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FRASERS Commercial Trust (FCOT) on Thursday reported a 2.9 per cent increase in distribution per unit (DPU) for the second quarter ended March 31, 2016, to 2.45 Singapore cents, mainly buoyed by the acquisition of an office building.
This came on the back of a 19.5 per cent rise in distributable income to S$19.35 million. Net property income grew 16.7 per cent to S$28.84 million, bolstered by Alexandra Technopark and Caroline Chisholm Centre and the contribution from 357 Collins Street, which was acquired in August 2015 and has a full occupancy rate.
Low Chee Wah, CEO of the Reit manager, said proactive leasing initiatives have resulted in a significant decrease in lease expiries in FY2016 despite the headwinds in the Singapore office market.
During the quarter, the lease expiries at Alexandra Technopark were reduced substantially with the renewal of major leases. Only 6.4 per cent of the portfolio leases by gross rental income are left to be renewed for the remainder of FY2016, compared to 15.4 per cent in the previous quarter.
"The properties in Singapore continued to achieve positive rental reversions despite the weaker Singapore office market outlook and challenging leasing environment," Mr Low said.
As at March 31, the Reit's portfolio has an occupancy rate of 92.6 per cent - with the rate for Singapore and Australian properties at 92 per cent and 93.4 per cent respectively.
Construction works for the development of a Hotel at China Square Central are still on track, FCOT said.