borrowings
Repayment of borrowings
Borrowing costs paid
Payment of transaction costs
Total changes from financing cash flows
Change in fair value
Liability-related other changes
Borrowing costs
Amortisation of loan arrangement fees
Total liability-related other changes
Balance at 30 September 2018
797,540
4,627
180,000
(165,000)
–
(157)
–
–
(19,596)
–
14,843 (19,596)
–
–
–
205
205
812,588
19,182
–
19,182
4,213
–
–
–
–
–
–
(56)
–
–
–
(56)
317
802,484
–
–
–
–
–
180,000
(165,000)
(19,596)
(157)
(4,753)
(317)
(373)
–
–
–
–
19,182
205
19,387
816,745
Balance at 1 October 2018
Changes from financing cash flows
Proceeds from borrowings
Repayment of borrowings
Borrowing costs paid
Payment of transaction costs
Total changes from financing cash flows
Change in fair value
Liability-related other changes
Borrowing costs
Amortisation of loan arrangement fees
Total liability-related other changes
Balance at 30 September 2019
812,588
4,213
(56)
–
816,745
1,121,115
(892,032)
–
(2,540)
–
–
(22,627)
–
226,543 (22,627)
–
–
–
–
–
– 1,121,115
(892,032)
–
(22,627)
–
–
(2,540)
203,916
–
–
–
56
975
1,031
–
674
674
1,039,805
23,498
–
23,498
5,084
–
–
–
–
–
–
–
23,498
674
24,172
975 1,045,864
Notes to theFinancial Statements 30 SEPTEMBER 2019 Annual Report 2019 179
16.
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
17.
UNITS IN ISSUE
Group
2019
$’000
2018
$’000
18,816
20,466
13
18,829
(1,650)
18,816
Group and Trust
2019
2018
No. of Units No. of Units
’000
’000
Units in issue
At beginning
Issue of Units
– Private placement and preferential offering
– issued as satisfaction of asset management fees
– issued as satisfaction of acquisition fee
At end
Units to be issued
– as asset management fees payable in Units
Total issued and issuable Units at end
926,392
922,448
184,000
2,154
3,738
1,116,284
–
3,944
–
926,392
1,225
1,117,509
1,262
927,654
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.
Notes to theFinancial Statements 30 SEPTEMBER 2019 180 Frasers Centrepoint Trust
17.
UNITS IN ISSUE (CONT’D)
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.
18. NET ASSET VALUE PER UNIT
Group
2019
$’000
2018
$’000
Trust
2019
$’000
2018
$’000
Net asset value per Unit is based on:
Net assets
2,471,059
1,933,756
2,454,234
1,932,054
Total issued and issuable Units (Note 17)
1,117,509
927,654
1,117,509
927,654
’000
’000
’000
’000
19.
GROSS REVENUE
Gross rental income
Turnover rental income
Carpark income
Others
Group and Trust
2019
$’000
173,494
9,441
4,656
8,795
196,386
2018
$’000
171,451
9,211
4,577
8,108
193,347
Notes to theFinancial Statements 30 SEPTEMBER 2019 20.
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
Write off of fixed assets
Others
Annual Report 2019 181
Group and Trust
2019
$’000
16,911
1,770
16,970
7,569
7,256
8
(16)
93
12
4,091
1,854
–
585
57,103
2018
$’000
15,950
2,185
17,004
7,458
6,589
62
(59)
92
18
3,956
1,900
1
1,005
56,161
(1) Relates to reimbursement of staff costs paid/payable to the Property Manager.
The Group and the Trust do not have any employees.
21.
BORROWING COSTS
Interest expense
Amortisation of loan arrangement fees
22.
ASSET MANAGEMENT FEES
Group
Trust
2019
$’000
23,512
1,136
24,648
2018
$’000
19,325
715
20,040
2019
$’000
23,462
1,134
24,596
2018
$’000
19,325
715
20,040
Asset management fees comprise $9,567,971 (2018: $8,352,441) of base fee and $7,187,918 (2018: $6,859,319) of
performance fee computed in accordance with the fee structure as disclosed in Note 1.2 to the financial statements.
An aggregate of 2,116,627 (2018: 2,392,218) Units were issued or are issuable to the Manager as satisfaction of
the asset management fees payable for the financial year ended 30 September 2019.
Notes to theFinancial Statements 30 SEPTEMBER 2019 182 Frasers Centrepoint Trust
23.
TAXATION
Reconciliation of effective tax
Net income
Income tax using Singapore tax rate
of 17% (2018: 17%)
Non-tax deductible items
Income not subject to tax
Income exempt from tax
24.
