Properties boost Q2 earnings for Frasers Commercial Trust

Improved performance at two properties and contribution from a third acquired last August bolstered second-quarter earnings at Frasers Commercial Trust (FCOT).

The trust posted a 19.5 per cent year-on-year rise in distributable income to $19.35 million for the three months to March 31.

Distribution per unit rose 2.9 per cent to 2.45 cents and will be paid on May 30.

"The good performance of the trust was bolstered by Alexandra Technopark and Caroline Chisholm Centre (in Canberra) and the contribution from 357 Collins Street (in Melbourne), which was acquired in August 2015 and has a full occupancy rate," said Mr Low Chee Wah, chief executive officer of the trust's manager.

"This yield accretive acquisition will provide stability to the trust and strengthen the distributions in the longer term."

Gross revenue rose 12 per cent to $38.99 million while net property income rose 16.7 per cent to $28.84 million.

  • AT A GLANCE

  • GROSS REVENUE $38.99 million (+12.0%)

    NET PROPERTY INCOME $28.84 million (+16.7%)

    DISTRIBUTABLE INCOME $19.35 million (+19.5%)

    DISTRIBUTION PER UNIT 2.45 cents (+2.9%)

This was mainly due to the completion of the acquisition of 357 Collins Street, while higher income contribution came from Alexandra Technopark due to higher rental rates and lower utilities expenses.

There were also lower repair and maintenance and painting expenses for Caroline Chisholm Centre.

The increase was partly reduced by the effects of the weakening Australian dollar on the income from Australian properties and lower occupancy rate for China Square Central and Central Park in Perth, the manager noted.

Average occupancy rate across its portfolio of six properties in Singapore and Australia was 92.6 per cent at March 31, compared with 96.5 per cent a year earlier. Its weighted average lease expiry by gross rental income was 3.3 years at March 31, slightly down from 3.5 years previously.

The trust's Singapore properties enjoyed positive weighted average rental reversions of between 2.4 per cent and 5.4 per cent in the second quarter, given the low passing rents of expiring leases, noted the manager.

The gearing ratio was 36.2 per cent at March 31, down from 37.2 per cent a year earlier.

FCOT units rose two cents to $1.31 yesterday after the results were announced.

A version of this article appeared in the print edition of The Straits Times on April 22, 2016, with the headline 'Properties boost Q2 earnings for Frasers Commercial Trust'. Print Edition | Subscribe