Strong rents, occupancies lift FCOT Q4 DPU by 6%
Singapore
FRASERS Commercial Trust (FCOT) achieved a 6.2 per cent rise in distribution per unit (DPU) to 2.21 Singapore cents for the fourth quarter ended Sept 30, thanks to strong rents and occupancies as well as lower interest costs.
This brought the fiscal full year DPU to a record 8.51 Singapore cents, up 8.7 per cent from fiscal 2013.
"The good performance was driven by the properties in Singapore which continued to benefit from the positive momentum in the Singapore office market," said Low Chee Wah, chief executive officer of the trust manager.
Both the redemption and conversion of Series A convertible perpetual preferred units (CPPUs) - which were issued in 2009 to fund an acquisition - led to savings in Series A CPPU distributions and boosted the DPU in the fiscal year.
Its net property income (NPI) for the full year, however, slipped a marginal 0.4 per cent to S$90.6 million. The decline was due mainly to the weaker Australian dollar and slightly higher expenses incurred for Caroline Chisholm Centre in Australia arising from repair, maintenance and painting works.
For the quarter ended Sept 30, FCOT's NPI rose 8.8 per cent year-on-year to S$23.8 million on the back of higher income contribution from underlying leases of Alexandra Technopark, following the expiry of the master lease in August, and higher income contribution from China Square Central.
On Aug 25, the master lease with Orrick Investments Pte Ltd at Alexandra Technopark expired and the underlying multi-tenant leases remained in force. The expiry of the master lease provided immediate income uplift as FCOT received underlying rents which were significantly higher.
FCOT said this will drive further growth in future NPI and DPU.
As at Sept 30, FCOT enjoyed an occupancy rate of 96.5 per cent for its S$1.82 billion portfolio comprising China Square Central, Alexandra Technopark, 55 Market Street as well as Caroline Chisholm Centre and Central Park in Australia. 55 Market Street achieved full committed occupancy.
The portfolio's weighted average lease to expiry (WALE) is about 3.9 years, anchored by the long WALE of Caroline Chisholm Centre of 10.8 years.
FCOT noted that its properties in Singapore rode the market uptrend, achieving weighted average rental reversions of 6-18.4 per cent for leases that commenced in the fiscal fourth quarter, with demand coming from a diverse mix of tenants.
The entire portfolio saw weighted average rental reversions of 13.7-21.4 per cent for the full fiscal year.
FCOT's fourth quarter distribution of 2.21 cents per unit will be paid out on Nov 28 and the books closure date is Oct 29.
Units of FCOT put on one cent to closed trading at S$1.36 on Monday.
