SINGAPORE (July 24): The manager of Frasers Commercial Trust (FCOT) has announced a DPU of 2.40 cents for 3Q17 ended June from a DPU of 2.41 cents in 3Q16.
Frasers Centrepoint Asset Management (Commercial) says 3Q17 distributable income to unitholders rose 0.9% to $19.2 million but this was offset by the increase in number of units from a year ago.
Gross revenue of $38.3 million for 3Q17 was 0.6% lower than for 3Q16, mainly due to lower occupancy rates at Alexandra Technopark, China Square Central and Central Park. However, gross revenue for the Australian properties for 3Q17 was up 5.3% year-on-year mainly as a result of the stronger Australian dollar.
In 3Q17, net property income (NPI) declined 0.8% y-o-y to $27.9 million, although NPI for the Australian properties increased 4.9% y-o-y.
FCOT’s portfolio achieved an average committed occupancy rate of 92.6% as at June 30, up from 91.8% as at March 31. The overall average occupancy rate for the Singapore portfolio was 91.2%; while that for the Australian portfolio was 94.4%.
The income-weighted average lease expiry (WALE) of the portfolio was 3.4 years as at June 30.
In 3Q17, 51,000 sf of new and renewed leases, representing about 1.9% of the portfolio, started during the quarter. The weighted average rent reversion for these leases, which were all within the Singapore portfolio, was negative 2.5%, which mirrors the general downtrend which the Singapore office market has been experiencing since mid-2015.
The effect of the downtrend in Singapore office rents will be mitigated by contracted rent escalations at the Australian properties, including 357 Collins Street and Caroline Chisholm Centre.
In the 4Q17 from July to September, major leases expiring include the lease of Hewlett Packard Enterprise Singapore at Alexandra Technopark which contributes 5.6% of the portfolio gross rental income. In the first 1Q18, major leases expiring include the leases of HPE and Hewlett Packard Singapore at Alexandra Technopark, which contribute 1.5% and 11.1% of the portfolio gross rental income, respectively.
Frasers Centrepoint Asset Management (Commercial) says it will continue to be proactive in tenant engagement and leasing initiatives in managing lease expiries that are coming due.
Units in FCOT closed at $1.42 on Monday.
