Frasers Commercial Trust posts flat Q1 DPU of 2.4 Singapore cents

Singapore

MAINBOARD-LISTED Frasers Commercial Trust (FCOT) declared a distribution per unit (DPU) of 2.4 Singapore cents for the first quarter ended December, unchanged from a year ago.

Gross revenue rose 19.8 per cent year-on-year to S$37.8 million, while net property income (NPI) grew 26.5 per cent to S$26.7 million, boosted by higher rental income for China Square Central, Alexandra Technopark, Central Park and 357 Collins Street, as well as lower utilities expenses for Alexandra Technopark.

Including the contributions from Farnborough Business Park (FBP) in the UK, which is held as a joint venture, FCOT's aggregate NPI would have been S$29 million, marking a 17.4 per cent year-on-year rise.

The portfolio committed occupancy rate also inched up to 95.2 per cent as at end-2019, compared to 95 per cent at the end of the previous quarter. The occupancy rates for the Singapore portfolio, the Australia portfolio and FBP as at end-2019 were 95.5 per cent, 94 per cent and 99.1 per cent respectively.

"The quarter saw aggregate portfolio gross revenue and NPI improving significantly compared with the preceding quarter and also on a year-on-year basis, a clear indication that tangible results are beginning to come forth from the various asset enhancement, leasing and other efforts," said Jack Lam, chief executive of FCOT's manager.

Despite Brexit uncertainties, FCOT's manager is confident about the long-term prospects of the UK market and expects the performance of FBP to remain stable, given the property's long WALE (weighted average lease expiry) of 6.6 years, as at end-2019.

The Reit's gearing level stands at 29 per cent, which its manager reckons "provides a high degree of financial flexibility to pursue growth initiatives".

Meanwhile the proposed merger of FCOT and Frasers Logistics and Industrial Trust, announced in December, will enable the enlarged firm "to unlock synergies and explore new opportunities in the logistics, industrial and commercial sectors", benefitting unitholders, Mr Lam said.

Units of FCOT closed at S$1.65 on Wednesday, up 0.61 per cent.