EARNINGS PER UNIT
(i)
Basic earnings per Unit
Group
2019
$’000
2018
$’000
Trust
2019
$’000
2018
$’000
96,677
99,935
96,602
99,932
16,435
1,398
1,828
(19,650)
11
16,989
1,257
581
(18,827)
–
16,422
1,460
1,803
(19,685)
–
16,988
1,258
581
(18,827)
–
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
2019
$’000
2018
$’000
Trust
2019
$’000
2018
$’000
Total return for year after tax
205,945
166,820
190,451
167,031
Weighted average number of Units in issue
991,076
925,881
991,076
925,881
(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
2019
$’000
2018
$’000
Trust
2019
$’000
2018
$’000
Total return for year after tax
205,945
166,820
190,451
167,031
Weighted average number of Units in issue
992,819
927,654
992,819
927,654
Notes to theFinancial Statements 30 SEPTEMBER 2019 Annual Report 2019 183
25.
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)
Project management fees paid/payable to the Property Manager
Reimbursement of expenses paid/payable to the Manager
Acquisition fees paid in units to the Manager in relation to the acquisitions
Acquisition of investment in a joint venture from a related
company of the Manager
Reimbursement of expenses/capital expenditure paid/payable to related
companies of the Manager
Recovery of expenses paid on behalf of related companies of the Manager
Loan to a Joint Venture
Interest income received/receivable from a Joint Venture
Income from related companies of the Manager
Reimbursement of carpark income received on behalf of a related
company of the Manager
Net carpark expenses paid/payable to the Property Manager
Car park expenses paid/payable to a Joint Venture
Group and Trust
2019
$’000
2018
$’000
18,231
–
64
8,999
145,665
144
(122)
113,810
587
(16)
1,932
170
33
17,810
672
68
–
–
499
(416)
–
–
(34)
1,340
147
34
(1) In accordance with service agreements in relation to management of the Trust and its property operations.
26.
FAIR VALUE OF ASSETS AND LIABILITIES
(a)
Assets and liabilities measured at fair value
Group and Trust
At 30 September 2019
Financial liabilities
Interest rate swaps
At 30 September 2018
Financial assets
Interest rate swaps
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
–
–
975
56
–
–
975
56
During the financial years ended 30 September 2019 and 2018, 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.
Notes to theFinancial Statements 30 SEPTEMBER 2019 184 Frasers Centrepoint Trust
26.
FAIR VALUE OF ASSETS AND LIABILITIES (CONT’D)
(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
Financial liabilities
Interest-bearing borrowings (non-current)
Security deposits (non-current)
Trust
Financial liabilities
Interest-bearing borrowings (non-current)
Security deposits (non-current)
2019
$’000
2018
$’000
Carrying
amount
Fair value
Carrying
amount
Fair value
744,756
29,093
773,849
773,654
27,911
801,565
595,588
31,518
627,106
600,523
30,056
630,579
2019
$’000
2018
$’000
Carrying
amount
Fair value
Carrying
amount
Fair value
554,900
29,093
583,993
569,656
27,911
597,567
595,588
31,518
627,106
600,523
30,056
630,579
(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.
27.
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 2019, the Group’s Aggregate Leverage stood at 32.9% (2018: 28.6%) 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.
Notes to theFinancial Statements 30 SEPTEMBER 2019 Annual Report 2019 185
27.
FINANCIAL RISK MANAGEMENT (CONT’D)
(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 security 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.
Trade receivables
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 25.0% (2018: 21.8%) of the Group’s
trade receivables were due from 5 tenants who are reputable companies located in Singapore.
The Group uses an allowance matrix to measure the ECLs of trade receivables from individual tenants,
which comprise a very large number of tenants.
Loss rates are calculated using a ‘roll rate’ method based on the probability of a receivable progressing
through successive stages of delinquency to write-off based on actual credit loss experience over
the last three years.
Trade receivables that are past due but not impaired
The Group and the Trust have trade receivables amounting to $1,408,000 (2018: $1,631,000) 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
Group and Trust
2019
$’000
1,222
99
55
19
13
1,408
2018
$’000
1,512
74
11
6
28
1,631
Notes to theFinancial Statements 30 SEPTEMBER 2019 186 Frasers Centrepoint Trust
27.
FINANCIAL RISK MANAGEMENT (CONT’D)
(b)
Financial risk management objectives and policies (cont’d)
(i)
Credit risk (cont’d)
Trade receivables that are impaired
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
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
2019
$’000
2018
$’000
11
(11)
–
19
8
(16)
–
11
19
(19)
–
79
62
(59)
(63)
19
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.
Deposits and other receivables
Impairment on these balances has been measured on the 12-month expected loss basis which
reflects the short maturity and low credit risks of the exposures. The amount of the allowance on
these balances is insignificant.
