Brokers' take

Frasers Commercial Trust | Neutral July 23 close: S$1.64 Target price: S$1.65 RHB Research Institute, July 23

Frasers Commercial Trust's (FCOT) Q3/9M FY19 results are in line with estimates. The key positive for Q3 was the healthy 12.6 percentage points increase in the portfolio committed occupancy rate to 94.1 per cent, driven by Google Asia-Pacific signing its lease. The upside is largely priced in, with share price having risen 20 per cent year-to-date.

Rent reversions were slightly positive, with recent signing rental rates at S$4-4.60 per square foot/month (psfpm) - higher than the average passing rental rate of S$3.97 psfpm as at end-2018. However, note that Microsoft Operations has exercised its right to shorten the lease tenure in respect of 77,761 sq ft of space by two years to end in January 2020. Management is currently in advanced negotiations for this space.