Croesus Retail Trust's seventh property in Japan, One's Mall in Chiba Prefecture.Croesus Retail Trust's seventh property in Japan, One's Mall in Chiba Prefecture.

Singapore-listed Croesus Retail Trust (CRT) (SGX:S6NU) has reported a distribution per unit (DPU) of 2.08 Singapore cents for its 2Q 2015, representing an increase of 3% as compared to the 2.02 Singapore cents distributed in 2014.

The DPU figure comes on the back of a 48.8% rise in net property income (NPI) which came in at JPY1.95 billion as compared to the JPY1.28 billion from the corresponding period last year.

CRT has attributed the better NPI numbers to the addition of Luz Omori and Croesus Tachikawa acquired on 6 March 2014, One’s Mall acquired on 16 October 2014, and better tenant sales at Mallage Shobu.

“We are delighted to achieve another quarter of DPU outperformance, marking six consecutive quarters since our IPO in May 2013”, said Jim Chang, CEO and Executive Director of Croesus Retail Asset Management.

CRT has cautioned that the increase in Japan’s consumption tax from 5% to 8% in April 2014 has resulted in a decrease in private consumption. Consequently, gross domestic product contracted by 7.1% and 1.9% on an annualised basis in the second and third quarter in 2014.

“However, prospects for the fourth quarter looks better with a 4.4% GDP growth forecasted due to an expected recovery of private consumption and exports”, said the trust which has successfully completed its acquisition of One’s Mall, a large-scale suburban retail mall located in Chiba Prefecture in the Greater Tokyo area.

Acquisitions by CRT have been financed with five-year Japanese Yen debt maturing in 2018 to 2019, Singapore dollar-denominated 4.6% fixed rate notes due 2017 and equity fundraising.

As CRT receives its distributable income in Japanese Yen but pays out distributions in Singapore Dollars to its unitholders semi-annually, CRT said that it has hedged close to 100% of its distribution for the next 18 months up to 30 June 2016 to minimise exposure to fluctuations in exchange rates.

Units of CRT are currently listed on the Singapore Exchange at SGD0.96.

Croesus Retail Trust's seventh property in Japan, One Mall in Chiba Prefecture.
Croesus Retail Trust's seventh property in Japan, One Mall in Chiba Prefecture.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.