Amount due from related parties and subsidiaries
Outstanding balances with related party are unsecured and repayable on demand. ELC is assessed
from estimated cash flows recoverable from the related parties and subsidiaries based on the review
of their financial strength as at the reporting date. There is no allowance for doubtful debts arising
from these outstanding balances as the ECL is not material.
Loan to joint venture
The Group has loan to joint venture of $113,809,572 (2018: $nil). The loan to joint venture is to satisfy
their long term funding requirements. Based on an assessment of qualitative and qualitative factors
that are indicative of the risk of default, the exposure is considered to have low credit risk. Therefore
impairment on the balance has been measured on the 12-month expected credit loss basis; and the
amount of the allowance is insignificant.
Notes to theFinancial Statements 30 SEPTEMBER 2019 Annual Report 2019 187
27.
FINANCIAL RISK MANAGEMENT (CONT’D)
(b)
Financial risk management objectives and policies (cont’d)
(i)
Credit risk (cont’d)
Cash and cash equivalent
Cash is placed with financial institutions which are regulated. The maximum exposure to credit risk
is represented by the carrying value on the balance sheets. Impairment on cash and cash equivalent
has been measured on the 12-month expected loss basis and reflects the short maturities of the
exposures. The Group considers that its cash and cash equivalents have low credit risk based on
the external credit ratings of the counterparties. The amount of the allowance on cash and cash
equivalents was negligible.
(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 and Unitholders’ funds by
approximately $644,000 (2018: $157,000) and $829,000 (2018: $157,000) respectively and a twenty
five basis points decrease in interest rate, with all other variables held constant, would increase
the Group’s total return and Unitholders’ Funds by approximately $671,000 (2018: $158,000) and
$837,000 (2018: $158,000) respectively, 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 $1,298,000 (2018: $345,000) 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 $1,298,000 (2018: $345,000), 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.
Notes to theFinancial Statements 30 SEPTEMBER 2019 188 Frasers Centrepoint Trust
27.
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.
As at 30 September 2019
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 2018
Group
Trade and other payables
Security deposits
Interest-bearing borrowings
Trust
Trade and other payables
Security deposits
Interest-bearing borrowings
Within
1 year
$’000
1 to 5
years
$’000
More than
5 years
$’000
Total
$’000
42,490
421
22,612
313,304
378,827
42,541
421
22,612
309,022
374,596
45,141
16,308
234,268
295,717
45,165
16,308
234,268
295,741
–
584
29,068
714,796
744,448
–
584
29,068
510,798
540,450
–
31,421
550,056
581,477
–
31,421
550,056
581,477
–
–
25
70,202
70,227
–
–
25
70,202
70,227
–
97
72,141
72,238
–
97
72,141
72,238
42,490
1,005
51,705
1,098,302
1,193,502
42,541
1,005
51,705
890,022
985,273
45,141
47,826
856,465
949,432
45,165
47,826
856,465
949,456
Notes to theFinancial Statements 30 SEPTEMBER 2019 Annual Report 2019 189
28.
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.
The Manager 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, H-REIT for which operations are in Malaysia.
Notes to theFinancial Statements 30 SEPTEMBER 2019 190 Frasers Centrepoint Trust
28.
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
76,562
9,896
86,458
47,411
5,678
53,089
7,367
1,188
8,555
12,534
1,909
14,443
5,786
720
6,506
23,834
3,501
27,335
173,494
22,892
196,386
2019
Revenue and expenses
Gross rental income
Others
Gross revenue
Segment net
property income
65,765
39,213
3,808
10,308
2,663
17,526
139,283
Other income
Interest income from
joint venture
Unallocated expenses *
Net income
Unrealised loss from
fair valuation
of derivatives
Share of results
of associates
Share of results of
joint ventures
Impairment loss on
investment in
joint venture
Expenses in relation
to acquisitions of an
associate and
a joint venture
Surplus on revaluation
of investment
properties
Total return for the year
before tax
Taxation
Total return for the year
131
587
(43,324)
96,677
(998)
22,548
6,409
(1,132)
(10,838)
75,884
1,547
3,045
2,672
21
10,121
93,290
205,956
(11)
205,945
* Unallocated expenses include borrowing costs and asset management fees as disclosed in the Statements of Total
Return.
Notes to theFinancial Statements 30 SEPTEMBER 2019 Annual Report 2019 191
28.
SEGMENT REPORTING (CONT’D)
(a)
Business segments (cont’d)
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
77,059
9,651
86,710
46,868
5,347
52,215
7,359
1,157
8,516
12,230
1,761
13,991
5,485
679
6,164
22,450
3,301
25,751
171,451
21,896
193,347
2018
Revenue and expenses
Gross rental income
Others
Gross revenue
Segment net
property income
65,359
39,191
3,920
9,691
2,536
16,489
137,186
Interest income
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
25
(37,276)
99,935
373
3,222
550
62,740
166,820
26,915
21,789
5,168
7,083 (11,207)
12,992
* Unallocated expenses include borrowing costs and asset management fees as disclosed in the Statements of Total
Return.
