Frasers Commercial Trust holds to Q1 DPU of 2.4 S cents

FRASERS Commercial Trust kept distribution per unit (DPU) stable at 2.4 Singapore cents in the first quarter  ended Dec 31, 2018, even with hits to top and bottom lines, as distributable income was propped up on various fronts.

Net property income fell by 15 per cent on the same period the year before, to S$21.1 million, according to financial statements released on Friday evening.

The earnings decline tracked an 11 per cent drop in gross revenue, to S$31.5 million, which the manager attributed to the sale of a property in August 2018, lower occupancies at China Square Central and Alexandra Technopark, and the currency effects of a weaker Australian dollar.

But distributable income still rose by 11 per cent to S$21.6 million, helped by capital returns from hotel development rights at China Square Central, and paying the management fee in units instead of in cash.

Distributable income was also shored up by contributions from Farnborough Business Park, in which Frasers Commercial Trust took a 50 per cent stake in January 2018.

The real estate investment trust's six-property portfolio had an occupancy rate of 80.7 per cent as at Dec 31, 2018, with a weighted average lease expiry of 4.3 years. It has interests in Australia and Britain, and in Singapore, where it owns both Alexandra Technopark and China Square Central in Cross Street.

China Square Central's retail podium is closed for a S$38 million enhancement, which the manager said could raise net lettable area from 64,000 square feet (sq ft) to 78,000 sq ft. It added that co-working space operator JustCo has committed to leasing the whole second floor, or 40 per cent of the podium.

Frasers Commercial Trust lost S$0.02, or 1.36 per cent, to S$1.45, before the results were out.