Frasers Commercial Trust posts 2.8% dip in Q4 DPU to 2.45 cents

The increase was partially reduced by the lower occupancy rate for China Square Central, due to ongoing development works, and higher maintenance expenses for Caroline Chisholm Centre.
The increase was partially reduced by the lower occupancy rate for China Square Central, due to ongoing development works, and higher maintenance expenses for Caroline Chisholm Centre.PHOTO: FRASERS COMMERCIAL TRUST

SINGAPORE - Frasers Commercial Trust (FCOT) reported a 2.8 per cent decline in distribution per unit (DPU) to 2.45 Singapore cents for the fourth quarter ended Sept 30, from 2.52 cents a year ago.

Fourth quarter DPU was lower as there were no management fees taken in units in contrast to the corresponding period last year when 30 per cent of the fees were taken in, the trust manager said.

Distribution income for the quarter rose 4 per cent year on year to S$19.49 million.

Net property income for the fourth quarter rose 7 per cent to S$29.3 million from a year ago, due largely to the completion of the acquisition of 357 Collins Street and higher income contribution from Alexandra Technopark as a result of higher rental rates and lower utilities expenses.

The increase was partially reduced by the lower occupancy rate for China Square Central, due to ongoing development works, and higher maintenance expenses for Caroline Chisholm Centre.

For the full year, FCOT notched the highest distributable income and DPU since the trust was listed in 2006. The distributable income of S$77.6 million and DPU of 9.82 cents were up 14.5 per cent and 1.1 per cent respectively, compared to the prior financial year.

Net property income for the full year was up 13.5 per cent year on year to S$115.6 million.

Said Mr Low Chee Wah, chief executive officer of the trust's manager: "We are pleased that the trust continues to achieve new highs, and this is particularly commendable given the weaker global economy and challenging Singapore office leasing environment.

"The Singapore properties and 357 Collins Street continued to enjoy positive rental reversions during the quarter, while the 3 per cent annual fixed step-up rents at Caroline Chisholm Centre continued to provide organic growth for the trust."

Construction works for the development of a 16-storey hotel and commercial project at China Square Central are on track and expected to be completed by mid-2019. The hotel is being developed by an entity of Frasers Centrepoint Ltd and will be operated by Frasers Hospitality under the 'Capri by Fraser' brand.

Said Mr Low: "With the weaker global economic environment and Singapore office market outlook, we will continue to adopt proactive asset management and leasing initiatives. In view of the weaker environment, we will also review opportunities for asset enhancements to reposition the properties to stay competitive."