Notes to theFinancial Statements 30 SEPTEMBER 2019 192 Frasers Centrepoint Trust
28.
SEGMENT REPORTING (CONT’D)
(a)
Business segments (cont’d)
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
1,303,265
812,136 114,720 190,584 95,231
343,458 2,859,394
457,470
32,251
22,821
4,372
5,585
3,548
12,884
81,461
177,273
113,810
2,936
3,610,883
17,572
11
975
1,039,805
1,139,824
As at
30 September 2019
Assets and liabilities
Segment assets
Investment in associate
Investment in
joint venture
Loan to joint venture
Unallocated assets
Total assets
Segment liabilities
Unallocated liabilities
– Trade and
other payables
– Provision for taxation
– Financial derivatives
– Interest-bearing
borrowings
Total liabilities
Other segmental
information
Allowance for
doubtful receivables
6
Write back of
allowance for
doubtful receivables
Amortisation of
lease incentives
Depreciation of
fixed assets
Amortisation of
intangible assets
(16)
(133)
8
2
Capital expenditure
– Investment properties
– Fixed assets
3,984
10
–
–
1,247
7
2
2
–
39
61
2
–
–
–
–
–
–
8
(16)
(147)
11
286
1,303
5
2
5
2
7
2
93
12
200
–
493
6
181
–
(10)
3
165
10
5,013
29
Notes to theFinancial Statements 30 SEPTEMBER 2019 Annual Report 2019 193
28.
SEGMENT REPORTING (CONT’D)
(a)
Business segments (cont’d)
Northpoint City
North Wing
and Yishun 10
Retail Podium
$’000
Causeway
Point
$’000
Anchor-
point
$’000
Bedok
YewTee
Point
Point
$’000 $’000
Changi
City Point
$’000
Group
$’000
1,222,527
818,658 111,483 187,913 95,794
335,348 2,771,723
66,060
227
2,362
2,840,372
29,863
27,104
3,416
5,390 3,266
12,632
81,671
12,357
–
812,588
906,616
–
–
106
10
3
1
44
(11)
78
51
3
–
–
–
6
–
62
(22)
(6)
(59)
(25)
(115)
(234)
(182)
6
3
–
5
3
–
7
3
–
92
18
1
(20)
8
13
3
–
1,093
14
14,817
6
310
119
892
4
92
11
774
8
17,978
162
As at
30 September 2018
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
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
doubtful receivables
12
Notes to theFinancial Statements 30 SEPTEMBER 2019 194 Frasers Centrepoint Trust
29.
COMMITMENTS
Capital expenditure contracted but not provided for
Group and Trust
2019
$’000
8,161
2018
$’000
–
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
30.
CONTINGENT LIABILITY
Group and Trust
2019
$’000
2018
$’000
155,557
171,708
2,690
329,955
153,863
168,203
3,663
325,729
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.
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
2018
%
0.92
0.55
–
2019
%
0.88
0.54
–
(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.
Notes to theFinancial Statements 30 SEPTEMBER 2019 Annual Report 2019 195
32.
SUBSEQUENT EVENTS
On 1 October 2019, amount due from a subsidiary of S$190,199,000 was capitalised and investment in subsidiaries
increased to S$190,200,002.
On 23 October 2019, the Manager declared a distribution of $32,553,000 to Unitholders in respect of the period
from 1 July 2019 to 30 September 2019.
On 25 October 2019, the Trust issued 1,225,008 new Units at a price of $2.7297 per Unit in payment of
the following: -
•
•
•
•
20% of the performance fee component of its management fee for the period from 1 October 2018 to
31 December 2018;
20% of the performance fee component of its management fee for the period from 1 January 2019 to
31 March 2019;
55% of the performance fee component of its management fee for the period from 1 April 2019 to
30 June 2019; and
35% of the base fee component and performance fee component of its management fee for the period from
1 July 2019 to 30 September 2019.
Notes to theFinancial Statements 30 SEPTEMBER 2019 196 Frasers Centrepoint Trust
Use of
Proceeds
Specific use of the proceeds from the private placement of 155,181,800 and preferential offering of 28,818,174 new units
in the Trust (the “Equity Fund Raising”) completed on 28 May 2019 and 12 June 2019, respectively.
Gross proceeds from the Equity Fund raising
Use of gross proceeds to part pare down bridging loans in connection with
the acquisitions of a stake in PGIM Real Estate AsiaRetail Fund Limited
Use of gross proceeds to finance purchase consideration for the acquisition of 33⅓% of the total
issued units of Sapphire Star Trust and 33⅓% of the issued share capital of FC Retail Trustee Pte. Ltd.
