Frasers Commercial Trust Q2 DPU up 2.9%

SINGAPORE — Frasers Commercial Trust (FCOT) yesterday reported a 2.9 per cent increase in distribution per unit (DPU) for its fiscal second quarter, bolstered by the better performances of Alexandra Technopark and contribution from its new Australian property.

DPU for the second quarter ended March was 2.45 Singapore cents, compared with 2.38 cents in the same period last year, said FCOT’s manager in a statement yesterday.

Distributable income was 19.5 per cent higher at S$19.35 million.

FCOT’s property portfolio as of end-March consisted of six properties, namely China Square Central, Alexandra Technopark and 55 Market Street in Singapore, a 50 per cent indirect interest in Central Park in Perth, Caroline Chisholm Centre in Canberra and 357 Collins Street in Melbourne.

357 Collins Street was acquired in August last year for A$222.5 million (S$234 million).

Mr Low Chee Wah, CEO of the firm that manages FCOT, said proactive leasing initiatives have resulted in a significant decrease in lease expiries in FY16, despite the headwinds in the Singapore office market.

During the quarter, the lease expiries at Alexandra Technopark were reduced substantially, with the renewal of major leases.

As a result, 6.4 per cent of the portfolio leases by gross rental income are left to be renewed for the remainder of FY16, compared with 15.4 per cent in the previous quarter.

Net property income rose 16.7 per cent to S$28.8 million, mainly due to the completion of the acquisition of 357 Collins Street, higher rental rates and lower utilities expenses at Alexandra Technopark, as well as lower repair, maintenance and painting expenses for Caroline Chisholm Centre. Gross revenue increased 12 per cent to S$39 million.

FCOT’s portfolio in Singapore and Australia had occupancy rates of 92 per cent and 93.4 per cent, respectively, as of end-March.

Mr Low said: “The properties in Singapore continued to achieve positive rental reversions despite the weaker Singapore office market outlook and challenging leasing environment. This is a testament of the resilience of the Trust’s Grade B offices in Singapore.”

The REIT also said that construction works for a 16-storey hotel and commercial project at China Square Central are on track, and are expected to be completed by mid-2019.