Brokers' take

Frasers Commercial Trust | BUY (Upgrade) Dec 18 close: S$1.43 Price target: S$1.51 OCBC Investment Research, Dec 18

Frasers Commercial Trust (FCOT) has entered into a 50:50 JV with its sponsor, Frasers Centrepoint Limited (FCL), to acquire Farnborough Business Park (FBP), which comprises 14 commercial buildings in the UK. We like the defensive attributes of the asset, as it has a long WALE (weighted average lease expiry) of 8.3 years, a high occupancy rate of 98.1 per cent, and good quality tenants.

We are particularly encouraged by the expansion of FCOT's investment mandate to include real estate assets in Europe used for commercial purposes. We note that FCL's recently-acquired portfolio of business parks in Thames Valley is complementary to FBP, and would allow FCOT to tap on FCL's asset management platform for greater synergy and operational efficiency.