(the trustee-manager of Sapphire Star Trust) (the “Acquisition”), underwriting fees and professional
and other fees and expenses incurred in connection with the Equity Fund Raising and the Acquisition
Balance of Proceeds at end of financial year
Amount
S$ million
437.4
(247.6)
(189.8)
–
Such use of proceeds from the Equity Fund Raising is in accordance with the stated use of proceeds previously disclosed in
the Trust’s announcement dated 16 May 2019 in relation to, among other things, the Equity Fund Raising.
Statistics of
Unitholdings
Annual Report 2019 197
ISSUED AND FULLY PAID-UP UNITS
There were 1,117,509,051 Units (voting rights: one vote per Unit) outstanding as at 22 November 2019.
There is only one class of Units.
The market capitalisation was approximately S$3,084.3 million based on closing unit price of S$2.76 on 22 November 2019.
TOP TWENTY UNITHOLDERS AS AT 22 NOVEMBER 2019
As shown in the Register of Unitholders
S/No Unitholders
FRASERS PROPERTY RETAIL TRUST HOLDINGS PTE LTD
1.
CITIBANK NOMINEES SINGAPORE PTE LTD
2.
HSBC (SINGAPORE) NOMINEES PTE LTD
3.
DBS NOMINEES (PRIVATE) LIMITED
4.
DBSN SERVICES PTE. LTD.
5.
RAFFLES NOMINEES (PTE.) LIMITED
6.
FRASERS CENTREPOINT ASSET MANAGEMENT LTD
7.
BPSS NOMINEES SINGAPORE (PTE.) LTD.
8.
NTUC FAIRPRICE CO-OPERATIVE LTD
9.
DB NOMINEES (SINGAPORE) PTE LTD
10.
CGS-CIMB SECURITIES (SINGAPORE) PTE. LTD.
11.
UNITED OVERSEAS BANK NOMINEES (PRIVATE) LIMITED
12.
13.
UOB KAY HIAN PRIVATE LIMITED
14. MAYBANK KIM ENG SECURITIES PTE. LTD.
15.
16.
17.
18.
19.
20. MERRILL LYNCH (SINGAPORE) PTE. LTD.
OCBC NOMINEES SINGAPORE PRIVATE LIMITED
YAP CHONG HIN GABRIEL
CHAN WAI KHEONG
BNP PARIBAS NOMINEES SINGAPORE PTE. LTD.
PHILLIP SECURITIES PTE LTD
Total
Number of Units
% of Total
units in Issue
360,510,801
168,321,971
140,216,333
110,945,365
85,519,807
61,102,934
47,180,721
14,725,523
7,933,545
6,103,487
5,368,453
3,991,258
3,509,676
2,182,876
2,156,372
2,120,000
1,996,200
1,741,811
1,591,929
1,457,884
1,028,676,946
32.26
15.06
12.55
9.93
7.65
5.47
4.22
1.32
0.71
0.55
0.48
0.36
0.31
0.20
0.19
0.19
0.18
0.16
0.14
0.13
92.06
UNITHOLDINGS OF DIRECTORS OF THE MANAGER AS AT 21 OCTOBER 2019
Name of Director
Mr Christopher Tang Kok Kai
Dr Cheong Choong Kong
Number of FCT Units held
Direct Interest
Deemed Interest
50,000
144,649
639,220
–
198 Frasers Centrepoint Trust
Statistics of
Unitholdings
SUBSTANTIAL UNITHOLDERS AS AT 22 NOVEMBER 2019
Substantial Unitholders
Direct Interest
Deemed Interest
Number of Units
% Number of Units
%
Total Number
of Units Held
%
Frasers Property Retail Trust
Holdings Pte. Ltd.
Frasers Property 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)
Schroders plc (13)
360,510,801
–
32.26
–
–
407,691,522
–
36.48
360,510,801
407,691,522
32.26
36.48
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
407,691,522
36.48
407,691,522
36.48
407,691,522
407,691,522
407,691,522
407,691,522
407,691,522
407,691,522
407,691,522
407,691,522
407,691,522
407,691,522
58,420,934
36.48
36.48
36.48
36.48
36.48
36.48
36.48
36.48
36.48
36.48
5.23
407,691,522
407,691,522
407,691,522
407,691,522
407,691,522
407,691,522
407,691,522
407,691,522
407,691,522
407,691,522
58,420,934
36.48
36.48
36.48
36.48
36.48
36.48
36.48
36.48
36.48
36.48
5.23
Notes:
(1) Frasers Property Limited (“FPL”) holds a 100% direct interest in each of Frasers Centrepoint Asset Management Ltd (“FCAM”) and
Frasers Property Retail Trust Holdings Pte. Ltd. (“FPRTH”); and FCAM and FPRTH hold units in FCT. FPL therefore has a deemed interest in
the units in FCT in which each of FCAM and FPRTH has an interest, by virtue of Section 4 of the Securities and Futures Act (Chapter 289
of Singapore) (the “SFA”).
(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 FPL;
–
–
– FPL holds a 100% direct interest in each of FCAM and FPRTH; and
– FCAM and FPRTH hold units in FCT.
ThaiBev therefore has a deemed interest in the units in FCT in which FPL has an interest, by virtue of Section 4 of the SFA.
(3) IBHL holds a 100% direct interest in IBIL;
IBIL holds a greater than 20% interest in FPL;
–
– FPL holds a 100% direct interest in each of FCAM and FPRTH; and
– FCAM and FPRTH hold units in FCT.
IBHL therefore has a deemed interest in the units in FCT in which FPL has an interest, by virtue of Section 4 of the SFA.
(4) IBIL holds a greater than 20% interest in FPL;
– FPL holds a 100% direct interest in each of FCAM and FPRTH; and
– FCAM and FPRTH hold units in FCT.
IBIL therefore has a deemed interest in the units in FCT in which FPL has an interest, by virtue of Section 4 of the SFA.
(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 FPL;
–
– FPL holds a 100% direct interest in each of FCAM and FPRTH; and
– FCAM and FPRTH hold units in FCT.
SCL therefore has a deemed interest in the units in FCT in which FPL has an interest, by virtue of Section 4 of the SFA.
Statistics of
Unitholdings
Annual Report 2019 199
(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;
–
–
–
–
–
MMC therefore has a deemed interest in the units in FCT in which FPL has an interest, by virtue of Section 4 of the SFA.
ThaiBev holds a 100% direct interest in IBHL;
IBHL holds a 100% direct interest in IBIL;
IBIL holds a greater than 20% interest in FPL;
FPL holds a 100% direct interest in each of FCAM and FPRTH; and
FCAM and FPRTH hold units in FCT.
(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 FPL;
FPL holds a 100% direct interest in each of FCAM and FPRTH; and
FCAM and FPRTH hold units in FCT.
–
–
–
–
–
RM therefore has a deemed interest in the units in FCT in which FPL has an interest, by virtue of Section 4 of the SFA.
(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 FPL;
FPL holds a 100% direct interest in each of FCAM and FPRTH; and
FCAM and FPRTH hold units in FCT.
–
–
–
–
–
GC therefore has a deemed interest in the units in FCT in which FPL has an interest, by virtue of Section 4 of the SFA.
(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;
–
–
–
–
–
MM therefore has a deemed interest in the units in FCT in which FPL has an interest, by virtue of Section 4 of the SFA.
ThaiBev holds a 100% direct interest in IBHL;
IBHL holds a 100% direct interest in IBIL;
IBIL holds a greater than 20% interest in FPL;
FPL holds a 100% direct interest in each of FCAM and FPRTH; and
FCAM and FPRTH hold units in FCT.
(10) TCC Assets Limited (“TCCA”) holds a majority interest in FPL;
FPL holds a 100% direct interest in each of FCAM and FPRTH; and
FCAM and FPRTH hold units in FCT.
–
–
TCCA therefore has a deemed interest in the units in FCT in which FPL has an interest, by virtue of Section 4 of the SFA.
(11) Charoen Sirivadhanabhakdi and his spouse, Khunying Wanna Sirivadhanabhakdi, each owns 50% of the issued and paid-up share
TCCA holds a majority interest in FPL;
FPL holds a 100% direct interest in each of FCAM and FPRTH; and
FCAM and FPRTH hold units in FCT.
capital of TCCA;
–
–
–
Charoen Sirivadhanabhakdi therefore has a deemed interest in the units in FCT in which FPL has an interest, by virtue of Section 4 of
the SFA.
(12) Khunying Wanna Sirivadhanabhakdi and her spouse, Charoen Sirivadhanabhakdi, each owns 50% of the issued and paid-up share
TCCA holds a majority interest in FPL;
FPL holds a 100% direct interest in each of FCAM and FPRTH; and
FCAM and FPRTH hold units in FCT.
capital of TCCA;
–
–
–
Khunying Wanna Sirivadhanabhakdi therefore has a deemed interest in the units in FCT in which FPL has an interest, by virtue of
Section 4 of the SFA.
(13) Based on information provided by Schroders Investment (Singapore) Ltd. on 25 November 2019.
200 Frasers Centrepoint Trust
Statistics of
Unitholdings
DISTRIBUTION OF HOLDINGS
Size of Holdings
1 to 99
100 to 1,000
1,001 to 10,000
10,001 to 1,000,000
1,000,001 and above
Total
LOCATION OF UNITHOLDERS
Country
Singapore
Malaysia
Others
Total
FREE FLOAT
Number of
Unitholders
Percentage of
Unitholders
Number of Units
Percentage of
Units in Issue
28
888
4,515
1,666
23
7,210
0.40
12.47
63.41
23.40
0.32
100.00
706
690,631
20,068,391
64,688,110
1,032,061,213
1,117,509,051
0.00
0.06
1.80
5.79
92.35
100.00
Number of
Unitholders
Percentage of
Unitholders
Number of Units
Percentage of
Units in Issue
6,787
228
105
7,210
95.32
3.20
1.48
100.00
1,112,799,228
3,519,007
1,190,816
1,117,509,051
99.58
0.31
0.11
100.00
Based on information made available to the Manager as at 22 November 2019, approximately 63.5% 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.
Additional
Information
Annual Report 2019 201
INTERESTED PERSON TRANSACTIONS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2019
The transactions entered into with interested persons during the financial year under review, 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
16,756
8,960
5,803
1,935
145,665
477
–
–
–
–
–
–
Name of Interested Person
Frasers Property Limited and its
subsidiaries or associates
– Asset management fees (1)
– Acquisition fees
– Property management fees (1)
– Reimbursement of expenses (1)
– Acquisition of 33⅓% of the units in Sapphire
Star Trust ("SST") and 33⅓% of the shares
in FC Retail Trustee Pte. Ltd., the trustee-
manager of SST (2)
HSBC Institutional Trust
Services (Singapore) Limited
– Trustee’s fees
(1) Includes FCT’s interest in a joint venture
(2) SST holds the retail units in the property known as "Waterway Point" located at 83 Punggol Central, Singapore 828761
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 25 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
For the financial year ended 30 September 2019, an aggregate of 189,892,124 Units were issued and as at 30 September
2019, 1,116,284,043 Units were in issue. On 25 October 2019, the Trust issued 1,225,008 new Units to the Manager as the
base fee component of the Manager’s management fees for the quarter ended 30 September 2019 and the performance
fee component of the Manager's management fees for the financial year ended 30 September 2019.
NON-DEAL ROADSHOW EXPENSES
Non-deal roadshow expenses of $33,645 (2018: $59,649) were incurred during the year ended 30 September 2019.
202 Frasers Centrepoint Trust
Additional
Information
INTERESTED PERSON TRANSACTIONS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2019
Manager’s Asset Management and Acquisition Fees Paid and Payable in Units
A summary of Units issued for payment of the Manager’s management fees and acquisition fees in respect of the financial
year are as follows:-
Manager’s Base Fee Component
1 October 2018 to 31 December 2018
1 January 2019 to 31 March 2019
1 April 2019 to 30 June 2019
1 July 2019 to 30 September 2019
Manager’s Performance Fee Component
1 October 2018 to 30 September 2019
Acquisition Fee
In respect of acquisition by FCT Holdings (Sigma) Pte. Ltd, a
wholly-owned subsidiary of FCT, of 18.8% interest in PGIM
Real Estate AsiaRetail Fund Limited on various dates
Issue Date
Units Issued
Issue Price (1)
24 January 2019
26 April 2019
25 July 2019
25 October 2019
197,675
179,975
513,969
373,973
$2.1697 (1)
$2.3285 (1)
$2.5805 (1)
$2.7297 (1)
25 October 2019
851,035
$2.7297 (1)
16 April 2019
6 May 2019
24 September 2019
1,445,217
141,216
14,388
$2.3702 (2)
$2.3713 (2)
$2.7254 (2)
In respect of acquisition of an effective 40% interest in the
retail units in the property known as "Waterway Point"
(the "Acquisition") on various dates
17 July 2019
24 September 2019
1,819,199
317,996
$2.3820 (3)
$2.7254 (2)
(1) Based on the volume weighted average traded price of a Unit in the ordinary course of trading on the SGX-ST for the last 10 business
days of the relevant period in which the management fees were accrued
(2) Based on the volume weighted average traded price of a Unit in the ordinary course of trading on the SGX-ST for the last 10 business
days immediately preceding the date of issue of the Units
(3) Based on the higher of the issue price of the Units issued under the private placement and the preferential offering undertaken to,
inter alia, finance the Acquisition in respect of which the Acquisition Fee is payable
Notice of
Annual General Meeting
Annual Report 2019 203
(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 11th 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 Monday, 13 January 2020 at 10.00 a.m. for the following purposes:
ROUTINE BUSINESS
Resolution (1)
1.
To receive and adopt the Report of the Trustee of FCT issued by HSBC Institutional Trust Services (Singapore)
Limited, the trustee of FCT (the “Trustee”), the Statement by the Manager issued by Frasers Centrepoint Asset
Management Ltd., as manager of FCT (the “Manager”), the Audited Financial Statements of FCT for the financial
year ended 30 September 2019 and the Auditors’ Report thereon.
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),
204 Frasers Centrepoint Trust
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 trust deed constituting FCT (as amended and restated) (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 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 Asset Management Ltd.
(Company Registration No: 200601347G)
As manager of Frasers Centrepoint Trust
Catherine Yeo
Company Secretary
Singapore, 23 December 2019
Notice of
Annual General Meeting
Annual Report 2019 205
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’s 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.
(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.
206 Frasers Centrepoint Trust
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.
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
instrument appointing a proxy(ies) and/or
By submitting an
representative(s), the unitholder accepts and agrees to the personal
data privacy terms set out in the Notice of Annual General Meeting
dated 23 December 2019.
I/We
Of
(Name)
(NRIC/Passport Number)
(Address)
being a unitholder / unitholders of Frasers Centrepoint Trust (“FCT”), hereby appoint:
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 Monday, 13 January 2020 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:
1.
2.
3.
ROUTINE BUSINESS
To receive and adopt the Trustee’s Report, the Statement by the Manager,
the Audited Financial Statements of FCT for the financial year ended
30 September 2019 and the Auditors’ Report thereon
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
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 (P) 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
2019/2020
.
y
l
m
r
i
f
s
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Signature(s) of Unitholder(s)/Common Seal
Email Address of Unitholder (optional):
IMPORTANT: PLEASE READ NOTES TO THE PROXY FORM
Total Number Of Units Held (Note 5)
Fold here, do not staple. Glue all sides firmly.
IMPORTANT: PLEASE READ THE NOTES TO PROXY FORM BELOW
Notes to Proxy Form
1. A holder of units in Frasers Centrepoint Trust (“FCT”, and a unitholder of FCT, “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 (as the case may be) (the “Proxy Form”) 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 Proxy Form 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 Proxy Form, 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, the Unitholder should insert that number of Units. If the Unitholder has Units entered against the
Unitholder’s 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 Proxy Form will be deemed to relate to all the Units held by the Unitholder.
6. This Proxy Form must be under the hand of the appointor or of his attorney duly authorised in writing. Where the Proxy Form 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 a Proxy Form 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 Proxy Form, 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
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
Information1
Frasers Centrepoint Trust
Registered Address
HSBC Institutional Trust Services (Singapore) Limited
21 Collyer Quay #10-02, HSBC Building
Singapore 0493202
Website Address: www.frasersproperty.com/reits/fct
Trustee
HSBC Institutional Trust Services (Singapore) Limited
21 Collyer Quay, HSBC Building, #10-02,
Singapore 0493202
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 Manager3
Dr Cheong Choong Kong (Chairman)
Independent, Non-Executive
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
BNP Paribas
Crédit Industriel et Commercial
Citibank N.A.
DBS Bank Ltd
Oversea-Chinese Banking Corporation Ltd
Standard Chartered Bank
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
Mr Philip Eng Heng Nee
Non-Executive
Mr Ho Chai Seng
Independent, Non-Executive
Mr Ho Chee Hwee Simon4
Independent, Non-Executive
Ms Koh Choon Fah5
Independent, Non-Executive
Mr Christopher Tang Kok Kai
Non-Executive
Audit, Risk and Compliance Committee
(formerly known as Audit Committee)
Mr Ho Chee Hwee Simon (Chairman)4
Dr Cheong Choong Kong
Mr Ho Chai Seng
Mr Philip Eng Heng Nee
Ms Koh Choon Fah5
Nominating and Remuneration Committee
Mr Ho Chai Seng (Chairman)
Dr Cheong Choong Kong
Mr Ho Chee Hwee Simon
Ms Koh Choon Fah5
Mr Christopher Tang Kok Kai
Company Secretary
Ms Catherine Yeo
1 Unless otherwise stated, the information provided herein is as of 30 September 2019.
2 With effect from 1 December 2019.
3 Dr Chew Tuan Chiong retired as Executive and Non-Independent Director and as Chief Executive Officer of the Manager on 1 July 2019.
4 With effect from 1 November 2019, Mr Ho Chee Hwee Simon relinquished his role as the chairman of the Audit, Risk and Compliance Committee (“ARCC”)
and remains as a non-executive and non-independent Director of the Manager and a member of the ARCC and the Nominating and Remuneration
Committee (“NRC”).
5 Ms Koh Choon Fah was appointed as a Non-Executive and Independent Director of the Manager, a member of the ARCC and a member of the NRC with
effect from 1 October 2019. Ms Koh Choon Fah is appointed as the chairman of the ARCC with effect from 1 November 2019.
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:
www.frasersproperty.com/reits/fct